UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) COMBINED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____TO_____
COMMISSION REGISTRANT, STATE OF INCORPORATION, I.R.S. EMPLOYER
FILE NUMBER ADDRESS AND TELEPHONE NUMBER IDENTIFICATION NO.
1-1443 CENTRAL AND SOUTH WEST CORPORATION 51-0007707
(A Delaware Corporation)
1616 Woodall Rodgers Freeway
Dallas, Texas 75202-1234
(214) 777-1000
0-346 CENTRAL POWER AND LIGHT COMPANY 74-0550600
(A Texas Corporation)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(512) 881-5300
0-343 PUBLIC SERVICE COMPANY OF OKLAHOMA 73-0410895
(An Oklahoma Corporation)
212 East 6th Street
Tulsa, Oklahoma 74119-1212
(918) 599-2000
1-3146 SOUTHWESTERN ELECTRIC POWER COMPANY 72-0323455
(A Delaware Corporation)
428 Travis Street
Shreveport, Louisiana 71156-0001
(318) 222-2141
0-340 WEST TEXAS UTILITIES COMPANY 75-0646790
(A Texas Corporation)
301 Cypress Street
Abilene, Texas 79601-5820
(915) 674-7000
INDICATE BY CHECK MARK WHETHER THE REGISTRANTS (1) HAVE FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANTS WERE REQUIRED TO FILE SUCH REPORTS), AND (2) HAVE BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
Common Stock Outstanding at May 9, 1997 Shares
Central and South West Corporation 212,235,310
Central Power and Light Company 6,755,535
Public Service Company of Oklahoma 9,013,000
Southwestern Electric Power Company 7,536,640
West Texas Utilities Company 5,488,560
This Combined Form 10-Q is separately filed by Central and South
West Corporation, Central Power and Light Company, Public Service Company of
Oklahoma, Southwestern Electric Power Company and West Texas Utilities Company.
Information contained herein relating to any individual Registrant is filed by
such Registrant on its own behalf. Each Registrant makes no representation as to
information relating to the other Registrants.
<PAGE> 2
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES
TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q
MARCH 31, 1997
PAGE
GLOSSARY OF TERMS......................................................... 3
FORWARD LOOKING INFORMATION............................................... 4
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Central and South West Corporation and Subsidiary Companies...... 5
Central Power and Light Company.................................. 13
Public Service Company of Oklahoma............................... 20
Southwestern Electric Power Company.............................. 26
West Texas Utilities Company..................................... 32
Notes to Financial Statements.................................... 38
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS........................ 50
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.......................................... 57
ITEM 2. CHANGES IN SECURITIES................................Inapplicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES......................Inapplicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........ 57
ITEM 5. OTHER INFORMATION....................................Inapplicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................... 61
SIGNATURES................................................................ 64
<PAGE> 3
GLOSSARY OF TERMS
The following abbreviations or acronyms used in this text are defined below:
ABBREVIATION OR ACRONYM DEFINITION
ANI................................American Nuclear Insurance
Arkansas Commission................Arkansas Public Service Commission
Cajun..............................Cajun Electric Power Cooperative, Inc.
Committee of Certain Members.......The members committee of Cajun, which
currently represents 7 of the 12 Louisiana
member distribution cooperatives that are
served by Cajun
Court of Appeals...................Court of Appeals, Third District of Texas,
Austin, Texas
CPL................................Central Power and Light Company, Corpus
Christi, Texas
CPL 1996 Fuel Agreement............Fuel settlement agreement entered into by CPL
and other parties in March 1996
CPL Final Order....................Final order issued on March 31, 1997 by Texas
Commission in CPL's current rate case
CSW................................Central and South West Corporation, Dallas,
Texas
CSW Energy.........................CSW Energy, Inc., Dallas, Texas
CSW International..................CSW International, Inc., Dallas, Texas
CSW System.........................CSW and its subsidiaries
CWIP...............................Construction work in progress
ECOM...............................Excess cost over market
El Paso............................El Paso Electric Company
El Paso Merger.....................The proposed merger whereby El Paso would
have become a wholly owned subsidiary of CSW
Entergy Gulf States................Gulf States Utilities Company
EPA................................Environmental Protection Agency
Exchange Act.......................Securities Exchange Act of 1934, as amended
FASB...............................Financial Accounting Standards Board
FERC...............................Federal Energy Regulatory Commission
ITC................................Investment tax credit
KWH................................Kilowatt-hour
LIFO...............................Last-in First-out (inventory accounting
method)
MD&A...............................Management's Discussion and Analysis of
Financial Condition and Results of
Operations
MDEQ...............................Mississippi Department of Environmental
Quality
Merger Agreement...................Agreement and Plan of Merger between El Paso
and CSW, dated as of May 3, 1993, as amended
MGP................................Manufactured gas plant or coal gasification
plant
Mississippi Power..................Mississippi Power Company
MMbtu..............................Million Btu (British thermal unit)
MWH................................Megawatt-hour
National Grid......................National Grid Group plc
NEIL...............................Nuclear Electric Insurance Limited
NRC................................Nuclear Regulatory Commission
Oklahoma Commission................Corporation Commission of the State of
Oklahoma
PRP................................Potentially responsible party
PSO................................Public Service Company of Oklahoma, Tulsa,
Oklahoma
Registrant(s)......................CSW, CPL, PSO, SWEPCO and WTU
SEC................................United States Securities and Exchange
Commission
SEEBOARD...........................SEEBOARD plc., Crawley, West Sussex, United
Kingdom
SFAS...............................Statement of Financial Accounting Standards
SFAS No. 52........................Foreign Currency Translation
SFAS No. 71........................Accounting for the Effects of Certain Types
of Regulation
SFAS No. 125.......................Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of
Liabilities
STP................................South Texas Project nuclear electric
generating station, jointly owned by CPL,
Houston Lighting & Power Company (the project
manager), City of Austin, and City of San
Antonio
Supreme Court......................Supreme Court of Texas
<PAGE> 4
GLOSSARY OF TERMS (CONTINUED)
ABBREVIATION OR ACRONYM DEFINITION
SWEPCO.............................Southwestern Electric Power Company,
Shreveport, Louisiana
SWEPCO Plan........................The plan of reorganization for Cajun filed by
the Committee of Certain Members, SWEPCO and
Entergy Gulf States on October 26, 1996 with
the U.S. Bankruptcy Court for the Middle
District of Louisiana
Texas Commission...................Public Utility Commission of Texas
Transok............................Transok, Inc. and subsidiaries, a former
wholly owned subsidiary of CSW
U.S. Electric(s) or U.S. Electric
Operating Companies...........CPL, PSO, SWEPCO and WTU
WTU................................West Texas Utilities Company, Abilene, Texas
FORWARD LOOKING INFORMATION
This report and other presentations made by CSW and its subsidiaries contain
forward looking statements within the meaning of Section 21E of the Exchange
Act. Although CSW and each of its subsidiaries believe that, in making any such
statements, its expectations are based on reasonable assumptions, any such
statements may be influenced by factors that could cause actual outcomes and
results to be materially different from those projected. Important factors that
could cause actual results to differ materially from those in the forward
looking statements include, but are not limited to: the impact of general
economic changes in the U.S. and in countries in which CSW either currently has
made or in the future may make investments; the impact of deregulation on the
U.S. electric utility business; increased competition and electric utility
industry restructuring in the U.S.; federal and state regulatory developments
and changes in law which may have a substantial adverse impact on the value of
CSW System assets; timing and adequacy of rate relief; adverse changes in
electric load and customer growth; climatic changes or unexpected changes in
weather patterns; changing fuel prices, generating plant and distribution
facility performance; decommissioning costs associated with nuclear generating
facilities; uncertainties in foreign operations and foreign laws affecting CSW's
investments in those countries; the effects of retail competition in the natural
gas and electricity distribution and supply businesses in the United Kingdom;
and the timing and success of efforts to develop domestic and international
power projects. In the non-utility area, the aforementioned factors would also
apply, and, in addition, would include: the ability to compete effectively in
new areas, including telecommunications, power marketing and brokering, and
other energy related services, as well as evolving federal and state regulatory
legislation and policies that may adversely affect those industries generally or
the CSW System's business in areas in which it operates.
<PAGE> 5
CSW
CENTRAL AND SOUTH WEST CORPORATION
AND SUBSIDIARY COMPANIES
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
<PAGE> 6
CENTRAL AND SOUTH WEST CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31,
------------------------------
1997 1996
----------- -----------
(millions, except per share amounts)
OPERATING REVENUES
U.S. Electric $743 $666
United Kingdom 521 537
Other diversified 14 12
------ ------
1,278 1,215
OPERATING EXPENSES AND TAXES
U.S. Electric fuel 262 247
U.S. Electric purchased power 25 17
United Kingdom cost of sales 369 400
Operating and maintenance 252 221
Provision for CPL Final Order 41 --
El Paso merger litigation 25 --
Depreciation and amortization 118 115
Taxes, other than income 48 43
Income taxes 11 28
------ ------
1,151 1,071
------ ------
OPERATING INCOME 127 144
------ ------
OTHER INCOME AND DEDUCTIONS 5 8
------ ------
INCOME BEFORE INTEREST CHARGES 132 152
------ ------
INTEREST CHARGES
Interest on long-term debt 83 78
Interest on short-term debt and other 20 27
------ ------
103 105
------ ------
INCOME FROM CONTINUING OPERATIONS 29 47
DISCONTINUED OPERATIONS
Income from discontinued operations,
net of income tax expense of $4
for 1996. -- 8
------ ------
NET INCOME 29 55
Preferred stock dividends 4 4
------ ------
NET INCOME FOR COMMON STOCK $25 $51
====== ======
Average Common Shares Outstanding 211.8 199.0
Earnings per Share of Common Stock
from Continuing Operations $0.12 $0.22
Earnings per Share of Common Stock
from Discontinued Operations -- 0.04
------ ------
Earnings per Share of Common Stock $0.12 $0.26
====== ======
Dividends Paid per Share of Common Stock $0.435 $0.435
====== ======
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE> 7
CENTRAL AND SOUTH WEST CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
(millions)
ASSETS
FIXED ASSETS
Electric
Production $5,793 $5,830
Transmission 1,544 1,538
Distribution 4,242 4,237
General 1,323 1,318
Construction work in progress 213 230
Nuclear fuel 185 184
------- -------
Total Electric 13,300 13,337
Other diversified 125 84
------- -------
13,425 13,421
Less - Accumulated depreciation
and amortization 4,971 4,940
------- -------
8,454 8,481
------- -------
CURRENT ASSETS
Cash and temporary cash investments 120 254
Special deposits 78 --
Accounts receivable 794 861
Materials and supplies, at average cost 183 185
Electric utility fuel inventory 87 102
Under-recovered fuel costs 52 46
Prepayments and other 72 85
------- -------
1,386 1,533
------- -------
DEFERRED CHARGES AND OTHER ASSETS
Deferred plant costs 508 509
Mirror CWIP asset 296 299
Other non-utility investments 293 347
Income tax related regulatory assets, net 236 236
Goodwill 1,449 1,525
Other 347 402
------- -------
3,129 3,318
------- -------
$12,969 $13,332
======= =======
The accompanying notes to consolidated financial statements are an
integral part of these statements.
<PAGE> 8
CENTRAL AND SOUTH WEST CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
(millions)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stock equity
Common stock: $3.50 par value
Authorized: 350.0 million shares
Issued and outstanding: 212.2
million shares in 1997 and
211.5 million shares in 1996 $743 $740
Paid-in capital 1,038 1,022
Retained earnings 1,896 1,963
Foreign currency translation
adjustment and other 27 77
------- -------
3,704 3,802
------- -------
Preferred stock
Not subject to mandatory redemption 292 292
Subject to mandatory redemption 33 33
Long-term debt 3,986 4,024
------- -------
8,015 8,151
------- -------
CURRENT LIABILITIES
Long-term debt and preferred stock
due within twelve months 203 204
Short-term debt 619 364
Short-term debt - CSW Credit, Inc. 493 579
Loan notes 66 76
Accounts payable 438 630
Accrued taxes 85 324
Accrued interest 111 82
Other 231 166
------- -------
2,246 2,425
------- -------
DEFERRED CREDITS
Accumulated deferred income taxes 2,253 2,272
Investment tax credits 288 291
Other 167 193
------- -------
2,708 2,756
------- -------
$12,969 $13,332
======= =======
The accompanying notes to consolidated financial statements are an
integral part of these statements.
<PAGE> 9
CENTRAL AND SOUTH WEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
--------------------------
1997 1996
---------- ----------
OPERATING ACTIVITIES (millions)
Net Income $29 $55
Non-cash Items Included in Net Income
Depreciation and amortization 127 134
Deferred income taxes and investment
tax credits 5 27
Provision for CPL Final Order 41 --
Changes in Assets and Liabilities
Accounts receivable 61 47
Fuel recovery (6) (26)
Accounts payable (89) (111)
Accrued taxes (230) (86)
Other 30 (40)
------- -------
(32) --
------- -------
INVESTING ACTIVITIES
Construction expenditures (97) (102)
Acquisition expenditures -- (1,245)
CSW Energy/CSW International projects (27) (2)
Sale of National Grid assets -- 99
Other (5) (17)
------- -------
(129) (1,267)
------- -------
FINANCING ACTIVITIES
Common stock sold 19 424
Proceeds from issuance of long-term debt -- 30
SEEBOARD acquisition financing -- 773
Retirement of long-term debt (1) (27)
Special deposits for the reacquisition
of preferred stock (77) --
Other financing activities 16 --
Change in short-term debt 169 20
Payment of dividends (96) (88)
------- -------
30 1,132
------- -------
Effect of exchange rate changes on cash and
cash equivalents (3) (4)
NET CHANGE IN CASH AND CASH EQUIVALENTS (134) (139)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 254 401
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $120 $262
======= =======
SUPPLEMENTARY INFORMATION
Interest paid less amounts capitalized $80 $83
======= =======
Income taxes paid $238 $91
======= =======
The accompanying notes to consolidated financial statements are an
integral part of these statements.
<PAGE> 10
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES
Set forth below is information concerning the consolidated results of
operations for CSW for the three month comparative periods ended March 31, 1997
and March 31, 1996. For information concerning the results of operations for
each of the U.S. Electric Operating Companies, see the discussions under the
heading RESULTS OF OPERATIONS following the financial statements of each of the
U.S. Electric Operating Companies.
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1997 AND 1996
NET INCOME FOR COMMON STOCK. Net income for common stock decreased from
$51 million in the first quarter of 1996 to $25 million in the first quarter of
1997 due in part to the provision recorded in 1997 for the CPL Final Order of
approximately $41 million (approximately $27 million, net of tax). Other factors
contributing to the decrease were an approximate $16 million, net of tax charge
in the first quarter of 1997 related to CSW's El Paso litigation; the absence in
1997 of Transok's earnings that were present in 1996; and increased operating
and maintenance expense. Partially offsetting these reductions in net income for
common stock were increased non-fuel electric revenues at the U.S. Electric
Operating Companies, as discussed below, and increased earnings from CSW's
investment in SEEBOARD resulting primarily from financing activities associated
with the SEEBOARD acquisition and a favorable movement in the exchange rate
between the British pound and the dollar. See NOTE 6. CPL RATE REVIEW DOCKET NO.
14965 for additional information relating to the CPL Final Order. See NOTE 2.
LITIGATION AND REGULATORY PROCEEDINGS for additional information on CSW's El
Paso litigation.
In the first quarter of 1997, the U.S. Electric Operating Companies and
CSW's investment in SEEBOARD contributed the following percentages to CSW's
results of operations. Certain of these proportions are not indicative of
typical contributions due to the impact of the CPL Final Order and the charge
CSW recorded for the El Paso litigation.
CORPORATE
U.S. SEEBOARD TOTAL ITEMS AND
ELECTRIC INVESTMENT ELECTRIC OTHER TOTAL
-------------------------------------------------------
Operating Revenues 58% 41% 99% 1% 100%
Operating Income 64% 46% 110% (10)% 100%
Net Income for CSW
Common 61% 127% 188% (88)% 100%
U.S. ELECTRIC REVENUES. U.S. Electric revenues increased $77 million,
or 12% in the first quarter of 1997 compared to the same period a year ago due
to several factors, including an $18 million increase in fuel revenues because
of higher fuel costs which are discussed below. The remaining increase results
from higher non-fuel revenues, including a 3.4% increase in retail MWH sales
resulting from increased customer usage and growth; approximately $16 million of
new transmission access revenues at CPL and WTU related to FERC Order No. 888
and the Texas Commission's rules regarding transmission access and pricing, the
effect of which is almost entirely offset by a corresponding increase in
transmission expense; the absence in 1997 of the provision for rate refund at
CPL related to the CPL 1996 Fuel Agreement and the effect of the settlement in
principle of the rate case expense phase of Docket No. 17280, which provided for
approximately $13 million of rate case expenses to be recovered as an offset to
the refund in CPL's rate proceeding, Docket No. 14965.
<PAGE> 11
CSW RESULTS OF OPERATIONS (CONTINUED)
UNITED KINGDOM REVENUES. United Kingdom revenues decreased $16 million,
or 3% in the first quarter of 1997 compared to the first quarter of 1996 due
primarily to a reduction in the fossil fuel levy collected on behalf of the
United Kingdom government and the adverse effect of mild weather on sales volume
partially offset by the exchange rate movement between the British pound and the
dollar.
U.S. ELECTRIC FUEL. U.S. Electric fuel expense increased $15 million to
$262 million in the first quarter of 1997 compared to the first quarter of 1996
due in part to an increase in the average cost of fuel from $1.77 per MMbtu to
$1.84 per MMbtu, reflecting higher spot market natural gas prices. Also
contributing to the increase was an $8.8 million reduction in fuel expense
recorded in the first quarter of 1996 in accordance with the CPL 1996 Fuel
Agreement. These increases in fuel expense were partially offset by lower spot
market coal prices, lower coal delivery costs and the decrease in gas generation
at PSO, SWEPCO and WTU which resulted from its higher relative price.
U.S. ELECTRIC PURCHASED POWER. U.S. Electric purchased power increased
$8 million to $25 million in the first quarter of 1997 compared to the same
period a year ago due primarily to increased purchases of economy energy at a
higher cost and other purchases at CPL which resulted from a scheduled nuclear
refueling at STP and an overhaul of a coal-fired generating plant.
UNITED KINGDOM COST OF SALES. United Kingdom cost of sales decreased
$31 million, or 8%, in the first quarter of 1997 due primarily to the
aforementioned reduced fossil fuel levy and impact of mild weather on sales
volume.
OPERATING AND MAINTENANCE. Operating and maintenance expense increased
$31 million to $252 million in the first quarter of 1997 compared to the same
period in 1996 due in part to new transmission access expense of approximately
$15 million at CPL and WTU related to FERC Order No. 888 and the Texas
Commission's rules regarding transmission access and pricing, the effect of
which was more than offset by a corresponding increase in transmission revenue.
Also contributing to the increase were the write-off at CPL of certain
previously deferred rate case expenses of approximately $11 million in
accordance with the settlement in principle of the rate case expense phase of
CPL's current rate case and additional charges recorded in the first quarter of
1997 related to the restructuring that CSW undertook in 1996.
PROVISION FOR CPL FINAL ORDER. CPL recorded a $41 million reserve in
the first quarter of 1997 related to the CPL Final Order issued by the Texas
Commission in Docket No. 14965. See NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965
for additional information.
EL PASO MERGER LITIGATION. CSW recorded a $25 million charge in the
first quarter of 1997 for litigation related to the termination of CSW's
proposed merger with El Paso. See NOTE 2. LITIGATION AND REGULATORY PROCEEDINGS
for additional information.
TAXES, OTHER THAN INCOME. Taxes, other than income increased $5 million
to $48 million in the first quarter of 1997 compared to the same period a year
ago due primarily to higher recorded state franchise tax expense at CPL and
increased ad valorem tax recorded at PSO and SWEPCO due to higher property
assessments.
<PAGE> 12
CSW RESULTS OF OPERATIONS (CONTINUED)
INCOME TAXES. Income tax expense decreased $17 million to $11 million
in the first quarter of 1997 due primarily to the tax benefits associated with
both the CPL Final Order and CSW's El Paso litigation.
INTEREST CHARGES. Interest charges decreased $2 million to $103 million
in the first quarter of 1997. Interest on long-term debt increased $5 million
due primarily to a full quarter of interest expense in 1997 compared to a
partial quarter of interest expense in 1996 related to the SEEBOARD acquisition
financing and the addition in 1997 of interest expense resulting from a fourth
quarter 1996 debt issuance by CSW Energy. The increase in interest on long-term
debt was more than offset by a $7 million decrease in interest on short-term
debt due primarily to lower levels of short-term borrowings.
DISCONTINUED OPERATIONS. The results of Transok are shown separately in
discontinued operations. CSW's results for the quarter ended March 31, 1997 do
not reflect any earnings from Transok because Transok was sold in June 1996. See
NOTE 7. DISCONTINUED OPERATIONS for additional information, related to the sale
of Transok.
<PAGE> 13
CPL
CENTRAL POWER AND LIGHT COMPANY
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
<PAGE> 14
CENTRAL POWER AND LIGHT COMPANY
STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31,
------------------------
1997 1996
---------- ----------
(thousands)
ELECTRIC OPERATING REVENUES $314,661 $253,388
OPERATING EXPENSES AND TAXES
Fuel 78,260 64,017
Purchased power 17,601 12,435
Other operating 75,771 50,520
Provision for CPL Final Order 40,923 --
Maintenance 14,984 10,344
Depreciation and amortization 38,373 39,595
Taxes, other than income 21,257 18,354
Income taxes (2,711) 9,998
--------- ---------
284,458 205,263
--------- ---------
OPERATING INCOME 30,203 48,125
--------- ---------
OTHER INCOME AND DEDUCTIONS
Allowance for equity funds used during construction 485 --
Other (286) 1,748
--------- ---------
199 1,748
--------- ---------
INCOME BEFORE INTEREST CHARGES 30,402 49,873
--------- ---------
INTEREST CHARGES
Interest on long-term debt 26,975 27,269
Interest on short-term debt and other 7,127 6,663
Allowance for borrowed funds used
during construction (493) (679)
--------- ---------
33,609 33,253
--------- ---------
NET INCOME (LOSS) (3,207) 16,620
Preferred stock dividends 3,433 3,437
--------- ---------
NET INCOME (LOSS) FOR COMMON STOCK $(6,640) $13,183
========= =========
The accompanying notes to financial statements as
they relate to CPL are an integral part of these
statements.
<PAGE> 15
CENTRAL POWER AND LIGHT COMPANY
BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
ASSETS (thousands)
ELECTRIC UTILITY PLANT
Production $3,100,946 $3,102,929
Transmission 506,589 505,801
Distribution 969,177 956,928
General 273,472 271,347
Construction work in progress 105,617 95,336
Nuclear fuel 184,553 184,229
---------- ----------
5,140,354 5,116,570
Less - Accumulated depreciation and amortization 1,736,637 1,697,552
---------- ----------
3,403,717 3,419,018
---------- ----------
CURRENT ASSETS
Cash 3,061 3,299
Special deposits 77,576 113
Accounts receivable 52,321 53,038
Materials and supplies, at average cost 76,903 75,732
Fuel inventory 12,381 15,461
Under-recovered fuel costs 31,114 26,298
Prepayments 1,742 4,371
---------- ----------
255,098 178,312
---------- ----------
DEFERRED CHARGES AND OTHER ASSETS
Deferred STP costs 486,699 486,978
Mirror CWIP asset 295,596 298,708
Income tax related regulatory assets, net 332,594 335,226
Other 97,376 110,021
---------- ----------
1,212,265 1,230,933
---------- ----------
$4,871,080 $4,828,263
========== ==========
The accompanying notes to financial statements as
they relate to CPL are an integral part of
these statements.
<PAGE> 16
CENTRAL POWER AND LIGHT COMPANY
BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
CAPITALIZATION AND LIABILITIES (thousands)
CAPITALIZATION
Common stock: $25 par value
Authorized shares: 12,000,000
Issued and outstanding shares: 6,755,535 $168,888 $168,888
Paid-in capital 405,000 405,000
Retained earnings 839,292 868,932
---------- ----------
1,413,180 1,442,820
---------- ----------
Preferred stock 250,351 250,351
Long-term debt 1,324,984 1,323,054
---------- ----------
2,988,515 3,016,225
---------- ----------
CURRENT LIABILITIES
Long-term debt due within twelve months 200,000 200,000
Advances from affiliates 114,112 52,525
Payables to affiliates 29,440 23,995
Accounts payable 44,708 45,946
Accrued taxes 23,127 64,207
Accrued interest 36,294 31,566
Refund due customers 47,336 43,266
Provision for CPL Final Order 40,923 --
Accumulated deferred income taxes 9,063 7,310
Other 17,969 19,048
---------- ----------
562,972 487,863
---------- ----------
DEFERRED CREDITS
Accumulated deferred income taxes 1,158,920 1,162,051
Investment tax credits 145,743 147,191
Other 14,930 14,933
---------- ----------
1,319,593 1,324,175
---------- ----------
$4,871,080 $4,828,263
========== ==========
The accompanying notes to financial statements as
they relate to CPL are an integral part of
these statements.
<PAGE> 17
CENTRAL POWER AND LIGHT COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
--------------------------
1997 1996
-------- --------
OPERATING ACTIVITIES (thousands)
Net Income $(3,207) $16,620
Non-cash Items Included in Net Income
Depreciation and amortization 43,353 45,355
Deferred income taxes and
investment tax credits (194) 3,063
Establishment of regulatory assets -- 6,313
Provision for CPL Final Order 40,923 --
Changes in Assets and Liabilities
Accounts receivable 717 (3,922)
Fuel inventory 3,080 3,364
Accounts payable 3,773 (13,022)
Accrued taxes (41,080) (28,261)
Fuel recovery (4,816) (4,422)
Refund due customers 4,070 22,678
Other 21,208 (10,983)
-------- --------
67,827 36,783
-------- --------
INVESTING ACTIVITIES
Construction expenditures (26,871) (21,049)
Other 1,006 (416)
-------- --------
(25,865) (21,465)
-------- --------
FINANCING ACTIVITIES
Reacquisition of long-term debt -- (231)
Special deposits for the reaquisition
of preferred stock (77,463) --
Change in advances from affiliates 61,587 11,199
Payment of dividends (26,283) (28,656)
Other (41) (85)
-------- --------
(42,200) (17,773)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (238) (2,455)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,299 2,883
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,061 $428
======== ========
SUPPLEMENTARY INFORMATION
Interest paid less amounts capitalized $22,685 $25,276
======== ========
Income taxes paid $18,111 $12,753
======== ========
The accompanying notes to financial statements as
they relate to CPL are an integral part of these
statements.
<PAGE> 18
CENTRAL POWER AND LIGHT COMPANY
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1997 AND 1996
NET INCOME FOR COMMON STOCK. Net income for common stock decreased from
$13.2 million for the first quarter of 1996 to a loss of $6.6 million during the
first quarter of 1997. The major reason for the decrease was the recording of
the Provision for CPL Final Order of approximately $41 million (approximately
$27 million, net of tax). See NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965 for
more information related to the CPL Final Order. This decrease was partially
offset by an increase in non-fuel electric revenues.
ELECTRIC OPERATING REVENUES. Total electric operating revenues
increased approximately $61 million or 24% in the first quarter of 1997 compared
to the first quarter of 1996 due to several factors, including an increase in
fuel revenues because of higher fuel costs which are discussed below; an
increase of approximately $9 million in non-fuel revenues resulting from a 7%
increase in retail MWH sales due primarily to increased customer demand; an
increase in transmission revenues of approximately $11.8 million as a result of
the implementation of open access tariffs in accordance with FERC Order No. 888
and the Texas Commission rules regarding transmission access and pricing, the
effect of which was almost entirely offset by a corresponding increase in
transmission expense; and a decrease in the provision for rate refund, resulting
from the absence in 1997 of the $14.4 million provision for refund related to
the CPL 1996 Fuel Agreement recorded in the first quarter of 1996, and the
effect of the settlement in principle of the rate case expense phase of Docket
No. 17280, which provided for approximately $13 million of rate case expenses to
be recovered as an offset to the refund in CPL's rate proceeding, Docket No.
14965.
FUEL. Fuel expense increased $14.2 million, or 22%, in the first
quarter of 1997 compared with the first quarter of 1996 primarily as a result of
an increase in the average unit cost of fuel from $1.57 per MMbtu in the first
quarter of 1996 to $1.78 per MMbtu in the first quarter of 1997. This increase
resulted primarily from higher spot market prices for natural gas. Also
contributing to this increase was a one-time $8.8 million reduction in fuel
expense recorded in the first quarter of 1996 in accordance with the CPL 1996
Fuel Agreement.
PURCHASED POWER. Purchased power expense increased 42% from $12.4
million during the first quarter of 1996 to $17.6 million in the first quarter
of 1997 due primarily to the rise in natural gas prices discussed above, which
affected not only the cost of cogeneration purchases but also the cost of
additional purchased power resulting from the scheduled refueling outage of STP
Unit 2 and the overhaul of a coal-fired generation plant in the first quarter of
1997.
OTHER OPERATING. Other operating expense increased 50% to $75.8 million
in the first quarter of 1997 due primarily to an approximate $11.5 million
increase in transmission operations expenses as a result of the implementation
of open access tariffs in accordance with FERC Order No. 888 and the Texas
Commission rules regarding transmission access and pricing, the effect of which
was more than offset by a corresponding increase in transmission revenue; the
write-off of approximately $11 million in previously deferred rate case expenses
in accordance with the settlement in principle of the rate case expense phase of
CPL's current rate case; and additional expenses recorded in the first quarter
of 1997 associated with the restructuring that CSW undertook in 1996. These
increases were offset in part by reductions in pension expense and other
employee related expenses.
<PAGE> 19
CPL RESULTS OF OPERATIONS (CONTINUED)
PROVISION FOR CPL FINAL ORDER. CPL recorded a $40.9 million reserve in
the first quarter of 1997 related to the CPL Final Order issued by the Texas
Commission in Docket No. 14965. See NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965
for additional information.
MAINTENANCE. Maintenance expenses increased to approximately $15.0
million in the first quarter of 1997 from approximately $10.3 million in the
first quarter of 1996 due primarily to the scheduled refueling outage of STP
Unit 2 during the first quarter of 1997.
TAXES, OTHER THAN INCOME. Taxes, other than income increased
approximately $2.9 million in the first quarter of 1997 compared to the first
quarter of 1996 due primarily to increased state franchise taxes.
INCOME TAXES. Income taxes decreased approximately $12.7 million in the
first quarter of 1997 compared with the first quarter of 1996 resulting from the
income tax benefits associated with the Provision for CPL Final Order.
OTHER INCOME AND DEDUCTIONS. Other income and deductions decreased due
primarily to the write-off of certain plant development costs of approximately
$1.3 million during the first quarter of 1997.
<PAGE>20
PSO
PUBLIC SERVICE COMPANY OF OKLAHOMA
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
<PAGE> 21
PUBLIC SERVICE COMPANY OF OKLAHOMA
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31,
-----------------------------
1997 1996
--------- ---------
(thousands)
ELECTRIC OPERATING REVENUES $155,165 $147,419
OPERATING EXPENSES AND TAXES
Fuel 62,859 62,548
Purchased power 11,925 8,664
Other operating 27,712 28,080
Maintenance 5,936 6,198
Depreciation and amortization 19,783 19,031
Taxes, other than income 7,300 6,776
Income taxes 2,972 2,118
--------- ---------
138,487 133,415
--------- ---------
OPERATING INCOME 16,678 14,004
--------- ---------
OTHER INCOME AND DEDUCTIONS
Allowance for equity funds used during
construction 90 (1)
Other (252) 243
--------- ---------
(162) 242
--------- ---------
INCOME BEFORE INTEREST CHARGES 16,516 14,246
--------- ---------
INTEREST CHARGES
Interest on long-term debt 7,618 7,438
Interest on short-term debt and other 1,612 1,689
Allowance for borrowed funds used
during construction (477) (359)
--------- ---------
8,753 8,768
--------- ---------
NET INCOME 7,763 5,478
Preferred stock dividends 204 204
--------- ---------
NET INCOME FOR COMMON STOCK $7,559 $5,274
========= =========
The accompanying notes to consolidated financial
statements as they relate to PSO are an integral
part of these statements.
<PAGE> 22
PUBLIC SERVICE COMPANY OF OKLAHOMA
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
ASSETS (thousands)
ELECTRIC UTILITY PLANT
Production $903,219 $902,813
Transmission 369,791 368,280
Distribution 784,506 773,590
General 195,405 186,252
Construction work in progress 50,397 59,241
---------- ----------
2,303,318 2,290,176
Less - Accumulated depreciation and
amortization 1,003,783 987,283
---------- ----------
1,299,535 1,302,893
---------- ----------
CURRENT ASSETS
Cash 6,856 1,479
Accounts receivable 21,900 11,069
Materials and supplies, at average cost 33,515 34,542
Fuel inventory 14,749 14,061
Accumulated deferred income taxes 3,816 2,558
Prepayments 1,919 2,991
---------- ----------
82,755 66,700
---------- ----------
DEFERRED CHARGES AND OTHER ASSETS 62,558 62,004
---------- ----------
$1,444,848 $1,431,597
========== ==========
The accompanying notes to consolidated financial
statements as they relate to PSO are an integral
part of these statements.
<PAGE> 23
PUBLIC SERVICE COMPANY OF OKLAHOMA
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
CAPITALIZATION AND LIABILITIES (thousands)
CAPITALIZATION
Common stock: $15 par value
Authorized shares: 11,000,000
Issued shares: 10,482,000
Outstanding shares: 9,013,000 $157,230 $157,230
Paid-in capital 180,000 180,000
Retained earnings 153,502 145,943
---------- ----------
490,732 483,173
---------- ----------
Preferred stock 19,826 19,826
Long-term debt 420,681 420,301
---------- ----------
931,239 923,300
---------- ----------
CURRENT LIABILITIES
Advances from affiliates 70,174 42,867
Payables to affiliates 20,085 27,425
Accounts payable 28,542 47,604
Payables to customers 14,601 14,329
Accrued taxes 16,702 12,306
Accrued interest 10,890 9,193
Other 5,871 7,421
---------- ----------
166,865 161,145
---------- ----------
DEFERRED CREDITS
Accumulated deferred income taxes 252,249 251,007
Investment tax credits 42,742 43,438
Income tax related regulatory
liabilities, net 45,017 46,007
Other 6,736 6,700
---------- ----------
346,744 347,152
---------- ----------
$1,444,848 $1,431,597
========== ==========
The accompanying notes to consolidated financial
statements as they relate to PSO are an integral
part of these statements.
<PAGE> 24
PUBLIC SERVICE COMPANY OF OKLAHOMA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
-------------------------
1997 1996
-------- --------
OPERATING ACTIVITIES (thousands)
Net Income $7,763 $5,478
Non-cash Items Included in Net Income
Depreciation and amortization 21,276 20,519
Deferred income taxes and investment tax
credits (1,702) 3,845
Changes in Assets and Liabilities
Accounts receivable (10,831) (1,223)
Prepayments 1,072 879
Accounts payable (26,681) (4,469)
Accrued taxes 4,396 (8,662)
Other 3,053 42
-------- --------
(1,654) 16,409
-------- --------
INVESTING ACTIVITIES
Construction expenditures (19,423) (18,050)
Other (649) (733)
-------- --------
(20,072) (18,783)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt -- 29,799
Retirement of long-term debt -- (25,000)
Change in advances from affiliates 27,307 6,019
Payment of dividends (204) (7,228)
-------- --------
27,103 3,590
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 5,377 1,216
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,479 744
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $6,856 $1,960
======== ========
SUPPLEMENTARY INFORMATION
Interest paid less amounts capitalized $6,644 $6,458
======== ========
Income taxes paid $3,611 $495
======== ========
The accompanying notes to consolidated financial
statements as they relate to PSO are an integral
part of these statements.
<PAGE> 25
PUBLIC SERVICE COMPANY OF OKLAHOMA
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1997 AND 1996
NET INCOME FOR COMMON STOCK. Net income for common stock increased 43%
to $7.6 million during the first quarter of 1997 from $5.3 million during the
first quarter of 1996. The increase resulted primarily from higher non-fuel
revenues which were partially offset by increased depreciation and higher ad
valorem taxes.
ELECTRIC OPERATING REVENUES. Electric operating revenues were $155.2
million during the first quarter of 1997, a 5% increase from $147.4 million
during the first quarter of 1996. The increase was due primarily to increased
fuel related revenue, as discussed below, as well as higher non-fuel related
revenue.
FUEL. Fuel expense was relatively constant at $62.9 million during the
first quarter of 1997 compared to $62.5 million in the first quarter of 1996.
During the first quarter of 1997, PSO experienced an over-recovery of fuel costs
compared to an under-recovery of fuel costs in the first quarter of 1996. The
resulting increase in fuel expense was virtually offset by a 9% decrease in
generation and lower average unit fuel costs in 1997. The average unit fuel
costs declined from $2.10 per MMbtu in the first quarter of 1996 to $1.95 per
MMbtu in the first quarter of 1997. The decline in the average unit fuel costs
was due primarily to a change in the mix of fuel used, utilizing lower cost coal
in place of higher cost spot market natural gas to the extent possible. The
decrease in generation is attributable to the higher spot market natural gas
prices, which also resulted in an increase in purchased power as discussed
below.
PURCHASED POWER. Purchased power expenses increased approximately 38%
to $11.9 million for the first quarter of 1997 from $8.7 million in the same
period of 1996. The increase was due primarily to increases in the amount of
economy energy purchased.
OTHER OPERATING. Other operating expenses were $27.7 million during the
first quarter of 1997 compared to $28.1 million in the first quarter of 1996.
The decrease was due primarily to lower customer accounting and employee pension
expenses. Partially offsetting this decrease was the recognition of additional
employee related expenses associated with the restructuring that CSW undertook
in 1996.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 4% to $19.8 million in the first quarter of 1997 from $19.0 million in
the first quarter of 1996 as a result of an increase in depreciable property.
TAXES, OTHER THAN INCOME. Taxes, other than income were $7.3 million in
1997, an 8% increase from $6.8 million in the first quarter of 1996. This
increase was due primarily to higher ad valorem taxes in the first quarter of
1997.
INCOME TAXES. Income taxes were $3.0 million in the first quarter of
1997 compared to $2.1 million in the same period of 1996 due primarily to higher
taxable income in 1997.
<PAGE> 26
SWEPCO
SOUTHWESTERN ELECTRIC POWER COMPANY
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
<PAGE> 27
SOUTHWESTERN ELECTRIC POWER COMPANY
STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31
-----------------------------
1997 1996
--------- ---------
(thousands)
ELECTRIC OPERATING REVENUES $203,280 $200,881
OPERATING EXPENSES AND TAXES
Fuel 87,596 89,312
Purchased power 5,131 5,334
Other operating 32,547 31,894
Maintenance 9,040 9,106
Depreciation and amortization 23,424 22,241
Taxes, other than income 13,396 11,911
Income taxes 6,072 4,734
--------- ---------
177,206 174,532
--------- ---------
OPERATING INCOME 26,074 26,349
--------- ---------
OTHER INCOME AND DEDUCTIONS
Allowance for equity funds used
during construction -- 324
Other (297) 762
--------- ---------
(297) 1,086
--------- ---------
INCOME BEFORE INTEREST CHARGES 25,777 27,435
--------- ---------
INTEREST CHARGES
Interest on long-term debt 10,543 11,000
Interest on short-term debt and other 2,111 2,423
Allowance for borrowed funds used
during construction (399) (755)
--------- ---------
12,255 12,668
--------- ---------
NET INCOME 13,522 14,767
Preferred stock dividends 758 779
--------- ---------
NET INCOME FOR COMMON STOCK $12,764 $13,988
========= =========
The accompanying notes to financial statements as
they relate to SWEPCO are an integral part of
these statements.
<PAGE> 28
SOUTHWESTERN ELECTRIC POWER COMPANY
BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
ASSETS (thousands)
ELECTRIC UTILITY PLANT
Production $1,371,046 $1,407,134
Transmission 466,257 463,425
Distribution 851,629 844,503
General 288,520 283,878
Construction work in progress 32,817 45,374
---------- ----------
3,010,269 3,044,314
Less - Accumulated depreciation 1,173,721 1,192,356
---------- ----------
1,836,548 1,851,958
---------- ----------
CURRENT ASSETS
Cash 1,106 1,879
Accounts receivable 51,592 68,140
Materials and supplies, at average cost 28,659 29,265
Fuel inventory 43,395 55,775
Under-recovered fuel costs 7,258 9,120
Prepayments and other 15,356 13,499
---------- ----------
147,366 177,678
---------- ----------
DEFERRED CHARGES AND OTHER ASSETS 78,442 69,520
---------- ----------
$2,062,356 $2,099,156
========== ==========
The accompanying notes to financial statements as
they relate to SWEPCO are an integral part of
these statements.
<PAGE> 29
SOUTHWESTERN ELECTRIC POWER COMPANY
BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
CAPITALIZATION AND LIABILITIES (thousands)
CAPITALIZATION
Common stock: $18 par value
Authorized shares: 7,600,000
Issued and outstanding shares: 7,536,640 $135,660 $135,660
Paid-in capital 245,000 245,000
Retained earnings 320,564 321,801
---------- ----------
701,224 702,461
---------- ----------
Preferred stock
Not subject to mandatory redemption 16,032 16,032
Subject to mandatory redemption 32,464 32,464
Long-term debt 597,911 597,151
---------- ----------
1,347,631 1,348,108
---------- ----------
CURRENT LIABILITIES
Long-term debt and preferred stock due within
twelve months 2,770 3,760
Advances from affiliates 64,906 57,495
Accounts payable 35,817 48,826
Payable to affiliates 54,922 68,708
Customer deposits 10,369 10,497
Accrued taxes 25,940 25,241
Accumulated deferred income taxes 3,567 4,162
Accrued interest 12,547 14,782
Other 16,126 27,449
---------- ----------
226,964 260,920
---------- ----------
DEFERRED CREDITS
Accumulated deferred income taxes 373,572 372,552
Investment tax credits 70,342 71,507
Income tax related regulatory liabilities, net 34,839 36,106
Other 9,008 9,963
---------- ----------
487,761 490,128
---------- ----------
$2,062,356 $2,099,156
========== ==========
The accompanying notes to financial statements as
they relate to SWEPCO are an integral part of
these statements.
<PAGE> 30
SOUTHWESTERN ELECTRIC POWER COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
-------------------------
1997 1996
-------- --------
OPERATING ACTIVITIES (thousands)
Net Income $13,522 $14,767
Non-cash Items Included in Net Income
Depreciation and amortization 25,297 24,823
Deferred income taxes and investment tax
credits (2,007) 4,888
Changes in Assets and Liabilities
Accounts receivable 16,548 (12,556)
Fuel inventory 12,380 1,212
Deferred charges and other assets (8,922) 3,313
Accounts payable (12,396) (9,864)
Payable to affiliates (13,786) 8,317
Accrued interest (2,235) (5,265)
Fuel recovery 1,862 (14,745)
Other (12,180) (9,048)
-------- --------
18,083 5,842
-------- --------
INVESTING ACTIVITIES
Construction expenditures (10,116) (15,926)
Other (1,127) (2,098)
-------- --------
(11,243) (18,024)
-------- --------
FINANCING ACTIVITIES
Retirement of long-term debt (990) (1,645)
Change in advances from affiliates 7,411 23,491
Payment of dividends (14,034) (10,036)
-------- --------
(7,613) 11,810
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (773) (372)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,879 1,702
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,106 $1,330
======== ========
SUPPLEMENTARY INFORMATION
Interest paid less amounts capitalized $14,813 $17,321
======== ========
Income taxes paid $6,970 $541
======== ========
The accompanying notes to financial statements as they
relate to SWEPCO are an integral part of these
statements.
<PAGE> 31
SOUTHWESTERN ELECTRIC POWER COMPANY
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1997 AND 1996
NET INCOME FOR COMMON STOCK. Net income for common stock for the first
quarter of 1997 was $12.8 million, a decrease of $1.2 million, or 9%, from
approximately $14.0 million for the same period of 1996. The decrease resulted
primarily from higher depreciation and amortization expenses and increased tax
expenses which were offset in part by increased non-fuel revenues.
ELECTRIC OPERATING REVENUES. Electric operating revenues were
relatively stable, increasing 1% to $203.3 million during the first quarter of
1997 compared to $200.9 million in the first quarter of 1996. The increase is
attributable to increased non-fuel revenue as a result of a 3% increase in
retail KWH sales due primarily to increased customer growth and demand combined
with an increase in off-system wholesale sales. Electric operating revenues were
also affected by decreased fuel recovery.
FUEL. Fuel expense was $87.6 million during the first quarter of 1997,
a 2% decrease from $89.3 million for the same period of 1996. The decrease was
due primarily to a decrease in average unit fuel costs from $1.83 per MMbtu in
1996 to $1.68 per MMbtu in 1997 due to a decline in the delivered cost of coal
resulting from lower transportation charges as well as purchases of lower priced
spot market coal. A decrease in natural gas generation because of its relative
higher cost per MMbtu also contributed to the lower fuel expense during the
first quarter of 1997.
OTHER OPERATING EXPENSES. Other operating expenses were $32.5 million
during the first quarter of 1997, an increase of $0.7 million, or 2%, from the
comparable period of 1996. The increase was due primarily to additional expenses
recorded in the first quarter of 1997 associated with the restructuring that CSW
undertook in 1996 which were offset in part by decreased pension expenses and
decreased outside services expenses.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
$1.2 million or 5% during the first quarter of 1997 compared to the same period
of 1996 due primarily to an increase in depreciable plant.
TAXES, OTHER THAN INCOME. Taxes, other than income increased
approximately $1.5 million, or 12%, during the first quarter of 1997 compared to
the same period of 1996 due primarily to increased ad valorem taxes and payroll
taxes which were offset in part by decreased state franchise taxes.
INCOME TAXES. Income taxes increased approximately $1.3 million, or
28%, during the first quarter of 1997 compared to the same period of 1996 due
primarily to an overstatement of permanent tax differences in the first quarter
of 1997 which has subsequently been adjusted in the second quarter.
OTHER INCOME AND DEDUCTIONS. Other income and deductions decreased
approximately $1.4 million during the first quarter of 1997 compared to the
first quarter of 1996 as a result of charges associated with the write-off of
certain plant development costs in the first quarter of 1997. In addition,
allowance for funds used during construction was lower in the first quarter of
1997 compared to 1996.
<PAGE> 32
WTU
WEST TEXAS UTILITIES COMPANY
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
<PAGE> 33
WEST TEXAS UTILITIES COMPANY
STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31,
----------------------------
1997 1996
-------- --------
(thousands)
ELECTRIC OPERATING REVENUES $92,646 $80,789
OPERATING EXPENSES AND TAXES
Fuel 32,885 31,983
Purchased power 11,397 5,916
Other operating 20,710 16,475
Maintenance 3,084 3,219
Depreciation and amortization 10,091 9,678
Taxes, other than income 6,096 5,598
Income taxes 498 165
-------- --------
84,761 73,034
-------- --------
OPERATING INCOME 7,885 7,755
-------- --------
OTHER INCOME AND DEDUCTIONS
Allowance for equity funds used during
construction 99 138
Other 49 249
-------- --------
148 387
-------- --------
INCOME BEFORE INTEREST CHARGES 8,033 8,142
-------- --------
INTEREST CHARGES
Interest on long-term debt 5,088 5,296
Interest on short-term debt and other 1,314 1,378
Allowance for borrowed funds used
during construction (230) (286)
-------- --------
6,172 6,388
-------- --------
NET INCOME 1,861 1,754
Preferred stock dividends 66 66
-------- --------
NET INCOME FOR COMMON STOCK $1,795 $1,688
======== ========
The accompanying notes to financial statements as they relate
to WTU are an integral part of these statements.
<PAGE> 34
WEST TEXAS UTILITIES COMPANY
BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
---------- ----------
ASSETS (thousands)
ELECTRIC UTILITY PLANT
Production $417,778 $417,467
Transmission 201,581 200,688
Distribution 350,840 347,328
General 96,873 92,622
Construction work in progress 24,486 30,036
---------- ----------
1,091,558 1,088,141
Less - Accumulated depreciation and amortization 421,795 414,777
---------- ----------
669,763 673,364
---------- ----------
CURRENT ASSETS
Cash 409 664
Accounts receivable 30,375 24,123
Materials and supplies, at average cost 16,747 15,966
Fuel inventory 8,193 8,140
Coal inventory 8,332 8,534
Accumulated deferred income taxes -- 1,079
Under-recovered fuel costs 14,105 7,857
Prepayments and other 2,980 2,435
---------- ----------
81,141 68,798
---------- ----------
DEFERRED CHARGES AND OTHER ASSETS
Deferred Oklaunion costs 21,433 22,365
Restructuring costs 10,382 10,854
Other 33,679 34,998
---------- ----------
65,494 68,217
---------- ----------
$816,398 $810,379
========== ==========
The accompanying notes to financial statements as they relate
to WTU are an integral part of these statements.
<PAGE> 35
WEST TEXAS UTILITIES COMPANY
BALANCE SHEETS
March 31, December 31,
1997 1996
(unaudited) (audited)
-------- --------
CAPITALIZATION AND LIABILITIES (thousands)
CAPITALIZATION
Common stock: $25 par value
Authorized shares: 7,800,000
Issued and outstanding shares: 5,488,560 $137,214 $137,214
Paid-in capital 2,236 2,236
Retained earnings 120,872 123,077
-------- --------
260,322 262,527
-------- --------
Preferred stock 6,291 6,291
Long-term debt 275,963 275,070
-------- --------
542,576 543,888
-------- --------
CURRENT LIABILITIES
Advances from affiliates 33,054 14,833
Payables to affiliates 9,802 13,578
Accounts payable 18,082 19,669
Accrued taxes 5,157 13,463
Accrued interest 9,178 5,403
Accumulated deferred income taxes 466 --
Other 3,155 4,124
-------- --------
78,894 71,070
-------- --------
DEFERRED CREDITS
Accumulated deferred income taxes 144,160 144,146
Investment tax credits 28,909 29,239
Income tax related regulatory liabilities, net 16,724 16,918
Other 5,135 5,118
-------- --------
194,928 195,421
-------- --------
$816,398 $810,379
======== ========
The accompanying notes to financial statements as they relate
to WTU are an integral part of these statements.
<PAGE> 36
WEST TEXAS UTILITIES COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
--------------------------
1997 1996
-------- --------
OPERATING ACTIVITIES (thousands)
Net Income $1,861 $1,754
Non-cash Items Included in Net Income
Depreciation and amortization 10,936 10,144
Deferred income taxes and investment
tax credits 1,035 854
Changes in Assets and Liabilities
Accounts receivable (6,252) 4,117
Accounts payable (4,591) (6,730)
Accrued taxes (8,306) (7,506)
Accrued interest 3,775 1,694
Fuel recovery (6,248) (2,787)
Other (447) (261)
-------- --------
(8,237) 1,279
-------- --------
INVESTING ACTIVITIES
Construction expenditures (5,361) (9,607)
Other (815) (371)
-------- --------
(6,176) (9,978)
-------- --------
FINANCING ACTIVITIES
Change in advances from affiliates 18,221 13,297
Payment of dividends (4,066) (5,000)
Other -- (7)
-------- --------
14,155 8,290
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (258) (409)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 664 717
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $406 $308
======== ========
SUPPLEMENTARY INFORMATION
Interest paid less amounts capitalized $1,330 $3,733
======== ========
Income taxes paid $1,833 $1,220
======== ========
The accompanying notes to financial statements as they relate
to WTU are an integral part of these statements.
<PAGE> 37
WEST TEXAS UTILITIES COMPANY
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1997 AND 1996
NET INCOME FOR COMMON STOCK. Net income for common stock was relatively
stable at $1.8 million during the first quarter of 1997 compared to $1.7 million
in the first quarter of 1996.
ELECTRIC OPERATING REVENUES. Electric operating revenues increased
approximately $11.9 million or 15% in the first quarter of 1997 compared to the
first quarter of 1996 due to several factors, including a $6.1 million increase
in fuel revenues because of higher fuel costs which are discussed below and a 6%
increase in retail KWH sales resulting primarily from increased customer usage.
Also contributing to the increase was $4.5 million in transmission revenues as a
result of the implementation of open access tariffs in accordance with FERC
Order No. 888 and the Texas Commission rules regarding transmission access and
pricing, the effect of which was almost entirely offset by a corresponding
increase in transmission expense.
FUEL. Fuel expense increased $0.9 million, or 3%, for the first quarter
of 1997 compared to the first quarter of 1996 due primarily to an increase in
average unit fuel costs from $2.06 per MMbtu in 1996 to $2.42 per MMbtu in 1997,
the effect of which was partially offset by an 8% decrease in generation. The
increased unit fuel cost resulted from higher spot market natural gas prices,
which were partially offset by purchases of lower-priced spot market coal.
PURCHASED POWER. Purchased power expenses increased approximately $5.5
million during the first quarter of 1997 compared to the first quarter of 1996,
primarily as a result of additional economy energy purchases at a higher cost
per MWH.
OTHER OPERATING. Other operating expenses increased approximately $4.2
million during the first quarter of 1997 compared to the first quarter of 1996.
The increase was primarily due to a $4.1 million increase in transmission
expenses as a result of the implementation of open access tariffs in accordance
with FERC Order No. 888 and the Texas Commission rules regarding transmission
access and pricing, the effect of which was more than offset by a corresponding
increase in transmission revenue and the recognition of additional
employee-related expenses in the first quarter of 1997 associated with the
restructuring that CSW undertook in 1996. Partially offsetting the increase in
other operating expenses was a decrease in pension expense.
INCOME TAXES. Income taxes increased $0.3 million in the first quarter
of 1997 as compared to the first quarter of 1996 due primarily to higher taxable
income.
<PAGE> 38
INDEX TO APPLICABLE NOTES TO FINANCIAL STATEMENTS
BY REGISTRANT
NOTE 1. PRINCIPLES OF PREPARATION CSW, CPL, PSO, SWEPCO, WTU
NOTE 2. LITIGATION AND REGULATORY CSW, CPL, PSO, SWEPCO, WTU
PROCEEDINGS
NOTE 3. CONTINGENT LIABILITIES CSW, CPL, PSO, SWEPCO, WTU
NOTE 4. COMMON STOCK AND DIVIDENDS CSW, CPL, PSO, SWEPCO, WTU
NOTE 5. INCOME TAXES CSW, CPL, PSO, SWEPCO, WTU
NOTE 6. CPL RATE REVIEW - DOCKET CSW, CPL
NO. 14965
NOTE 7. DISCONTINUED OPERATIONS CSW
<PAGE> 39
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. PRINCIPLES OF PREPARATION
The condensed financial statements of the Registrants included herein
have been prepared by each Registrant pursuant to the rules and regulations of
the SEC. Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
each Registrant believes that the disclosures are adequate to make the
information presented not misleading. These condensed financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the Registrants' Combined Annual Report on Form 10-K for the
year ended December 31, 1996.
The unaudited financial information furnished herewith reflects all
adjustments which are, in the opinion of management of such Registrant,
necessary for a fair statement of the results of operations for the interim
periods. Information for quarterly periods is affected by seasonal variations in
sales, rate changes, timing of fuel expense recovery and other factors.
The financial statements of SEEBOARD and its related entities have been
translated from British pounds to U.S. dollars in accordance with SFAS No. 52.
All balance sheet accounts are translated at the exchange rate at March 31, 1997
and all income statement items are translated at the average exchange rate for
the applicable period. At March 31, 1997, the current exchange rate was
approximately (pound)1.00=$1.64 and the average exchange rate for the three
month period ended March 31, 1997 was approximately (pound)1.00=$1.63. All
resulting translation adjustments are recorded directly to Foreign Currency
Translation Adjustment on CSW's consolidated balance sheets. Cash flow statement
items are translated at a combination of average, historical and current
exchange rates. The effect of the changes in exchange rates on cash and cash
equivalents, resulting from the translation of items at the different exchange
rates, is shown on CSW's Consolidated Statements of Cash Flows in Effect of
Exchange Rate Changes on Cash and Cash Equivalents.
Effective January 1, 1997, CPL and WTU began utilizing the LIFO method
for the valuation of all fossil fuel inventories. Previously, CPL had used the
weighted average cost method and WTU had used the LIFO method for coal and the
weighted average cost method for other fuel inventories. PSO utilizes the LIFO
method. SWEPCO continues to utilize the weighted average cost method pending
approval of the Arkansas Commission to utilize the LIFO method. The change in
accounting did not affect the results of operations due to the regulatory
treatment of such costs.
Certain financial statement items for prior years have been
reclassified to conform to the 1997 presentation.
2. LITIGATION AND REGULATORY PROCEEDINGS
See the Registrants' Combined Annual Report on Form 10-K for the year
ended December 31, 1996 for additional discussion of litigation and regulatory
proceedings. Reference is also made to NOTE 3. COMMITMENTS AND CONTINGENT
LIABILITIES, NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965 and PART II - ITEM 1.
for additional discussion of litigation matters.
<PAGE> 40
TERMINATION OF EL PASO MERGER
In May 1993, CSW entered into a Merger Agreement pursuant to which El
Paso would have emerged from bankruptcy as a wholly owned subsidiary of CSW. On
June 9, 1995, following CSW's notification that it was terminating the Merger
Agreement, El Paso filed suit against CSW seeking a $25 million termination fee
from CSW, damages in excess of $400 million for various contract and tort
claims, punitive damages, interest as permitted by law and certain other costs.
On June 15, 1995, CSW filed suit against El Paso seeking a $25 million
termination fee from El Paso due to El Paso's breach of the Merger Agreement, at
least $3.6 million in rate case expenses incurred by CSW on behalf of El Paso
related to state regulatory merger proceedings and a declaratory judgment that
CSW properly terminated the Merger Agreement. On June 14, 1996, CSW filed an
amended complaint seeking a first priority administrative expense claim of $50
million from El Paso based upon El Paso's alleged breach of the Merger
Agreement.
The United States Bankruptcy Court for the Western District of Texas,
Austin Division, consolidated the El Paso suit and the CSW suit into one
adversary proceeding. CSW was the named plaintiff in the consolidated adversary
proceeding. The trial was completed on January 30, 1997. On April 11, 1997, the
court issued an interim order in which it ruled that CSW owed El Paso the $25
million termination fee pursuant to the terms of the Merger Agreement. In
addition, the court stated that CSW may owe El Paso certain interest costs
alleged by El Paso to be approximately $18 million. CSW and El Paso dispute how
and under what circumstances the interest costs issue needs to be resolved. To
date, the court has made no determination with respect to this issue.
CSW is currently considering its legal options regarding the court's
interim order. However, based upon the court's interim order, CSW recorded a
charge of $25 million which is included in CSW's first quarter of 1997
consolidated results of operations. In addition, if the interest costs are
ultimately determined to be owed by CSW to El Paso, it could have a material
adverse effect on CSW's consolidated results of operations (The foregoing
statement constitutes a forward looking statement within the meaning of Section
21E of the Exchange Act. Actual results may differ materially from such
projected information due to changes in the underlying assumptions. See FORWARD
LOOKING INFORMATION).
CPL FUEL PROCEEDING
As previously reported, CPL filed with the Texas Commission an
Application for Authority to Implement an increase in fuel factors of $34.4
million, or 15.4% on an annual basis. In addition, CPL proposed to implement a
fuel surcharge of $23.4 million, including accumulated interest, over a twelve
month period. On February 10, 1997, CPL filed a Stipulation with the Texas
Commission which would surcharge customers the $23.4 million and would
coordinate the surcharge with any refund in CPL's current rate case as described
in NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965. In the Stipulation, CPL's fuel
factors were increased approximately $29.4 million, or 13.2%, on an annual
basis. The Texas Commission's interim approval of the stipulated fuel factors
permitted a March 1997 implementation of the fuel factors. The CPL Final Order,
issued March 31, 1997, confirmed the interim approval.
SWEPCO FUEL PROCEEDING
In April 1997, SWEPCO filed with the Texas Commission an application
concerning fuel cost under-recoveries and a possible fuel surcharge. The
application included a motion to either abate the interim surcharge and
consolidate the surcharge or alternatively, implement an interim surcharge in
the months of July 1997 through June 1998. In its filing, SWEPCO indicated it
had an under-recovered Texas jurisdictional fuel cost balance of approximately
$10.2 million, including interest, through January 1997. Furthermore, SWEPCO
believes its under-recovered position will continue in the future (The foregoing
statement constitutes a forward looking statement within the meaning of Section
21E of the Exchange Act. Actual results may differ materially from such
<PAGE> 41
projected information due to changes in the underlying assumptions. See FORWARD
LOOKING INFORMATION). SWEPCO is requesting postponement of any required interim
surcharge of fuel cost under-recoveries in order to have these under-recoveries
considered as part of a fuel reconciliation to be filed with the Texas
Commission in the second quarter of 1997.
WTU FUEL PROCEEDING
As previously reported, in February 1997, WTU filed with the Texas
Commission an Application for Authority to Implement an increase in fuel factors
of $4.2 million, or 4.2%, on an annual basis. Additionally, WTU proposed to
implement a fuel surcharge of $13.3 million, including accumulated interest,
over a twelve month period to collect its under-recovered fuel costs. WTU
requested authority to implement the revised fuel factors in conjunction with
the May 1997 billings and to commence the surcharge in conjunction with its June
1997 billings.
On April 14, 1997, an agreement in principle was reached with the
parties to settle this docket. Under the proposed settlement, WTU agreed not to
increase the fuel factors. Also, the $13.3 million surcharge will be implemented
over the period June 1997 through February 1999. A final order from the Texas
Commission approving this stipulated agreement is expected in the second quarter
of 1997.
PSO REGULATORY MATTERS
As previously reported, in July 1996, the Oklahoma Commission staff
filed an application seeking a review of PSO's earnings and rate structure. The
review was initiated to investigate the potential impact on PSO's rates of both
the sale of Transok by CSW, PSO's restructuring efforts and PSO's improved
financial results. Although rate reviews do not have specific time limitations,
a schedule has been established for PSO's response. In accordance with the
established schedule, PSO filed financial information with the Oklahoma
Commission staff on November 1, 1996, and cost of service and rate design
testimony on January 10, 1997. The Oklahoma Commission staff and intervenors are
scheduled to file their revenue requirements testimony on June 5, 1997. A
hearing on the merits of the review is scheduled to begin on July 31, 1997. On
January 14, 1997, the Oklahoma Commission approved a joint settlement which
provides that all bills rendered beginning with PSO's June 1997 billing cycle
shall be considered interim rates subject to refund in the event the permanent
final order grants less than the current revenue produced by the existing rates.
A final order of the Oklahoma Commission is expected in the fall of
1997. Although PSO's management cannot predict the ultimate outcome of PSO's
rate review, management believes that the ultimate resolution will not have a
material adverse effect on CSW or PSO's results of operations or financial
condition (The foregoing statement constitutes a forward looking statement
within the meaning of Section 21E of the Exchange Act. Actual results may differ
materially from such projected information due to changes in the underlying
assumptions. See FORWARD LOOKING INFORMATION). However, if PSO ultimately is
unsuccessful in reaffirming adequate rates, PSO and CSW each could experience a
material adverse effect on their results of operations and financial condition.
3. CONTINGENT LIABILITIES
CPL DEFERRED ACCOUNTING
By orders issued in 1989 and 1990, the Texas Commission authorized CPL
to defer certain STP Unit 1 and Unit 2 costs incurred between the commercial
operation dates of those units and the effective date of rates reflecting the
operation of those units. Upon appeal of the 1989 CPL order, and a related order
<PAGE> 42
involving another utility, the Texas Supreme Court in 1994 sustained deferred
accounting as an appropriate mechanism for the Texas Commission to use in
preserving the financial integrity of CPL, but remanded CPL's case to the Court
of Appeals to consider certain substantial evidence points of error not
previously decided by the Court of Appeals. On August 16, 1995, the Court of
Appeals rendered its opinion in the remand proceeding and affirmed the Texas
Commission's order in all respects.
By orders issued in October 1990 and December 1990, the Texas
Commission quantified the STP Unit 1 and Unit 2 deferred accounting costs and
authorized the inclusion of the amortization of the costs and associated return
in CPL's retail rates. These Texas Commission orders were appealed to the Travis
County District Court where the appeals are still pending. Language in the Texas
Supreme Court's opinion in the appeal of the deferred accounting authorization
case suggests that the appropriateness of including deferred accounting costs in
rates charged to customers is dependent on a finding in the first case in which
the deferred STP costs are to be recovered through rates that the deferral was
actually necessary to preserve the utility's financial integrity. If, in the
appeals of the October 1990 and December 1990 rate orders, the courts decide
that subsequent review under the financial integrity standard is required and
was not made in those orders, then such rate orders would be remanded to the
Texas Commission for the purpose of entering findings applying the financial
integrity standard. Pending the ultimate resolution of CPL's deferred accounting
issues, CPL is unable to predict how its deferred accounting orders will
ultimately be resolved by the Texas Commission.
If CPL's deferred accounting matters are not favorably resolved, CSW
and CPL could experience a material adverse effect on their respective results
of operations and financial condition. While CPL's management is unable to
predict the ultimate outcome of these matters, management believes either CPL
will receive approval of its deferred accounting amounts or CPL will be
successful in renegotiation of its rate orders, so that there will be no
material adverse effect on CSW's or CPL's results of operations or financial
condition (The foregoing statement constitutes a forward looking statement
within the meaning of Section 21E of the Exchange Act. Actual results may differ
materially from such projected information due to changes in the underlying
assumptions. See FORWARD LOOKING INFORMATION).
CPL NUCLEAR INSURANCE
In connection with the licensing and operation of STP, the owners have
purchased nuclear property and liability insurance coverage as required by law,
and have executed indemnification agreements with the NRC in accordance with the
financial protection requirements of the Price-Anderson Act.
The Price-Anderson Act, a comprehensive statutory arrangement providing
limitations on nuclear liability and governmental indemnities, is in effect
until August 1, 2002. The limit of liability under the Price-Anderson Act for
licensees of nuclear power plants is $8.92 billion per incident, effective as of
December 1996. The owners of STP are insured for their share of this liability
through a combination of private insurance amounting to $200 million and a
mandatory industry-wide program for self-insurance totaling $8.72 billion. The
maximum amount that each licensee may be assessed under the industry-wide
program of self-insurance following a nuclear incident at an insured facility is
$75.5 million per reactor, which may be adjusted for inflation, plus a five
percent charge for legal expenses, but not more than $10 million per reactor for
each nuclear incident in any one year. CPL and each of the other STP owners are
subject to such assessments, which CPL and the other owners have agreed will be
allocated on the basis of their respective ownership interests in STP. For
purposes of these assessments, STP has two licensed reactors.
<PAGE> 43
The owners of STP currently maintain on-site decontamination liability
and property damage insurance in the amount of $2.75 billion provided by ANI and
NEIL. Policies of insurance issued by ANI and NEIL stipulate that policy
proceeds must be used first to pay decontamination and cleanup costs before
being used to cover direct losses to property. Under project agreements, CPL and
the other owners of STP will share the total cost of decontamination liability
and property insurance for STP, including premiums and assessments, on a pro
rata basis, according to each owner's respective ownership interest in STP.
CPL purchased, for its own account, a NEIL I Business Interruption
and/or Extra Expense policy. This insurance will reimburse CPL for extra
expenses incurred for replacement generation or purchased power as a result of a
covered accident that shuts down production at one or both of the STP Units for
more than 21 consecutive weeks. In the event of an outage of STP Units 1 and 2
and the outage is the result of the same accident, such insurance will reimburse
CPL up to 80% of the single unit recovery. The maximum amount recoverable for a
single unit outage is $118.6 million for both Units 1 and 2. CPL is subject to
an additional assessment up to $1.9 million for the current policy year in the
event insured losses at a nuclear facility covered under the NEIL I policy
exceeds the accumulated funds available under the policy. CPL renewed its
current NEIL I Business Interruption and/or Extra Expense policy on September
15, 1996.
For further information relating to litigation associated with CPL
nuclear insurance claims, reference is made to PART II - ITEM 1.
SWEPCO BILOXI, MISSISSIPPI MANUFACTURED GAS PLANT SITE
As previously reported, SWEPCO was notified by Mississippi Power in
1994 that it may be a PRP at a MGP site in Biloxi, Mississippi, which was
formerly owned and operated by a predecessor of SWEPCO. Since then, SWEPCO has
worked with Mississippi Power on both the investigation of the extent of
contamination on the site as well as on the subsequent sampling of the site. The
sampling results indicated contamination at the property as well as the
possibility of contamination of an adjacent property. A risk assessment was
submitted to the MDEQ, whose ensuing comments requested that a future
residential exposure scenario be evaluated for comparison with commercial and
industrial exposure scenarios. However, Mississippi Power and SWEPCO do not
believe that cleanup to a residential scenario is appropriate since this site
has been industrial/commercial for more than 100 years, and Mississippi Power
plans to continue this type of usage. Mississippi Power and SWEPCO also
presented a report to the MDEQ demonstrating that the ground water on the site
was not potable, further demonstrating that cleanup to residential standards is
not necessary.
The MDEQ has not agreed to a non-residential future land use scenario
as of this date and has requested further testing. Following the additional
testing and resolution of whether cleanup is necessary to meet a residential
usage scenario or if cleanup to a commercial/industrial scenario is appropriate,
a feasibility study will be conducted to more definitively evaluate remedial
strategies for the property. This will require public input prior to a final
decision being made.
A final range of cleanup costs has not been determined, but based on
preliminary estimates, SWEPCO has incurred to date approximately $200,000 for
its portion of the cleanup of this site and anticipates that an additional $2
million may be required (The foregoing statement constitutes a forward looking
statement within the meaning of Section 21E of the Exchange Act. Actual results
may differ materially from such projected information due to changes in the
underlying assumptions. See FORWARD LOOKING INFORMATION).
Accordingly, SWEPCO has accrued $2 million for the cleanup of the site.
<PAGE> 44
SWEPCO VODA PETROLEUM SUPERFUND SITE
As previously reported, in April 1996, SWEPCO received correspondence
from the EPA providing notification that SWEPCO is a PRP to a cleanup action
planned for the Voda Petroleum Superfund Site located in Clarksville, Texas.
SWEPCO is conducting a records review to compile documentation relating to
SWEPCO's past use of the Voda Petroleum site. The proposed cleanup of the site
is estimated by the EPA to cost approximately $2 million and to take
approximately twelve months to complete (The foregoing statement constitutes a
forward looking statement within the meaning of Section 21E of the Exchange Act.
Actual results may differ materially from such projected information due to
changes in the underlying assumptions. See FORWARD LOOKING INFORMATION). The
potential for over 30 PRP's to conduct the cleanup in lieu of EPA conducting the
cleanup is under consideration. Any SWEPCO liability associated with this
project is not expected to have a material adverse effect on its results of
operations or its financial condition.
SWEPCO HENRY W. PIRKEY POWER PLANT
In connection with the South Hallsville lignite mining contract for its
Henry W. Pirkey Power Plant, SWEPCO has agreed, under certain conditions, to
assume the obligations of the mining contractor. As of March 31, 1997, the
maximum amount SWEPCO would have to assume was $62.1 million. The maximum amount
may vary as the mining contractor's need for funds fluctuates. The contractor's
actual obligation outstanding as of March 31, 1997 was $54.0 million.
SWEPCO SOUTH HALLSVILLE LIGNITE MINE
As part of the process to receive a renewal of a Texas Railroad
Commission permit for lignite mining at the South Hallsville lignite mine,
SWEPCO has agreed to provide guarantees of mine reclamation in the amount of $72
million. Since SWEPCO uses self-bonding, the guarantee provides for SWEPCO to
commit to use its resources to complete the reclamation in the event the work is
not completed by the third party miner. The current cost to reclaim the mine is
estimated to be approximately $36 million (The foregoing statement constitutes a
forward looking statement within the meaning of Section 21E of the Exchange Act.
Actual results may differ materially from such projected information due to
changes in the underlying assumptions. See FORWARD LOOKING INFORMATION).
4. COMMON STOCK AND DIVIDENDS
CSW's earnings per share of common stock are computed by dividing net
income for common stock by the average number of common shares outstanding for
the respective periods. CSW's dividends per common share reflect per share
amounts paid during the periods. See MD&A - LIQUIDITY AND CAPITAL RESOURCES
CAPITAL STRUCTURE for information related to recent changes in CSW's common
stock plans.
The U.S. Electric Operating Companies' mortgage indentures, as amended
and supplemented, contain certain restrictions on the use of their retained
earnings for cash dividends on their common stock. These restrictions do not
currently limit the ability of CSW to pay dividends to its shareholders. At
March 31, 1997, approximately $1.5 billion of the subsidiary companies' retained
earnings were available for payment of cash dividends by such subsidiaries to
CSW. The amounts attributable to the U.S. Electric Operating Companies were as
follows.
CPL - $745 million PSO - $154 million SWEPCO - $321 million
WTU - $121 million
<PAGE> 45
5. INCOME TAXES
The following tables provide a reconciliation of the differences
between total income tax expense (income taxes included in Operating Expenses
and Taxes as well as Other Income and Deductions) at the federal statutory tax
rate and the effective tax rate for the Registrants.
INCOME TAX RATE
RECONCILIATION CSW CPL PSO SWEPCO WTU
--------------------------------------------
(millions) (thousands)
--------------------------------
QUARTER ENDED MARCH 31, 1997
Income (loss)before taxes
attributable to:
Domestic operations $(7)
Foreign operations 45
---
Income (loss) before taxes $38 $(7,363) $10,322 $18,884 $2,156
Tax at U.S. statutory rate $13 $(2,577) $3,613 $6,609 $755
Differences
Amortization of ITC (4) (1,447) (696) (1,166) (330)
Mirror CWIP 1 1,089 -- -- --
Non-deductible goodwill
amortization 3 -- -- -- --
Prior period adjustments (2) (1,720) (261) (198) (124)
Other (2) 498 (172) 116 (5)
------------------------------------------
Tax Expense $9 $(4,157) $2,484 $5,361 $296
------------------------------------------
Effective Tax Rate 23% 56% 24% 28% 14%
QUARTER ENDED MARCH 31, 1996
Income before taxes attributable
to:
Domestic operations $54
Foreign operations 24
---
Income before taxes $78 $25,454 $7,157 $18,633 $1,727
Tax at U.S. statutory rate $27 $8,909 $2,505 $6,521 $605
Differences
Amortization of ITC (3) (1,447) (696) (1,182) (330)
Mirror CWIP 1 877 -- -- --
Other (2) 495 (200) (1,456) (302)
------------------------------------------
Tax Expense $23 $8,834 $1,609 $3,883 $(27)
------------------------------------------
Effective Tax Rate 29% 35% 22% 21% (2)%
6. CPL RATE REVIEW - DOCKET NO. 14965
OVERVIEW
As previously reported, in November 1995, CPL filed with the Texas
Commission a request to increase its retail base rates $71 million. In a
preliminary order issued December 21, 1995, the Texas Commission expanded the
scope of the rate review proceeding to address certain competitive issues facing
the electric utility industry including estimates of CPL's potential stranded
costs based upon various possible structures of the electric industry. In May
1996, CPL placed a $70 million base rate increase into effect under bond. The
bonded rates are subject to refund based on the final order of the Texas
Commission.
<PAGE> 46
CPL FINAL ORDER
On March 31, 1997, the Texas Commission issued the CPL Final Order in
CPL's Rate Review Docket No. 14965. The CPL Final Order lowers the annual base
rates of CPL by approximately $27 million, or approximately 3.5% in 1997, from
CPL's existing rate level prior to CPL's May 1996 implementation of bonded
rates. The Texas Commission also introduced a glide path rate reduction scheme
whereby CPL's rates will be reduced by an additional $16 million in 1998 and
another $16 million in 1999. The preliminary estimated financial impact of the
CPL Final Order is described below.
There are numerous contributing factors to the difference between the
$71 million retail base rate increase originally requested by CPL and the $27
million retail base rate reduction included in the CPL Final Order. The CPL
Final Order decreased CPL's requested return on equity of 12.25% on its retail
rate base to a 10.9% return on equity for all non-ECOM invested capital, which
results in an approximate $30 million decrease in CPL's rate request. The CPL
Final Order provides for the disallowance of approximately $21 million of
affiliate transactions. In addition, the CPL Final Order denied CPL's request to
use straight line amortization for CPL's deferred accounting costs. Instead, the
CPL Final Order requires CPL to continue to use the mortgage amortization method
to amortize its deferred accounting costs, resulting in a reduction of $14
million from CPL's rate request. The CPL Final Order also decreases other
depreciation and amortization by $21 million from CPL's rate request.
Another major provision of the CPL Final Order was the Texas
Commission's categorization of approximately $859 million or 32% of CPL's
investment in STP, including mirror CWIP and deferred accounting, as ECOM. The
term ECOM has been used to refer to the amount of costs that potentially would
become "stranded" if retail competition were mandated and prices were set in the
market, rather than the price being determined by current regulatory standards
of reasonable and necessary cost of providing service. The CPL Final Order
reduced CPL's return on the ECOM portion of CPL's investment in STP to 7.96%,
compared to the 10.9% return on common equity approved for all other invested
capital, resulting in a $17.6 million decrease in CPL's rate request. At the
same time, the CPL Final Order accelerated the recovery of the $859 million
designated as ECOM to 20 years from the remaining 32-year life of STP, resulting
in a $16.8 million increase in CPL's rate request. CPL has a 25.2% ownership
interest in STP.
RATE CASE EXPENSE PHASE
The CPL Final Order established a separate docket, Docket No. 17280, to
consider the recoverability of $19 million of rate case expenses incurred in the
current rate case and in two prior dockets. CPL reached a settlement with all
parties to resolve Docket No. 17280. The settlement results in CPL foregoing
recovery of approximately $5 million of expenses and limits the recovery of
estimated expenses to $600,000. Approximately $13 million of the rate case
expenses will be recovered as an offset to the refund in the rate case,
including approximately $5 million of unamortized expenses associated with CPL's
last rate case. The remaining $6 million of expenses will be surcharged to
customers over three years.
NORMALIZATION RULES
Based upon management's preliminary evaluation of the CPL Final Order,
management believes there is a possibility that certain consistency provisions
(otherwise referred to as normalization rules) of the Internal Revenue Code may
have been violated by the order. CPL has requested correction of these
normalization violations in its motion for rehearing which was filed on April
21, 1997. If the Internal Revenue Service determines that a normalization
violation has occurred and no changes to the CPL Final Order are made to remedy
the violation, the Internal Revenue Service could disallow certain significant
accelerated tax deductions and investment tax credits previously taken by CPL,
which would have a material adverse effect on the financial condition of CSW and
CPL.
<PAGE> 47
PRELIMINARY ESTIMATED FINANCIAL IMPACT OF CPL FINAL ORDER
If ultimately upheld after rehearing and any appeals, management
expects the CPL Final Order to have a material adverse impact on CSW's and CPL's
results of operations for the next several years as compared to what they
otherwise would have been, beginning with an estimated reduction of 1997
earnings by approximately $54.4 million and reductions in succeeding years due
to the effects of applying the glide path methodology in 1998 and 1999. The
estimated reduction in 1997 earnings includes the annual impact of the CPL Final
Order for 1997, the recognition of the retroactive impact of the CPL Final Order
on 1996 results of operations from when bonded rates were implemented in May
1996, subject to refund, as well as the effects of the settlement in Docket No.
17280 described in RATE CASE EXPENSE PHASE.
Effective December 1996, CPL began recording their results in
accordance with the proposal for decision that was issued in January 1997 by the
administrative law judges hearing CPL's rate case. In addition, CPL recorded a
contingent liability of $41 million for the estimated effect of the CPL Final
Order through the first quarter of 1997. The preliminary estimate of the
financial impact of the CPL Final Order on CSW and CPL as it differs from the
proposal for decision is presented in the table below. The table reflects the
most recent analysis of the CPL Final Order as well as the impact of the
settlement in Docket No. 17280. This table is an update of the preliminary
estimate reported in CSW and CPL's Form 8-K dated March 31, 1997 and filed April
10, 1997.
1997 1998 1999
--------------------------------
(millions)
Decrease in revenue $(27.1) $(38.0) $(54.4)
Items included in decrease in revenue with an
offsetting effect on expense
Accelerated recovery of STP (ECOM) (42.9) (42.9) (42.9)
Change in depreciation/amortization 26.1 26.1 26.1
Other (1.1) (1.1) (1.1)
--------------------------------
(17.9) (17.9) (17.9)
Expenses not included in decrease in revenue (3.9) 4.3 4.3
--------------------------------
Change in current year income before tax (48.9) (51.6) (68.0)
Federal income taxes 14.8 15.7 21.4
--------------------------------
Current year impact on net income (34.1) (35.9) (46.6)
1996 effect (20.3) -- --
--------------------------------
Total current year impact on net income $(54.4) $ (35.9) $(46.6)
--------------------------------
The specific timing and amount of recognition of the effects of the CPL
Final Order for all of 1997 is uncertain. A preliminary reconciliation of
revenues between CPL's original filing and the CPL Final Order was included in
CSW and CPL's Form 8-K dated March 31, 1997 and filed April 3, 1997. Due to the
uncertainty of the outcome of any rehearing, any appeals process or the effects
of any potential legislation, CSW and CPL are unable to predict how the final
resolution of the issues raised in the CPL Final Order will ultimately impact
CSW's and CPL's results of operations and financial condition. In the event the
CPL Final Order is ultimately upheld after rehearing and any appeals, CSW and
CPL would continue to experience a material adverse effect on their results of
operations as compared to what they otherwise would have been. At the same time,
in the event legislation restructuring the electric utility industry in Texas is
enacted as currently proposed, the CPL Final Order could be nullified. For
additional information related to this matter, see MD&A - RECENT DEVELOPMENTS
INDUSTRY RESTRUCTURING IN TEXAS (The foregoing statements constitute forward
looking statements within the meaning of Section 21E of the Exchange Act. Actual
<PAGE> 48
results may differ materially from such projected information due to changes in
the underlying assumptions. See FORWARD LOOKING INFORMATION).
IMPLEMENTATION OF NEW RATES
As previously stated, CPL implemented bonded rates subject to refund in
May 1996. Based upon the CPL Final Order, which is still subject to change
resulting from CPL's and any other party's motions for rehearing, CPL's refund
obligation through March 1997, including interest, is approximately $95 million.
The ultimate amount subject to refund will depend upon the final rates ordered
by the Texas Commission after any rehearing. Any such refunds will be
coordinated with any fuel surcharge as described in NOTE 2. LITIGATION AND
REGULATORY PROCEEDINGS and will be applied to customers' bills over one or more
months as ordered by the Texas Commission.
PROCEDURAL SCHEDULE
CPL filed a motion for rehearing on April 21, 1997. The motion for
rehearing requests reconsideration by the Texas Commission of numerous issues in
the rate case including the following issues.
(i) The calculation of a portion of STP as ECOM and the decision to allow
only a 7.96% return on equity on the ECOM amount.
(ii) The disallowance of $21 million of affiliate transactions.
(iii) The Texas Commission glide path rate reductions in 1998 and 1999.
(iv) The amount of nuclear decommissioning expense included in cost of
service.
CPL requested that the Texas Commission revise the CPL Final Order on
other issues including tax normalization, post-test year adjustments, deferred
accounting, depreciation, and others. In addition, motions for rehearing were
filed by eight other parties including the General Counsel of the Texas
Commission, certain cities in CPL's service territory that filed as intervenors
in CPL's rate case and the Office of Public Utility Counsel. On May 7, 1997, the
Texas Commission extended the procedural schedule to June 30, 1997 to consider
the motions for rehearing. Management expects that the Texas Commission will
grant motions for rehearing on some issues in order to make technical
corrections to the CPL Final Order; however, management believes that the Texas
Commission is unlikely to revise its order on rehearing in a manner which would
substantially mitigate the adverse financial impact of the CPL Final Order on
CSW and CPL. After the rehearing process has concluded, CPL will likely appeal
the CPL Final Order to the Texas State District Court. Unless revisions in the
level of rates are made on rehearing, CPL expects to place the new rates into
effect in mid-year 1997. Under this schedule, CPL would likely begin making
refunds of bonded rates in the fall of 1997. CSW and CPL are continuing to
analyze the ultimate financial impact of the CPL Final Order (The foregoing
statement constitutes a forward looking statement within the meaning of Section
21E of the Exchange Act. Actual results may differ materially from such
projected information due to changes in the underlying assumptions. See FORWARD
LOOKING INFORMATION).
ACCOUNTING POLICIES
CPL currently accounts for the economic effects of regulation in
accordance with SFAS No. 71. Pursuant to the provisions of SFAS No. 71, CPL had
recorded approximately $1.2 billion of regulatory related assets at December 31,
1996.
The application of SFAS No. 71 is conditioned upon CPL's rates being
set based on the cost of providing service. In the event management concludes
that as a result of changes in regulation, legislation, the competitive
environment, or other factors, including the CPL Final Order, CPL no longer
<PAGE> 49
meets the criteria for following SFAS No. 71, a write-off of regulatory assets
would be required. In addition, CPL would be required to determine any
impairment to carrying costs of plant investments.
If CPL no longer met the criteria for following SFAS No. 71 and a
write-off of regulatory assets was required, CPL and CSW could experience,
depending on the timing and amount of any write-off, a material adverse effect
on their results of operations and financial condition.
7. DISCONTINUED OPERATIONS
On June 6, 1996, CSW sold Transok, an intrastate natural gas pipeline
and gas marketing company that was previously a wholly owned subsidiary of CSW,
to Tejas Gas Corporation. Accordingly, the results of operations for Transok
have been reported as discontinued operations and no assets or liabilities
related to Transok are contained in CSW's Consolidated Balance Sheet. Since
Transok was sold in June 1996, CSW's results of operations for the quarter ended
March 31, 1997 do not reflect any earnings from Transok. Operating results of
Transok that are included in CSW's Statement of Income for the three month
period ended March 31, 1996 are summarized in the following table (in millions,
transactions with CSW affiliates have not been eliminated).
Total revenue $255
Operating income before income taxes $15
Earnings before income taxes $12
Income taxes 4
----
Net income from discontinued operations $8
----
<PAGE> 50
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Registrants' Combined Annual
Report on Form 10-K for the year ended December 31, 1996. Reference is also made
to each Registrant's unaudited Financial Statements and related Notes to
Financial Statements included herein. The information included therein should be
read in conjunction with, and is essential in understanding, the following
discussion and analysis.
RESULTS OF OPERATIONS
Reference is made to ITEM 1. FINANCIAL STATEMENTS for each of the
Registrants' RESULTS OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW OF CSW OPERATING, INVESTING AND FINANCING ACTIVITIES
Net cash flows from operating activities decreased $32 million to an
outflow of $32 million during the first quarter of 1997 compared to 1996. The
decrease is due primarily to federal and state income tax payments totaling
approximately $190 million that were made for the gain on CSW's 1996 sale of
Transok. These payments were, however, offset in part by the utilization of
Alternative Minimum Tax credits that CSW had previously generated. Net cash
flows from operations were also lower in 1997 because of a higher Advance
Corporation Tax payment SEEBOARD incurred in 1997 as well as the loss of
Transok's operations in the comparable period in 1996. Substantially all of the
Advance Corporation Tax paid by SEEBOARD in the first quarter of 1997 has
subsequently been recovered in the second quarter. These factors were partially
offset by changes in working capital accounts.
Net cash outflows from investing activities decreased substantially
during the first quarter of 1997 compared to 1996. There were no acquisition
expenditures during the first quarter of 1997 while SEEBOARD acquisition
expenditures were made during the first quarter of 1996. In addition, during the
first quarter of 1996, the National Grid shares were sold in conjunction with
SEEBOARD acquisition activities. CSW Energy obtained permanent external
financing during the first quarter of 1997 for the Orange Cogeneration project
and subsequently reduced its equity investment in the project. See LONG-TERM
FINANCING for additional information related to this matter. CSW Energy made its
final purchase agreement payment on the Ft. Lupton cogeneration project and also
incurred construction expenditures on the Sweeny project which were not present
in the comparable period in 1996.
Net cash inflows from financing activities decreased substantially
during the first quarter of 1997 compared to 1996. During 1996, CSW incurred
substantial amounts of debt to finance the acquisition of SEEBOARD. In addition,
during 1996, CSW sold approximately 15.5 million shares and received net
proceeds of approximately $398 million in a primary public offering which were
subsequently used to repay a portion of the debt incurred in conjunction with
the SEEBOARD acquisition. Short-term borrowings increased during 1997 compared
to 1996 due primarily to borrowings incurred for the income tax payments on the
Transok gain. See CAPITAL STRUCTURE for information related to recent changes in
CSW's common stock plans and their impact on cash flows from financing
activities.
<PAGE> 51
CONSTRUCTION EXPENDITURES
CSW's construction expenditures totaled $97 million for the three
months ended March 31, 1997. Such expenditures for the U.S. Electric Operating
Companies totaled $27 million, $19 million, $10 million and $5 million, for CPL,
PSO, SWEPCO and WTU, respectively. CSW's construction expenditures, including
those for SEEBOARD, were primarily for improvements to existing production,
transmission and distribution facilities. The improvements are required to meet
the needs of new customers and to satisfy the changing requirements of existing
customers. CSW anticipates that all funds required for construction for the
remainder of the year will be provided from internal sources (The foregoing
statement constitutes a forward looking statement within the meaning of Section
21E of the Exchange Act. Actual results may differ materially from such
projected information due to changes in the underlying assumptions. See FORWARD
LOOKING INFORMATION).
CAPITAL STRUCTURE
The CSW System is committed to maintaining financial flexibility by
having a strong capital structure and favorable securities ratings which help to
assure future access to capital markets when required. At March 31, 1997, prior
to the issuance of the trust preferred securities at CPL, PSO and SWEPCO, the
capitalization ratios of each of the Registrants is presented in the following
table.
Common Long
Stock Preferred Term
Equity Stock Debt
--------------------------------
CSW 46% 4% 50%
CPL 47% 9% 44%
PSO 53% 2% 45%
SWEPCO 52% 4% 44%
WTU 48% 1% 51%
CSW can issue CSW Common Stock, either through open market purchases or
original issue shares, through a long-term incentive plan, the PowerShare
Dividend Reinvestment and Stock Purchase Plan and the ThriftPlus plan. Following
the issuance of the CPL Final Order and the decline in the market price of CSW
Common Stock, which CSW management believes is attributable in part to the CPL
Final Order, management determined that it was appropriate for CSW to begin
funding these plans through open market purchases, effective April 1, 1997.
LONG-TERM FINANCING
On April 24, 1997, PSO's business trust, PSO Capital I, sold to
underwriters in a negotiated offering $75 million, 8.00% Series A, Trust
Originated Preferred Securities due April 2037. The proceeds from the sale of
these securities were used by PSO to repay short-term debt, to reimburse PSO's
treasury for the cost of reacquiring approximately $14.5 million of 4.00% Series
and 4.24% Series preferred stock, to provide working capital and for other
general corporate purposes. Settlement of the transaction occurred on May 2,
1997. PSO Capital I will be treated as a subsidiary of PSO whose only assets are
the approximately $73.3 million principal subordinated debentures issued by PSO.
In addition to PSO's obligation under the subordinated debentures, PSO has also
agreed to a security obligation which represents a full and unconditional
guarantee of PSO Capital I's trust obligations.
On April 30, 1997, SWEPCO's business trust, SWEPCO Capital I, sold to
underwriters in a negotiated offering $110 million, 7.875% Series A, Trust
Preferred Securities due April 2037. The proceeds from the sale of these
securities were used by SWEPCO to repay short-term debt, to reimburse SWEPCO's
treasury for the cost of reacquiring approximately $15.5 million of 4.28%
Series, 4.65% Series, 5.00% Series and 6.95% Series preferred stock, to provide
working capital and for other general corporate purposes. Settlement of the
<PAGE> 52
transaction occurred on May 8, 1997. SWEPCO Capital I will be treated as a
subsidiary of SWEPCO whose only assets are the approximately $113.4 million
principal subordinated debentures issued by SWEPCO. In addition to SWEPCO's
obligation under the subordinated debentures, SWEPCO has also agreed to a
security obligation which represents a full and unconditional guarantee of
SWEPCO Capital I's trust obligations.
On May 8, 1997, CPL's business trust, CPL Capital I, sold to
underwriters in a negotiated offering $150 million, 8.00% Series A, Quarterly
Income Preferred Securities due April 2037. The proceeds from the sale of these
securities were used by CPL to repay short-term debt, to reimburse CPL's
treasury for the cost of reacquiring approximately $87.5 million of 4.00%
Series, 4.20% Series, 7.12% Series and 8.72% Series preferred stock, to provide
working capital and for other general corporate purposes. Settlement of the
transaction occurred on May 14, 1997. CPL Capital I will be treated as a
subsidiary of CPL whose only assets are the approximately $154.6 million
principal subordinated debentures issued by CPL. In addition to CPL's obligation
under the subordinated debentures, CPL has also agreed to a security obligation
which represents a full and unconditional guarantee of CPL Capital I's trust
obligations.
On March 27, 1997, an affiliate of Orange Cogeneration Limited
Partnership, an entity that is indirectly 50% owned by CSW Energy and accounted
for by the equity method of accounting, issued $110 million, 8.175% Senior
Secured Bonds, due 2022. The bonds are unconditionally guaranteed by Orange
Cogeneration Limited Partnership. Concurrently, $53.2 million was distributed to
CSW Energy representing its equity investment in the Orange Cogeneration
project.
SHORT-TERM FINANCING
The CSW System uses short-term debt to meet fluctuations in working
capital requirements and other interim capital needs. CSW has established a
system money pool to coordinate short-term borrowings for certain of its
subsidiaries, primarily the U.S. Electric Operating Companies. In addition, CSW
also incurs borrowings for other subsidiaries that are not included in the money
pool. As of March 31, 1997, CSW had revolving credit facilities totaling $1.2
billion to back up its commercial paper program.
CREDIT RATINGS OF SECURITIES
The current securities ratings for each of the Registrants is presented
in the following table, including the securities rating on the trust preferred
securities issued by CPL Capital I, PSO Capital I and SWEPCO Capital I.
<PAGE> 53
Duff & Standard
Moody's Phelps & Poor's
------------------------------
CPL
First mortgage bonds A3 A A
Senior unsecured Baa1 A- A-
Preferred stock baa1 BBB+ A-
Trust preferred (CPL Capital I) baa1 BBB+ A-
Junior subordinated deferrable
interest debentures Baa2
PSO
First mortgage bonds Aa3 AA A+
Senior unsecured A1 AA- A
Preferred stock a1 AA- A
Trust preferred (PSO Capital I) aa3 AA- A
Junior subordinated deferrable
interest debentures A2
SWEPCO
First mortgage bonds Aa3 AA+ A+
Senior unsecured A1 AA A
Preferred stock a1 AA A
Trust preferred (SWEPCO Capital I) aa3 AA A
Junior subordinated deferrable
interest debentures A2
WTU
First mortgage bonds A2 AA- A
Senior unsecured A3 - A-
Preferred stock a3 A+ A-
CSW
Commercial paper P-2 D-1 A-2
These securities ratings may be revised or withdrawn at any time, and
each rating should be evaluated independently of any other rating.
RECENT DEVELOPMENTS
FERC ORDER NO. 888
As previously reported, the FERC issued Order No. 888 which is the
final comparable open access transmission service rule. The provisions of FERC
Order No. 888 provide for comparable transmission service between utilities and
their transmission customers by requiring utilities to take transmission service
under their open access tariffs for all of their new wholesale sales and
purchases and by requiring utilities to rely on the same information that their
transmission customers rely on to make wholesale purchases and sales. FERC Order
No. 888 reaffirms the FERC's position that utilities are entitled to recover all
legitimate, prudent and verifiable stranded costs determined by a formula based
upon the revenues lost method through direct assignments charges to departing
customers. On November 1, 1996, the U.S. Electric Operating Companies filed a
system-wide tariff to comply with FERC Order No. 888. On December 31, 1996, the
FERC accepted for filing the system-wide tariff to become effective on January
1, 1997, subject to refund and to the issuance of further orders. CSW and the
U.S. Electric Operating Companies believe that their system-wide tariff complies
with the requirements of the FERC and the Texas Commission rules regarding
transmission access and pricing, but the tariff does not offer a single system
<PAGE> 54
rate for transactions due to the different transmission pricing approaches of
the FERC and the Texas Commission.
On March 4, 1997, the FERC issued Order No. 888-A on rehearing of Order
No. 888. In its Order No. 888-A, the FERC addressed, and largely rejected,
requests by interested parties to modify Order No. 888. In Order No. 888-A, the
FERC made only minor revisions to its original Order.
INDUSTRY RESTRUCTURING IN TEXAS
In May 1997, Texas Governor George W. Bush announced his administration
would pursue a plan to be introduced in the current session of the Texas
Legislature to restructure the electric utility industry in Texas and provide a
transition to retail competition in 2001. If enacted, the plan would provide
mechanisms for electing utilities to fully recover their stranded costs. Such
electing utilities would agree to a series of rate discounts beginning in
September 1997, which are based on approved rates in effect in January 1997, and
other provisions. CSW is unable to predict whether any retail competition
legislation will be enacted by the Texas Legislature, and if enacted, the
ultimate form such legislation would take or its ultimate impact on the CSW
System and its results of operations and financial condition.
INDUSTRY RESTRUCTURING IN OKLAHOMA
In April 1997, the Oklahoma Legislature enacted legislation dealing
with industry restructuring in Oklahoma, which provides for retail competition
by July 1, 2002. The legislation directs the Oklahoma Commission to study all
relevant issues relating to restructuring and develop a framework for a
restructured industry. The legislation divides the study of restructuring issues
by the Oklahoma Commission into four parts: (i) independent system operator
issues; (ii) technical issues; (iii) financial issues; and (iv) consumer issues.
At the end of each of these studies, the Oklahoma Commission must provide
reports along with legislative recommendations. The legislation directs the
Oklahoma Tax Commission to study the impact of electric utility restructuring on
state tax revenues and the existing tax structure, consider the establishment of
a uniform consumption tax, and report to the Oklahoma Legislature by December
31, 1998. The legislation prohibits the establishment of retail competition
until a uniform tax policy is established. The legislation also creates a Joint
Electric Utility Task Force, a 14-member panel composed of an equal number of
representatives from the Oklahoma House of Representatives and the Oklahoma
Senate. The duties of this task force include the oversight and direction of the
studies by the Oklahoma Commission and the Oklahoma Tax Commission. CSW is
unable to predict the outcome of this study or its ultimate impact on the CSW
System and its results of operations and financial condition.
INDUSTRY RESTRUCTURING IN LOUISIANA
Bills addressing the restructuring of the electric utility industry in
Louisiana, including the establishment of retail competition, have been filed in
the current session of the Louisiana Legislature. CSW is unable to predict
whether any retail competition legislation will be enacted by the Louisiana
Legislature and, if enacted, what form such legislation would take or its
ultimate impact on the CSW System and its results of operations and financial
condition.
INDUSTRY RESTRUCTURING IN ARKANSAS
In March 1997, the Arkansas Legislature passed a resolution directing
interim legislative committees to study competition in the electric power
industry in Arkansas. The study will begin on December 1, 1997, or when the
Arkansas Commission issues a final order in a currently pending rate proceeding
filed by Entergy Arkansas, Inc., whichever occurs first. CSW cannot predict the
outcome of this study or its ultimate impact on the CSW System and its results
of operations and financial condition.
<PAGE> 55
UNITED KINGDOM WINDFALL PROFITS TAX
As previously reported, the Labour Party had announced that, if elected
at the general election in the United Kingdom, it would introduce a windfall tax
on many industries, including the privatized utilities. On May 1, 1997, the
general election was held and the Labour Party won with a considerable majority.
The aggregate amount of a windfall tax and the allocation of that amount to
individual companies has not yet been decided. However, if a substantial
windfall tax is imposed on SEEBOARD and charged against earnings, it could have
a material adverse effect on CSW's results of operations.
RATES AND REGULATORY MATTERS
CPL REGULATORY MATTERS
Reference is made to NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965.
PSO REGULATORY MATTERS
Reference is made to NOTE 2. LITIGATION AND REGULATORY PROCEEDINGS.
OTHER
Reference is made to NOTE 2. LITIGATION AND REGULATORY PROCEEDINGS for
information regarding fuel proceedings at CPL, SWEPCO and WTU.
MERGER AND ACQUISITION ACTIVITIES
SWEPCO CAJUN ASSET PURCHASE PROPOSAL
As previously reported, Cajun filed a petition for reorganization under
Chapter 11 of the United States Bankruptcy Code on December 21, 1994 and is
currently operating under the supervision of the United States Bankruptcy Court
for the Middle District of Louisiana. In October 1996, SWEPCO, together with
Entergy Gulf States and the Committee of Certain Members, which currently
consists of seven of the twelve distribution cooperatives served by Cajun, filed
the SWEPCO Plan in the bankruptcy court. In April 1997, the Committee of Certain
Members as well as another cooperative signed term sheets that support the
SWEPCO Plan. In signing the term sheets, the Committee of Certain Members agreed
to support the SWEPCO Plan exclusively throughout the confirmation process, and
if the SWEPCO Plan is confirmed, to sign power supply agreements that meet the
conditions of the term sheets.
Under the SWEPCO Plan, which amended other plans filed earlier in 1996,
a SWEPCO subsidiary or affiliate would acquire all of the non-nuclear assets of
Cajun for approximately $780 million in cash and up to an additional $20 million
to pay certain other bankruptcy claims and expenses. SWEPCO would acquire claims
of unsecured creditors up to $7 million. In addition, the SWEPCO Plan provides
for the Cajun member cooperatives to enter into new 25-year power supply
agreements which will provide the Cajun member cooperatives with two wholesale
rate options while permitting the Cajun member cooperatives the flexibility to
acquire power on the open market when their requirements exceed mutually agreed
upon levels of generating capacity. The cooperatives could also elect, once
every five years, to move from one rate option to the other. The SWEPCO Plan
would settle power supply contract claims and related litigation in the
bankruptcy case. The term sheets signed by the eight cooperatives contain the
major provisions of the SWEPCO Plan.
Two competing plans of reorganization for Cajun have also been filed
with the bankruptcy court, each with different rate paths, asset purchase
proposals and other provisions. One of the competing plans has the support of
<PAGE> 56
both the bankruptcy court-appointed trustee and Cajun's largest creditor, the
Rural Utilities Service of the federal government. It also has the support of
the four cooperatives not currently supporting the SWEPCO plan, although the
support is based upon signed memoranda of understanding which allow the
cooperatives to support other competing parties.
Confirmation hearings in Cajun's bankruptcy case were postponed because
a bankruptcy court ruling in January 1997 disqualified the law firm representing
the Committee of Certain Members due to an irreconcilable conflict between the
firm's representation of both the Committee of Certain Members and Southwest
Louisiana Electric Membership Corporation. The bankruptcy court postponed the
confirmation hearings to allow the Committee of Certain Members time to obtain
new counsel. At a February 1997 status conference, the bankruptcy court extended
the resumption of full confirmation hearings until April 21, 1997. Such hearings
have now resumed.
Consummation of the SWEPCO Plan is conditioned upon confirmation by the
bankruptcy court, the receipt by SWEPCO and CSW of all requisite state and
federal regulatory approvals and receipt of their corresponding board approvals.
If the SWEPCO Plan is confirmed, CSW and SWEPCO expect initially to finance the
$807 million required to consummate the acquisition of Cajun's non-nuclear
assets through a combination of external borrowings and internally generated
funds (The foregoing statement constitutes a forward looking statement within
the meaning of Section 21E of the Exchange Act. See FORWARD LOOKING
INFORMATION).
TERMINATION OF EL PASO MERGER
Reference is made to NOTE 2. LITIGATION AND REGULATORY PROCEEDINGS.
NEW ACCOUNTING STANDARDS
SFAS NO. 125
SFAS No. 125 provides accounting and reporting standards for transfers
and servicing of financial assets and extinguishment of liabilities using a
financial-components approach that focuses on control. An entity recognizes
assets it controls and derecognizes assets when control has been surrendered and
liabilities when they have been extinguished. A transfer of assets in which
control of the asset is surrendered is recorded as a sale. Control of an asset
is surrendered only when and if certain distinct conditions are met. Likewise, a
liability is only extinguished under certain distinct conditions. The
Registrants adopted SFAS No. 125 effective January 1, 1997. Adoption of this
standard did not have a material adverse effect on the Registrants' results of
operations or financial condition.
<PAGE> 57
PART II - OTHER INFORMATION
For background and earlier developments relating to PART II
information, reference is made to the Registrants' Combined Annual Report on
Form 10-K for the year ended December 31, 1996.
ITEM 1. LEGAL PROCEEDINGS.
CPL NUCLEAR INSURANCE CLAIMS
In 1994, CPL filed a claim under its NEIL I policy relating to the
1993-1994 outage at STP Units 1 and 2. NEIL formally denied CPL's claim in 1995.
In April 1996, CPL filed an action in state district court in Corpus Christi,
Texas, against NEIL and Johnson & Higgins of Texas, Inc., the former insurance
broker for STP, seeking recovery under the policy and other relief. NEIL
responded by filing a suit against CPL in the United States District Court for
the Southern District of New York seeking a declaratory judgment to enforce an
arbitration provision contained in the policy. In May 1996, the New York court
ordered the dispute, including the issue of whether the arbitration provision is
enforceable, to arbitration and stayed the Texas proceeding. NEIL also canceled
CPL's current NEIL I policy effective July 31, 1996. NEIL also filed a claim in
arbitration seeking a determination that NEIL properly terminated CPL's coverage
and that CPL has caused NEIL damages by opposing NEIL's attempt to compel
arbitration and seeking recovery of NEIL's attorneys' fees. In June 1996, CPL
filed a notice of appeal of the New York court's order in the United States
Court of Appeals for the Second Circuit. Subsequently, CPL and NEIL agreed to
dismiss all litigation between them concerning CPL's claim for NEIL coverage.
CPL and NEIL also agreed to submit their disputes over coverage to a
non-binding, neutral evaluation process, although both CPL and NEIL have
reserved the right to take their dispute to binding arbitration. CPL and NEIL
also agreed that CPL's NEIL I policy would be reinstated. Evidentiary hearings
were held by the neutral evaluator in February 1997. A final oral argument was
held before the neutral evaluator on April 4, 1997. On April 22, 1997, the
neutral evaluator made the recommendation that CPL's claim was not covered by
its NEIL I policy. CPL will abide by the neutral evaluator's recommendation.
OTHER LEGAL CLAIMS AND PROCEEDINGS
The CSW System is party to various other legal claims and proceedings
arising in the normal course of business. Management does not expect disposition
of these matters to have a material adverse effect on the Registrants' results
of operations or financial condition. See PART I - NOTE 2. LITIGATION AND
REGULATORY PROCEEDINGS, PART 1 - NOTE 3. COMMITMENTS AND CONTINGENT LIABILITIES
and PART I - NOTE 6. CPL RATE REVIEW - DOCKET NO. 14965.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
CSW
(i) The annual meeting of stockholders of CSW was held on April 17, 1997.
(ii) The CSW stockholders elected five directors at the annual meeting. The name
of each nominee and the number of shares voted for or against were as follows:
<PAGE> 58
NOMINEE For Against
-------------------------
Molly Shi Boren 181,519,640 3,994,785
Donald M. Carlton 181,748,183 3,766,242
T.J. Ellis 181,766,850 3,747,575
Thomas V. Shockley, III 181,559,901 3,954,524
Glenn Files 181,428,854 4,085,571
Stockholders also voted to reapprove CSW's 1992 Long-Term Incentive Plan, as
amended to date, with 165,818,842 votes cast for approval, 16,755,925 votes cast
against approval and 2,939,658 votes abstaining.
In addition, stockholders voted to approve the appointment of Arthur Andersen
LLP, independent public accountants, as CSW's auditors for 1997, with
183,129,232 votes cast for approval, 1,381,573 votes cast against approval and
1,003,620 votes abstaining.
In total, 185,514,425 or approximately 87% of CSW's outstanding shares were
voted at the annual meeting.
(iii) No other matters (other than procedural matters) were voted upon at the
annual meeting.
CPL
(i) The annual meeting of stockholders of CPL was held on April 10, 1997.
(ii) Directors elected at the annual meeting were:
John F. Brimberry Pete Morales, Jr.
E. R. Brooks S. Loyd Neal, Jr.
M. Bruce Evans H. Lee Richards
Glenn Files J. Gonzalo Sandoval
Ruben M. Garcia Gerald E. Vaughn
Robert A. McAllen
(iii) No other matters (other than procedural matters) were voted upon at the
annual meeting.
(iv) A special meeting of common and preferred stockholders was held on April 7,
1997 to vote on an amendment to CPL's Restated Articles of Incorporation which
would remove a provision that limited CPL's ability to issue unsecured debt. The
amendment was passed, which required an affirmative vote from at least
two-thirds of the holders of each class of voting security. The results of the
vote were as follows:
Shares not
VOTING SECURITY For Against Abstain Voted
----------- ----------- ----------- ----------
Common Stock
Shares 6,755,535 -- -- --
% in Favor 100%
Preferred Stock
Shares 1,343,493 172 348 430,987
% in Favor 76%
<PAGE> 59
PSO
(i) The annual meeting of stockholders of PSO was held on April 15, 1997.
(ii) Directors elected at the annual meeting were:
E. R. Brooks Paul K. Lackey, Jr.
T.D. Churchwell Paula Marshall-Chapman
Harry A. Clarke William R. McKamey
Glenn Files Dr. Robert B. Taylor, Jr.
(iii) No other matters (other than procedural matters) were voted upon at the
annual meeting.
(iv) A special meeting of common and preferred stockholders was held on April
16, 1997 to vote on an amendment to PSO's Restated Certificate of Incorporation
which would remove a provision that limited PSO's ability to issue unsecured
debt. The amendment was passed, which required an affirmative vote from at least
two-thirds of the holders of each class of voting security. The results of the
vote were as follows:
Shares not
VOTING SECURITY For Against Abstain Voted
----------- ----------- ----------- ----------
Common Stock
Shares 9,013,000 -- -- --
% in Favor 100%
Preferred Stock
Shares 162,173 362 300 35,065
% in Favor 82%
SWEPCO
(i) The annual meeting of stockholders of SWEPCO was held on April 9, 1997.
(ii) Directors elected at the annual meeting were:
E. R. Brooks Karen C. Martin
James E. Davison William C. Peatross
Glenn Files Maxine P. Sarpy
Dr. Frederick E. Joyce Michael D. Smith
John M. Lewis
(iii) No other matters (other than procedural matters) were voted upon at the
annual meeting.
(iv) A special meeting of common and preferred stockholders was held on April
16, 1997 to vote on an amendment to SWEPCO's Restated Certificate of
Incorporation which would remove a provision that limited SWEPCO's ability to
issue unsecured debt. The amendment was passed, which required an affirmative
vote from at least two-thirds of the holders of each class of voting security.
The results of the vote were as follows:
<PAGE> 60
Shares not
VOTING SECURITY For Against Abstain Voted
----------- ----------- ----------- ----------
Common Stock
Shares 7,536,640 -- -- --
% in Favor 100%
Preferred Stock
Shares 454,374 56 -- 45,570
% in Favor 91%
WTU
(i) The annual meeting of stockholders of WTU was held on April 22, 1997.
(ii) Directors elected at the annual meeting were:
Richard F. Bacon Floyd W. Nickerson
E. R. Brooks Dian G. Owen
Paul J. Brower James M. Parker
Glenn Files Ted Steans
Tommy Morris F. L. Stephens
(iii) No other matters (other than procedural matters) were voted upon at the
annual meeting.
(iv) A special meeting of common and preferred stockholders was held on April
16, 1997 to vote on an amendment to WTU's Restated Articles of Incorporation
which would remove a provision that limited WTU's ability to issue unsecured
debt. That meeting was adjourned by a vote of the shareholders and subsequently
reconvened on April 28, 1997. The amendment was passed, which required an
affirmative vote from at least two-thirds of the holders of each class of voting
security. The results of the vote were as follows:
Shares not
VOTING SECURITY For Against Abstain Voted
----------- ----------- ----------- ----------
Common Stock
Shares 5,488,560 -- -- --
% in Favor 100%
Preferred Stock
Shares 43,585 743 5 15,667
% in Favor 73%
<PAGE> 61
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS:
(3) ARTICLES OF INCORPORATION AND BY-LAWS.
CPL
1 Restated Articles of Incorporation Without Amendment, Articles
of Correction to Restated Articles of Incorporation Without
Amendment, Articles of Amendment to Restated Articles of
Incorporation, Statements of Registered Office and/or Agent
(3), and Articles of Amendment to the Articles of
Incorporation, all filed herewith.
PSO
2 Restated Certificate of Incorporation of PSO (incorporated
herein by reference to Exhibit B-3.1 of CSW's 1996 Form U5S,
File No. 1-1443).
3 Bylaws of PSO, as amended (incorporated herein by reference to
Exhibit B-3.2 of CSW's 1996 Form U5S, File No. 1-1443).
SWEPCO
4 Restated Certificate of Incorporation, as amended through May
6, 1997, including Certificate of Amendment of Restated
Certificate of Incorporation, both filed herewith.
WTU
5 Restated Articles of Incorporation, as amended, and Articles of
Amendment to the Articles of Incorporation, both filed
herewith.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
CPL
1 Indenture, dated as of May 1, 1997, between CPL and the Bank of
New York, as Trustee.
2 First Supplemental Indenture, dated as of May 1, 1997, between
CPL and the Bank of New York, as Trustee, filed herewith.
3 Amended and Restated Trust Agreement of CPL Capital I, dated as
of May 1, 1997, among CPL, as Depositor; the Bank of New York,
as Property Trustee; the Bank of New York (Delaware), as
Delaware Trustee; and the Administrative Trustee, filed
herewith.
4 Guarantee Agreement, dated as of May 1, 1997, delivered by CPL
for the benefit of the holders of CPL Capital I's Preferred
Securities, filed herewith.
5 Agreement as to Expenses and Liabilities, dated as of May 1,
1997, between CPL and CPL Capital I, filed herewith.
<PAGE> 62
PSO
6 Indenture, dated as of May 1, 1997, between PSO and the Bank of
New York, as Trustee.
7 First Supplemental Indenture, dated as of May 1, 1997, between
PSO and the Bank of New York, as Trustee, filed herewith.
8 Amended and Restated Trust Agreement of PSO Capital I, dated as
of May 1,1997, among PSO, as Depositor; the Bank of New York,
as Property Trustee; the Bank of New York (Delaware), as
Delaware Trustee; and the Administrative Trustee, filed
herewith.
9 Guarantee Agreement, dated as of May 1, 1997, delivered by PSO
for the benefit of the holders of PSO Capital I's Preferred
Securities, filed herewith.
10 Agreement as to Expenses and Liabilities, dated as of May 1,
1997, between PSO and PSO Capital I, filed herewith.
SWEPCO
11 Indenture, dated as of May 1, 1997, between SWEPCO and the Bank
of New York, as Trustee, filed herewith.
12 First Supplemental Indenture, dated as of May 1, 1997, between
SWEPCO and the Bank of New York, as Trustee, filed herewith.
13 Amended and Restated Trust Agreement of SWEPCO Capital I, dated
as of May 1, 1997, among SWEPCO, as Depositor; the Bank of New
York, as Property Trustee; the Bank of New York (Delaware), as
Delaware Trustee; and the Administrative Trustee, filed
herewith.
14 Guarantee Agreement, dated as of May 1, 1997, delivered by
SWEPCO for the benefit of the holders of SWEPCO Capital I's
Preferred Securities, filed herewith.
15 Agreement as to Expenses and Liabilities, dated as of May 1,
1997 between SWEPCO and SWEPCO Capital I, filed herewith.
(12) COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
CPL - (Exhibit 12.1), filed herewith.
PSO - (Exhibit 12.2), filed herewith.
SWEPCO - (Exhibit 12.3), filed herewith.
WTU - (Exhibit 12.4), filed herewith.
(18) LETTER RE: CHANGE IN ACCOUNTING PRINCIPLE
CSW - (Exhibit 18.1), filed herewith.
CPL - (Exhibit 18.2), filed herewith.
WTU - (Exhibit 18.3), filed herewith.
(27) FINANCIAL DATA SCHEDULES
CPL - (Exhibit 27.1), filed herewith.
<PAGE> 63
(B) REPORTS FILED ON FORM 8-K:
CSW
ITEM 5. OTHER EVENTS, dated April 11, 1997, reporting bankruptcy
judge's interim order in the El Paso terminated Merger litigation.
ITEM 5. OTHER EVENTS and ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS,
dated April 17, 1997, announcing first quarter earnings and dividend
declaration.
CSW, CPL AND SWEPCO
ITEM 5. OTHER EVENTS and ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS,
dated January 7, 1997, updating (i) CSW's common stock dividend rate;
(ii) CPL Rate Review Docket No. 14965; (iii) the Cajun Asset
Proposal; (iv) the El Paso terminated Merger litigation; (v) a new
telecommunications partnership and (vi) factors impacting business
operations and results.
CSW AND CPL
ITEM 5. OTHER EVENTS, dated March 31, 1997 and filed April 2, 1997,
updating CPL Rate Review Docket No. 14965.
ITEM 5. OTHER EVENTS, dated March 31, 1997 and filed April 3, 1997,
updating CPL Rate Review Docket No. 14965.
ITEM 5. OTHER EVENTS and ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS,
dated March 31, 1997 and filed April 10, 1997, reporting (i) the CPL
Final Order; (ii) Other Matters including legislative action in
Texas, CSW's dividend policy, and certain regulation-related
accounting issues; (iii) a change in the funding of CSW stock plans;
and (v) the results of a special meeting of CPL's shareholders.
ITEM 5. OTHER EVENTS, dated April 7, 1997, providing certain
information in anticipation of a preferred securities offering by CPL
Capital I.
PSO
ITEM 5. OTHER EVENTS, dated April 16, 1997, providing certain
information in anticipation of a preferred securities offering by PSO
Capital I.
SWEPCO
ITEM 5. OTHER EVENTS, dated April 16, 1997, providing certain
information in anticipation of a preferred securities offering by
SWEPCO Capital I.
WTU
None
<PAGE> 64
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. The signature for each undersigned
Registrant shall be deemed to relate only to matters having reference to such
Registrant or its subsidiaries.
CENTRAL AND SOUTH WEST CORPORATION
Date: May 15, 1997 /S/ LAWRENCE B. CONNORS
--------------------------
Lawrence B. Connors
Controller and Chief Accounting Officer
(Principal Accounting Officer)
CENTRAL POWER AND LIGHT COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN ELECTRIC POWER COMPANY
WEST TEXAS UTILITIES COMPANY
Date: May 15, 1997 /S/ R. RUSSELL DAVIS
-----------------------
R. Russell Davis
Controller and Chief Accounting Officer
(Principal Accounting Officer)
RESTATED ARTICLES OF INCORPORATION
WITHOUT AMENDMENT
OF
CENTRAL POWER AND LIGHT COMPANY
1. Central Power and Light Company, a corporation organized and existing
under the laws of the State of Texas, pursuant to the provisions of Article 4.07
of the Texas Business Corporation Act, hereby adopts Restated Articles of
Incorporation which accurately copy the articles of incorporation and all
amendments thereto that are in effect to date and such Restated Articles of
Incorporation as hereinafter set forth contain no change in any provision
thereof.
2. The adoption of the Restated Articles have been effected in conformity
with the provisions of the Texas Business Corporation Act by Resolution of the
Board of Directors of the Corporation on this 10th day of January, 1990.
3. The articles of incorporation and all previous restatements, amendments
and supplements thereto are hereby superseded by the following Restated Articles
of Incorporation which accurately copy the entire text thereof:
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
CENTRAL POWER AND LIGHT COMPANY
-------------------------------------------------------
I
The name of the corporation shall be CENTRAL POWER AND LIGHT COMPANY.
II
The purpose for which it is formed is the generation of and supply of gas,
electric light and motor power to the public.
III
The places where the business of the corporation is to be transacted are in
Nueces County, Texas, and elsewhere within or without the State of Texas in
accordance with the laws of said State, and its principal place of business and
registered office is 539 North Carancahua, Corpus Christi, Texas, in said Nueces
County, Texas, and the name of its registered agent at such address is C. Wayne
Stice.
IV
The period of its duration is perpetual.
V
The number of directors constituting the Board of Directors shall be such
number, not less than three, as shall be fixed from time to time by the By-laws
of the corporation. The names and addresses of the persons now serving as
directors are as follows:
NAME ADDRESS
Robert R. Carey Corpus Christi, Texas
Robert L. Range Corpus Christi, Texas
B. W. Teague Corpus Christi, Texas
Richard P. Verret Corpus Christi, Texas
Clayton R. Kirk Corpus Christi, Texas
Dale E. Ward Corpus Christi, Texas
M. L. Borchelt Dallas, Texas
H. C. Petry, Jr. Carrizo Springs, Texas
Ruben M. Garcia Laredo, Texas
Robert A. McAllen Weslaco, Texas
William R. Farquhar, Jr. Edna, Texas
H. Lee Richards Harlingen, Texas
Jim L. Peterson Corpus Christi, Texas
<PAGE>
VI
(1) The aggregate number of shares which the corporation shall have
authority to issue shall be (a) 12,000,000 shares of Common Stock of the par
value of $25 per share and (b) 3,035,000 shares of Preferred Stock of the par
value of $100 per share, of which 100,000 shares shall be designated and known
as the "4% Preferred Stock" and shall constitute a series of the Preferred
Stock; 75,000 shares shall be designated and known as the "4.20% Preferred
Stock" and shall constitute a series of the Preferred Stock; 260,000 shares
shall be designated and known as the "7.12% Preferred Stock" and shall
constitute a series of the Preferred Stock; 500,000 shares shall be designated
and known as the "8.72% Preferred Stock" and shall constitute a series of the
Preferred Stock; 400,000 shares shall be designated and known as the "10.10%
Preferred Stock" and shall constitute a series of the Preferred Stock; and
500,000 shares shall be designated and known as the "10.05% Preferred Stock" and
shall constitute a series of the Preferred Stock. The Board of Directors of the
corporation shall have authority to establish by resolution, from time to time,
one or more other series of the Preferred Stock and to fix and determine the
designations, the rates, dates, terms and other conditions upon which dividends
shall be payable, redemption prices and terms and conditions of redemption,
amounts payable in the event of the voluntary liquidation of the corporation as
hereinafter provided, sinking fund provisions, provisions for the redemption or
purchase of shares, conversion rights, if any, and terms and conditions of
conversion, and any other special rights or preferences which the Board of
Directors may have authority under the laws of the State of Texas to fix and
determine, applicable to the shares of any such other series, provided that the
terms and provisions set forth herein with respect to the Preferred Stock shall
be applicable to all shares of the Preferred Stock of each series except as and
to the extent otherwise provided herein or fixed and determined by the Board of
Directors by resolution establishing a particular series pursuant to the
authority herein vested in such Board. Shares of the Preferred Stock from time
to time authorized and unissued may be issued as shares of any existing series
of Preferred Stock or of any one or more other series so established by the
Board of Directors.
(2) The holders of shares of the Preferred Stock shall be entitled to
receive, in respect of each share held, dividends upon the par value thereof at
the annual rate specified in the designation of such share or as provided in the
resolution of the Board of Directors authorizing the initial issue of shares of
such series out of the surplus or net profits of the corporation. Dividends on
shares of 4% Preferred Stock, 4.20% Preferred Stock, 7.12% Preferred Stock,
8.72% Preferred Stock, 10.10% Preferred Stock and 10.05% Preferred Stock shall
be payable quarter-yearly on February first, May first, August first and
November first in each year, when and as declared by the Board of Directors.
Dividends on shares of any other series of Preferred Stock shall be payable on
<PAGE>
the dates and as provided in the resolution of the Board of Directors
authorizing the initial issue of shares of such series. Such dividends shall be
cumulative (a) as to shares initially issued of any series, from the date of
issue or such other date as may be provided in the resolution of the Board of
Directors authorizing the initial issue of shares of such series and (b) as to
all other shares of such series, from the first day of the dividend period in
which issued; and such dividends shall be paid, or declared and set apart for
payment, before any dividends shall be declared or paid on or set apart for the
Common Stock, so that if for any past dividend period or the current dividend
period dividends on the Preferred Stock (of all series) shall not have been
paid, or declared and set apart for payment, the deficiency shall be fully paid
or declared and funds set apart for the payment thereof before any dividends
shall be declared or paid on or set apart for the Common Stock. The term
"dividend period", as used herein, refers to each period commencing on the date
on which dividends, if declared, shall be payable and ending on the day
preceding such date. The holders of shares of the Preferred Stock shall not be
entitled to receive any dividends thereon other than the dividends at the annual
rate specified in the designation of such shares or as provided in the
resolution of the Board of Directors authorizing the initial issue of shares of
such series. All shares of the Preferred Stock at any time authorized,
regardless of the series or designation thereof, shall constitute one class of
stock and, EXCEPTING ONLY as to the designations thereof, the par value thereof,
the rates, dates, terms and other conditions upon which dividends shall be
payable thereon, the redemption prices and terms thereof, the amounts payable in
respect thereof in the event of the voluntary liquidation, dissolution or
winding up of the corporation and any provisions as to sinking fund or
conversion into other securities, shall be of equal rank and confer equal rights
upon the holders thereof. Whenever full cumulative dividends as aforesaid upon
the Preferred Stock (of all series) and upon any other shares of stock having
priority as to dividends over the Common Stock, then outstanding, for all past
dividend periods and for the current dividend period shall have been paid, or
declared and set apart for payment, the Board of Directors may declare and pay
dividends on the Common Stock of the corporation, SUBJECT, HOWEVER, to the
restrictions hereinafter set forth.
(3) In the event of the involuntary liquidation, dissolution or winding up
of the corporation, the holders of shares of the Preferred Stock (of all series)
then outstanding shall be entitled to paid in full, out of the net assets of the
corporation, the par value of their shares plus the accrued dividends on such
shares, and no more, before any amount shall be paid or distributed to the
holders of shares of the Common Stock. In the event of the voluntary
liquidation, dissolution or winding up of the corporation, the holders of then
outstanding shares of (a) the 4% Preferred Stock shall be entitled to be paid in
full, out of the net assets of the corporation, the par value of their shares
<PAGE>
and the accrued dividends on such shares, and no more, and (b) the 4.20%
Preferred Stock and any other series of the Preferred Stock shall be entitled to
be paid in full, out of the net assets of the corporation, the then effective
redemption price of such shares (including the accrued dividends on such
shares), and no more, before any amount shall be paid or distributed to the
holders of shares of the Common Stock. After payment in full to the holders of
all shares of the Preferred Stock (of all series) and of all other shares of
stock then outstanding, if any, having a priority over the Common Stock as to
assets, of the amounts to which they are respectively entitled as herein
provided, the remaining assets and profits shall be divided among and paid or
distributed to the holders of shares of the Common Stock.
(4) The corporation, on the sole authority of its Board of Directors, shall
have the right at any time or from time to time to redeem and retire all or any
part of the Preferred Stock, or all or any part of the shares of one or more
series of the Preferred Stock, upon and by the payment to the holders of the
shares to be redeemed, or upon or by setting aside, as hereinafter provided, for
the benefit of such holders, the redemption price or prices of the shares to be
redeemed, which redemption price (a) in respect of shares of the 4% Preferred
Stock shall be $105.75 per share plus accrued dividends to the date of
redemption, (b) in respect of shares of the 4.20% Preferred Stock shall be
$103.75 per share plus accrued dividends to the date of redemption, (c) in
respect of the 7.12% Preferred Stock shall be the sum of $100, and, in addition,
a premium of $7.87 per share if redeemed prior to January 1, 1978; $5.50 per
share if redeemed on or after January 1, 1978 and prior to January 1, 1983;
$3.13 per share if redeemed on or after January 1, 1983 and prior to January 1,
1988; and $1.00 per share if redeemed on or after January 1, 1988; PROVIDED,
that none of the shares of the 7.12% Preferred Stock may be redeemed prior to
January 1, 1978; if such redemption is for the purpose of refunding or is in
anticipation of the refunding of said shares through the use, directly or
indirectly, of funds obtained by the corporation through the issuance of any
shares of Preferred Stock or any other stock ranking prior to or on a parity
with the Preferred Stock, or through the incurrence of debt by the corporation,
at a dividend or interest cost, as the case may be, less than 7.12% per annum;
plus, in each case, accrued dividends to the date of redemption and (d) in
respect of shares of all other series of Preferred Stock shall be the redemption
price or prices as provided in the resolution of the Board of Directors
authorizing the initial issue of shares of such series; PROVIDED that not later
than on the thirtieth day prior to the date fixed for such redemption, nor
earlier than on the ninetieth day before such date of redemption, notice of the
intention of the corporation to redeem such shares, specifying the shares to be
redeemed and the date and place of redemption, shall be deposited in a United
States post office or mail box, at any place in the United States, addressed to
<PAGE>
each holder of record of the shares to be redeemed at his address as the same
appears upon the records of the corporation; AND PROVIDED, further, that in
mailing such notice, unintentional omissions or errors in names or addresses, or
other defects in such mailing, shall not impair the validity of the notice of,
or the proceedings for, such redemption. In every case of the redemption of less
than all the outstanding shares of any particular series of the Preferred Stock,
the shares of such series to be redeemed shall be chosen by proration (so far as
may be without the issuance of fractional shares), by lot or in such other
equitable manner as may be prescribed by resolution of the Board of Directors.
The corporation may deposit, with a bank or trust company, which shall be named
in the notice of redemption, shall be located in the City of New York, New York,
or in the City of Chicago, Illinois, and shall have capital, surplus and
undivided profits aggregating at least $1,000,000, the aggregate redemption
price of the shares to be redeemed, in trust for the payment on or before the
redemption date to or upon the order of the holders of such shares, upon
surrender of the certificates for such shares. Such deposit in trust may, at the
option of the corporation, be upon terms whereby in case the holder of any
shares of the Preferred Stock called for redemption shall not, within ten years
after the date fixed for redemption of such shares, claim the amount on deposit
with any bank or trust company for the payment of the redemption price of such
shares, such bank or trust company, shall on demand, when requested by
resolution of the Board of Directors of the corporation or its successor, pay to
or upon the written order of the corporation or its successor the amount so
deposited, and thereupon such bank or trust company shall be released from any
and all further liability with respect to the payment of such redemption price
and the holder of said shares shall be entitled to look only to the corporation
or its successor for the payment thereof. Upon the giving of notice of
redemption and upon the deposit of the redemption price, as aforesaid, or, if no
such deposit is made, upon the redemption date (unless the corporation defaults
in making payment of the redemption price as set forth in such notice), such
holders shall cease to be stockholders with respect to said shares, and from and
after the making of said deposit and the giving of said notice, or, if no such
deposit is made, after the redemption date (the corporation not having defaulted
in making payment of the redemption price as set forth in such notice), said
shares shall no longer be transferable on the books of the corporation, and said
holders shall have no interest in or claim against the corporation or its
successor with respect to said shares, but shall be entitled only to receive
said moneys on the date fixed for redemption, as aforesaid, from said bank or
trust company, or from the corporation or its successor, without interest
thereon, upon surrender of the certificates for said shares as aforesaid. All
shares of the Preferred Stock so redeemed shall be cancelled and retired.
The term "accrued dividends", as used in this Article VI, shall be deemed
to mean, in respect of any share of the Preferred Stock (of any series) as of
<PAGE>
any given date, the amount of dividends payable on such share, computed, at the
annual dividend rate stated in the designation of such share or as provided in
the resolution of the Board of Directors authorizing the initial issue of shares
of such series, from the date on which dividends thereon became cumulative to
and including such given date, less the aggregate amount of all dividends which
have been paid, or which have been declared and set apart for payment, on such
share.
Nothing herein contained shall limit any legal right of the corporation to
purchase or otherwise acquire any shares of the Preferred Stock of any series;
provided that the corporation shall not redeem, purchase or otherwise acquire
less than all the outstanding shares of the Preferred Stock if at the time of
such redemption, purchase or other acquisition dividends payable on the
Preferred Stock shall be in default in whole or in part unless, prior to or
concurrently with such redemption, purchase or other acquisition, all such
defaults in dividends shall have been cured, or unless such redemption, purchase
or other acquisition shall have been ordered, approved or permitted by the
Securities and Exchange Commission or any successor commission under the Public
Utility Holding Company Act of 1935. All shares of the Preferred Stock so
redeemed, purchased or acquired shall be cancelled and retired.
(5) So long as any shares of the Preferred Stock shall be outstanding, the
corporation shall not, without the affirmative vote or the consent of the record
holders of at least two-thirds of the total number of shares of the Preferred
Stock (of all series) at the time outstanding:
(a) create or authorize, by amendment to the restated articles of
incorporation or otherwise, shares of any class of stock ranking prior to
the Preferred Stock as to dividends or assets or any security convertible
into shares of such prior ranking stock, or issue any of such prior ranking
stock or convertible security after the expiration of one year from such
vote or consent of the holders of the Preferred Stock; or
(b) change, alter or repeal, by amendment to the restated articles of
incorporation or otherwise, any of the rights, preferences or powers of the
holders of the Preferred Stock so as to affect adversely any of such
rights, preferences or powers; provided that (i) any increase or decrease
in the authorized amount of the Preferred Stock or the creation, or any
increase or decrease in the authorized amount, of any class of stock
ranking on a parity with the Preferred Stock as to dividends or assets
shall not be deemed to affect adversely the rights, preferences or powers
of the holders of the Preferred Stock, and (ii) if any such change,
alteration or repeal would affect adversely the rights, preferences or
<PAGE>
powers of the holders of shares of one or more, but less than all, of the
series of the Preferred Stock at the time outstanding, the vote or consent
only of the record holders of at least two-thirds of the total number of
outstanding shares of the series so affected adversely shall be required.
No vote or consent of the holders of the Preferred Stock shall be required
in respect of any transaction enumerated in this Paragraph (5) if, at or prior
to the time when such transaction is to take effect, provision is made for the
redemption or other retirement of all outstanding shares of the Preferred Stock
the vote or consent of which would otherwise be required by this Paragraph (5).
No provision contained in this Paragraph (5) is intended or shall be
construed to relieve the corporation from compliance with any applicable
statutory provision requiring the vote or consent of the holders of a greater
number of the outstanding shares of the Preferred Stock.
(6) So long as any shares of the Preferred Stock shall be outstanding the
corporation shall not, without the affirmative vote or the consent of the record
holders of a majority of the total number of shares of the Preferred Stock (of
all series) at the time outstanding:
(a) merge or consolidate with or into any other corporation or
corporations, or sell or otherwise dispose of all or substantially all the
assets of the corporation, unless such merger, consolidation, sale or other
disposition, or the exchange, issuance or assumption of all securities to
be exchanged, issued or assumed in connection with any such merger,
consolidation, sale or other disposition, shall have been ordered, approved
or permitted by the Securities and Exchange Commission or any successor
commission under the Public Utility Holding Company Act of 1935; provided
that the provisions of this subparagraph (a) shall not apply to the
purchase by the corporation of franchises or assets of another corporation;
or
(b) issue any shares of the Preferred Stock (in addition to 100,000
shares of the 4% Preferred Stock, 75,000 shares of the 4.20% Preferred
Stock and 260,000 shares of the 7.12% Preferred Stock), including the
reissuance of any shares thereof reacquired by the corporation, or shares
of any other stock ranking on a parity with the Preferred Stock as to
dividends or assets, for any purpose other than in exchange for or to
effect the redemption or other retirement of not less than an equal par
amount or stated value of the Preferred Stock or of stock ranking prior to
or on a parity with the Preferred Stock as to dividends or assets at the
time outstanding, unless (1) the gross income of the corporation (after
deducting all taxes, including taxes based on income, and determined as
<PAGE>
hereinafter provided) for twelve consecutive calendar months ending within
the fifteen calendar months immediately preceding the issuance of the
shares to be issued shall have been at least one and one-half times the sum
of (i) the annual interest charge on all indebtedness of the corporation
represented by bonds, notes or other securities, which will be outstanding
immediately after the issuance of the shares to be issued, and (ii) the
annual dividend requirement on all shares of the Preferred Stock and of any
other stock ranking prior to or on a parity with the Preferred Stock as to
dividends or assets (including the shares to be issued), which will be
outstanding immediately after the issuance of the shares to be issued; and
(2) the common stock equity of the corporation, computed as provided in
Paragraph (7) hereof, shall be not less than the aggregate amount payable
in the event of the involuntary liquidation, dissolution or winding up of
the corporation in respect of all shares of the Preferred Stock and of any
other stock ranking prior to or on a parity with the Preferred Stock as to
dividends or assets, which will be outstanding immediately after the
issuance of the shares to be issued; or
(c) issue or assume any unsecured notes, debentures or other
securities representing unsecured indebtedness (herein referred to as
"unsecured obligation"), for any purpose other than refunding or renewing
outstanding unsecured obligations resulting in later maturities or funding
existing unsecured indebtedness (not represented by unsecured obligations),
if immediately after such issue or assumption (1) the principal amount of
all unsecured obligations issued or assumed by the corporation and then
outstanding would exceed 20% of the aggregate of (i) the principal amount
of all bonds or other securities representing secured indebtedness issued
or assumed by the corporation and then outstanding and (ii) the total
capital stock and surplus of the corporation as then recorded on its books
or (2) the principal amount of all unsecured obligations maturing in less
than ten years, issued or assumed by the corporation and then outstanding,
computed as herein provided, would exceed 10% of such aggregate. For the
purpose of this subparagraph (c), the principal amount of any unsecured
obligations which had an original single maturity of more than ten years
from the date thereof, and the principal amount of the final maturity of
any serially-maturing unsecured obligations which had one or more original
maturities of more than ten years from the date thereof, shall not be
regarded as unsecured obligations maturing in less than ten years until
such principal amount shall be due or required to be paid within three
years.
In computing gross income of the corporation for the purposes of
subparagraph (b) of this Paragraph (6), (i) in the event any additional property
or assets are to be acquired by the corporation by the issuance, or the
application of any of the proceeds from the issuance, of any shares of the
<PAGE>
Preferred Stock or of stock ranking on a parity with or junior to the Preferred
Stock as to dividends or assets, to be then issued, the gross income of the
property or assets to be so acquired (computed on the same basis as the gross
income of the corporation as herein provided and for the same period) may be
included, on a pro forma basis, in making such computation of gross income of
the corporation, and (ii) the amounts to be deducted from gross income as
charges for depreciation, retirement, renewals, and replacements and/or
amortization shall not be less in the aggregate than an amount equal to 3.2% (or
such other percentage as may upon application by the corporation be approved by
the Securities and Exchange Commission, or any successor authority, under the
Public Utility Holding Company Act of 1935) of the arithmetical average of the
amount of property of the corporation at the beginning and the amount thereof at
the end, of such twelve month period, in plant accounts of the corporation with
respect to which bonds may at the time be authenticated under any indenture
securing first mortgage bonds of the corporation and which property is
depreciable, determined in accordance with generally accepted principles of
accounting. Amounts included in plant acquisition adjustment account, or
accounts of similar purpose, shall not be included in the amount of such
property if adequate provision for their amortization is made by current charges
to income or surplus. In computing the annual interest charge and the annual
dividend requirement referred to in said subparagraph (b), there shall be
excluded the interest charges and dividend requirements on all indebtedness and
shares of stock, respectively, which are to be redeemed or otherwise retired by
the issuance, or the application of any of the proceeds from the issuance, of
any shares of the Preferred Stock or of stock ranking prior to or on a parity
with the Preferred Stock as to dividends or assets, then to be issued.
If for the purpose of meeting the requirements of clause (2) of
subparagraph (b) of this Paragraph (6), it shall have been necessary to take
into consideration any earned surplus of the corporation, the corporation shall
not thereafter pay any dividends on common stock (as defined in Paragraph (7) of
this Article VI) in an amount which would result in reducing the common stock
equity of the corporation, as defined in said Paragraph (7), to an amount less
than the aggregate amount payable in the event of the involuntary liquidation,
dissolution or winding up of the corporation in respect of all shares of the
Preferred Stock and of stock ranking prior to or on a parity with the Preferred
Stock as to dividends or assets at the time outstanding.
No vote or consent of the holders of the Preferred Stock shall be required
in respect of any transaction enumerated in this Paragraph (6) if, at or prior
to the time when such transaction is to take effect, provision is made for the
<PAGE>
redemption or other retirement of all outstanding shares of the Preferred Stock
the vote or consent of which would otherwise be required by this Paragraph (6).
No provision contained in this Paragraph (6) is intended or shall be
construed to relieve the corporation from compliance with any applicable
statutory provision requiring the vote or consent of the holders of a greater
number of the outstanding shares of the Preferred Stock.
(7) So long as any shares of the Preferred Stock shall be outstanding, the
corporation shall not declare or pay any dividends on common stock of the
corporation (as herein defined), except as follows:
(a) if and so long as the common stock equity of the corporation (as
herein defined) on the last day of a calendar month ending within sixty
days next preceding the date on which a dividend on common stock is
proposed to be declared is, or as a result of the payment of such dividend
would become, less than 20% of total capitalization of the corporation (as
herein defined), the corporation shall not (except as hereinafter provided)
declare any such dividend in an amount which, together with all other
dividends on common stock paid within the year ending with and including
the date on which such dividend is proposed to be payable, exceeds 50% of
the net income of the corporation available for dividends on common stock
(determined as herein provided) for twelve consecutive calendar months
ending within sixty days next preceding the month in which such dividend is
proposed to be declared; provided that if any dividends (or additional
dividends) on common stock could have been declared under the foregoing
limitation in any previous year or years, but were not declared, then such
dividend proposed to be paid may exceed 50% of the above specified net
income of the corporation by a total amount equal to the aggregate amount
of all dividends on common stock that could have been so declared but were
not declared; and
(b) if and so long as the common stock equity on the last day of a
calendar month ending within sixty days next preceding the date on which a
dividend on common stock is proposed to be declared is, or as a result of
the payment of such dividend would become, less than 25% but not less than
20% of total capitalization, the corporation shall not (except as
hereinafter provided) declare any such dividend in an amount which,
together with all other dividends on common stock paid within the year
ending with and including the date on which such dividend is proposed to be
payable, exceeds 75% of the net income of the corporation available for
dividends on common stock for twelve consecutive calendar months ending
within sixty days next preceding the month in which such dividend is
proposed to be declared; provided that if any dividends (or additional
<PAGE>
dividends) on common stock could have been declared under the foregoing
limitation of this paragraph in any previous year or years, but were not
declared, then such dividend proposed to be paid may exceed 75% of the
above specified net income of the corporation by a total amount equal to
the aggregate amount of all dividends on common stock that could have been
so declared but were not declared; and
(c) at any time when the common stock equity is 25% or more of total
capitalization, the corporation shall not declare dividends on common stock
which would reduce the common stock equity below 25% of total
capitalization, except to the extent provided or permitted in subparagraphs
(a) and (b) above.
"Dividends on common stock" of the corporation shall mean and include all
dividends on common stock (other than dividends payable solely in shares of
Common Stock or applied by the recipient to the purchase from the corporation of
shares of its Common Stock), distributions on, and purchases or other
acquisitions for value of, Common Stock of the corporation or other stock, if
any, ranking junior to the Preferred Stock as to dividends or assets.
"Common stock equity" of the corporation shall mean the aggregate of (a)
the par value of, or stated capital represented by, the outstanding shares of
all stock of the corporation ranking junior to the Preferred Stock as to
dividends or assets, and all premiums in respect of such junior ranking stock,
as carried on the books of the corporation, and (b) the amount of all surplus
accounts of the corporation, AFTER DEDUCTING from such aggregate (1) the excess,
if any, of the aggregate amount payable in the event of the involuntary
liquidation, dissolution or winding up of the corporation in respect of all
outstanding shares of stock of the corporation ranking prior to the Common Stock
as to dividends or assets, over the aggregate par value of, or stated capital
represented by, such outstanding shares of prior ranking stock and any premiums
thereon, (2) any amounts recorded on the books of the corporation (estimated, is
not known) for used or useful utility plant and other property in excess of the
original cost of such plant or property, (3) any intangible items (such as
unamortized debt discount and expense, capital stock discount and expense and
other intangible items) set forth on the asset side of the balance sheet of the
corporation as a result of accounting convention, (4) the excess, if any, for
the period beginning November 1, 1943 and ending December 31, 1976, of an amount
equal to 15% of the gross operating revenues derived by the corporation from the
operation of its properties for the period (AFTER EXCLUDING OR DEDUCTING from
such revenues all non-operating income, revenues derived directly from
properties leased to the corporation, and the aggregate cost of electric energy,
gas, water and ice purchased for exchange or resale), over the aggregate amount
charged or provided by the corporation on its books for maintenance, repairs and
<PAGE>
depreciation of property for such period; provided that no deduction shall be
made or required to be made for or in respect of any items or amounts referred
to in clauses (2) and (3) of this paragraph in the event such items or amounts
are being amortized or are provided for, or are being provided for, by reserves
and (5) the excess, if any, for the period beginning January 1, 1977, to the end
of a month ending within ninety days next preceding the date as of which common
stock equity is being determined, of an aggregate amount equal to 3.2% annually
(or such other percentage as may upon application by the corporation be approved
by the Securities and Exchange Commission, or any successor authority, under the
Public Utility Holding Company Act of 1935) of the arithmetical average of the
amount of depreciable property of the corporation at the beginning, and the
amount thereof at the end, of each calendar year and portion thereof contained
in such period, in plant accounts of the corporation, with respect to which
bonds may at the time be authenticated under any indenture securing first
mortgage bonds of the corporation, determined in accordance with generally
accepted principles of accounting (excluding amounts included in plant
acquisition adjustment account, or accounts of similar purpose, if adequate
provision for the amortization of such amounts is made by current charges to
income or surplus), over the aggregate amount charged or provided by the
corporation on its books as charges for depreciation, retirements, renewals and
replacements and/or amortization for such period."
"Total capitalization" of the corporation shall mean the aggregate of (i)
the principal amount of all outstanding bonds, debentures, notes and other
securities representing indebtedness (whether secured or unsecured) of the
corporation maturing more than twelve months after the date as of which total
capitalization is being determined, and (ii) the par value of, or stated capital
represented by, the outstanding shares of the capital stock of all classes of
the corporation, all premiums in respect of such stock, as carried on the books
of the corporation, and the amount of all surplus accounts of the corporation,
after deducting from such aggregate any amounts required to be deducted, in the
determination of common stock equity, pursuant to the provisions of clauses (2)
and (3) of the foregoing definition of "common stock equity".
"Net income of the corporation available for dividends on common stock"
shall be determined by deducting from the sum of the total operating revenues
and other income of the corporation for any given period, all operating expenses
for such period (including maintenance, repairs and depreciation, taxes based on
income and all other taxes, all proper accruals, interest charges, amortization
charges, other proper income deductions and dividends paid or accrued on
outstanding shares of stock of the corporation ranking prior to the Common Stock
as to dividends, for such period), all as determined in accordance with such
system of accounts as may be prescribed by regulatory authorities having
<PAGE>
jurisdiction in the premises, or, in the absence of any such system of accounts,
in accordance with generally accepted accounting principles.
(8) The voting rights of the holders of shares of the Preferred Stock and
of the Common Stock of the corporation shall be as follows:
(a) No holder of shares of the Preferred Stock shall be entitled to
vote, at any meeting of stockholders of the corporation, for the election
of directors or in respect of any other matter, except as expressly
provided in Paragraph (5) or (6) of this Article VI or in this Paragraph
(8) and except as may be required by law. In such excepted cases, each
record holder of shares of the Preferred Stock shall have one vote for each
share of the Preferred Stock held by him. Each record holder of shares of
Common Stock shall, at all meetings of stockholders of the corporation,
have one vote for each share of Common Stock held by him, except as
otherwise provided in this Paragraph (8).
(b) If and when dividends payable on the Preferred Stock shall be in
default in an amount equal to the annual dividends or more per share on all
shares of the Preferred Stock at the time outstanding, and thereafter until
all dividends on such Preferred Stock in default shall have been paid, the
record holders of shares of the Preferred Stock, voting separately as a
class, shall be entitled, at each meeting of stockholders at which
directors are elected, to elect the smallest number of directors necessary
to constitute a majority of the full Board of Directors of the corporation,
and, EXCEPT as provided in the following subparagraph (c), the record
holders of shares of the Common Stock, voting separately as a class, shall
be entitled at any such meeting to elect the remaining directors of the
corporation. The term of office of each director of the corporation shall
terminate upon the election of his successor. At each election of directors
by a class vote pursuant to the provisions of this paragraph, the class
first electing the directors which it is entitled to elect shall name the
directors who are to be succeeded by the directors then elected by such
class, whereupon the term of office of the directors so named shall
terminate. The term of office of the directors not so named shall terminate
upon the election by the other class of the directors which it is entitled
to elect.
(c) If and when all dividends then in default on the Preferred Stock
then outstanding shall be paid (and such dividends shall be paid, or
declared and set apart for payment, out of any funds legally available
therefor, as soon as reasonably practicable), the holders of shares of the
Preferred Stock shall thereupon be divested of the special right with
respect to the election of directors provided for in subparagraph (b) of
this Paragraph (8), and the voting power of the holders of the Preferred
<PAGE>
Stock and the holders of the Common Stock shall revert to the status
existing before the first dividend payment date on which dividends on the
Preferred Stock were not paid in full, but always subject to the same
provisions for vesting such special rights in the record holders of shares
of the Preferred Stock in case of further like defaults in the payment of
dividends thereon as described in said subparagraph (b). Dividends shall be
deemed to have been paid, as that term is used in this subparagraph (c),
whenever such dividends shall have been declared and paid, or declared and
provision made for the payment thereof, or whenever there shall be (i)
funds available for the payment thereof and (ii) sufficient surplus or net
profits of the corporation legally available for the payment thereof which
shall have accrued since the date of the default giving rise to such
special voting right; and thereupon the holders of a majority of the Common
Stock shall have the right to elect directors to succeed those elected by
the holders of the Preferred Stock, provided that in the event all
dividends in default on the Preferred Stock at the time of the election of
such successor directors shall not actually be paid or declared and set
apart for payment within thirty days after such election, such successor
directors so elected shall resign forthwith and the directors elected by
the holders of the Preferred Stock shall forthwith be reelected to fill the
vacancies so created and shall assume office as directors.
(d) In case of any vacancy in the Board of Directors occurring among
the directors elected by the holders of the shares of the Preferred Stock,
as a class, pursuant to subparagraph (b) of this Paragraph (8), the holders
of the shares of the Preferred Stock then outstanding and entitled to vote
may elect a successor to hold office for the unexpired term of the director
whose place shall be vacant. In case of a vacancy in the Board of Directors
occurring among the directors elected by the holders of the shares of the
Common Stock, as a class, pursuant to subparagraph (b) of this Paragraph
(8), the holders of the shares of the Common Stock then outstanding and
entitled to vote may elect a successor to hold office for the unexpired
term of the director whose place shall be vacant. In all other cases, any
vacancy occurring among the directors shall be filled by the vote of a
majority of the remaining directors.
(e) Whenever the holders of the shares of the Preferred Stock, as a
class, become entitled to elect directors of the corporation pursuant to
subparagraph (b) or (d) of this Paragraph (8), or whenever the holders of
the shares of the Common Stock, as a class, become entitled to elect
directors of the corporation pursuant to subparagraph (b) or (d) of this
Paragraph (8), a special meeting of the holders of the shares of the
Preferred Stock or of the holders of the shares of the Common Stock, as the
<PAGE>
case may be, for the election of such directors, shall be held at any time
thereafter upon call by the holders of not less than 1,000 shares of the
Preferred Stock or of the Common Stock, as the case may be, or upon call by
the Secretary of the corporation at the request in writing of any
stockholder addressed to him at the principal office of the corporation. If
no such special meeting be called or be requested to be called, the
election of the directors to be elected by the holders of the shares of the
Preferred Stock, voting as a class, and of those to be elected by the
holders of the shares of the Common Stock, voting as a class, shall take
place at the next annual meeting of the stockholders of the corporation
next succeeding the accrual of such special voting right. At all meetings
of stockholders at which directors are elected during such times as the
holders of shares of the Preferred Stock shall have the special right,
voting as a class, to elect directors pursuant to subparagraph (b) of this
Paragraph (8), the presence in person or by proxy of the holders of a
majority of the outstanding shares of the Common Stock shall be required to
constitute a quorum of such class for the election of directors, and,
except as hereinafter stated, the presence in person or by proxy of the
holders of a majority of the outstanding shares of all series of the
Preferred Stock shall be required to constitute a quorum of such class for
the election of directors; provided, however, that (i) the absence of a
quorum of the holders of stock of either such class shall not prevent the
election at any such meeting, or adjournment thereof, of directors by the
other such class if the necessary quorum of the holders of stock of such
class is present in person or by proxy at such meeting, and (ii) in the
absence of a quorum of the holders of stock of either such class, a
majority of those holders of the stock of such class who are present in
person or by proxy shall have power to adjourn the election of the
directors to be elected by such class, and (iii) at any such adjourned
meeting, the presence in person or by proxy of the holders of not less than
35% of the outstanding shares of the Preferred Stock shall constitute a
quorum of the Preferred Stock for the election of directors by such class,
and (iv) if at any such adjourned meeting the holders of at least 35% of
the outstanding shares of the Preferred Stock shall not be present in
person or by proxy, the directors to be elected by such class shall be
elected by vote of the holders of not less than a majority of the
outstanding shares of Common Stock. Not less than thirty days' notice in
writing of any such adjourned meeting shall, upon request, be given by the
corporation at its expense to the record holders of such class or classes.
(f) In consideration of the issue, sale or delivery by the
corporation, and the purchase or other acquisition by the holders thereof,
of shares of the capital stock (both preferred and common) of the
corporation, each and every present holder and each and every future holder
<PAGE>
of shares of the capital stock (both preferred and common) of the
corporation shall be conclusively deemed, by purchasing, acquiring or
holding such shares, to have expressly consented to all and singular the
terms and provisions of this Paragraph (8) and to have agreed that the
voting rights of such holder, and the restrictions and qualifications
thereof, shall be as set forth in this Paragraph (8).
(9) No share of stock or evidence of indebtedness shall be deemed to be
"outstanding", as that term is used in this Article VI, if prior to or
concurrently with the event in reference to which a determination as to the
amount thereof outstanding is to be made, the requisite funds for the
redemption, payment or other retirement thereof shall be deposited in trust for
that purpose and, in the case of redemption, the requisite notice for the
redemption thereof shall be given or the depositary of such funds shall be
irrevocably authorized and directed to give or complete such notice of
redemption.
(10) No holder of shares of stock of any class of the corporation shall be
entitled, as a matter of right, to subscribe for, purchase or receive any shares
of stock of any class of the corporation, or any rights or options of the
corporation which it may issue or sell, whether out of the number of shares now
authorized or hereafter authorized. Nor shall any holder of shares of stock of
any class of the corporation be entitled, as a matter of right, to subscribe
for, purchase or receive any shares of stock or bonds, debentures or other
obligations which the corporation may issue or sell, which shall be convertible
into or exchangeable for stock of any class of the corporation, or to which
shall be attached or appertain any warrant or warrants (or other instrument or
instruments) which shall confer upon the holder or owner the right to subscribe
for or purchase from the corporation any shares of its capital stock of any
class; and all such additional issues of shares of stock of any class, rights or
options, or of stock or bonds, debentures or other obligations convertible into
or exchangeable for stock, or to which such warrants shall be attached or
appertain, may be issued and disposed of as determined by the Board of Directors
to such persons (whether stockholders or not), at such times, for such
consideration and upon such terms, permitted by the laws of the State of Texas,
as the Board of Directors in its absolute discretion may deem advisable.
(11) The corporation reserves the right to increase or decrease its
authorized capital stock or any class or classes thereof, or any series of any
such class, or to reclassify the same, and to amend, alter, change or repeal any
provision contained in the restated articles of incorporation of the
corporation, or in any future amendment to the restated articles of
incorporation as then in effect, in the manner now prescribed or hereafter
prescribed by law, but subject to such conditions and limitations as are
hereinbefore prescribed; and all rights granted to or conferred upon
<PAGE>
stockholders in the restated articles of incorporation of the corporation, or
any future amendment thereto, are granted or conferred subject to this
reservation.
(12) Neither a consolidation or merger of the corporation with or into any
other corporation, nor a merger of any other corporation into the corporation,
nor the purchase or other acquisition, redemption or other retirement by the
corporation of all or any part of the outstanding shares of its preferred stock
of any class, shall be deemed to be a distribution of assets or a liquidation,
dissolution or winding up, of the corporation within the meaning of any of the
provisions of the restated articles of incorporation of the corporation, as then
in effect.
VII
To the full extent permitted by the Texas Miscellaneous Corporation Laws
Act or any other applicable laws as presently or hereafter in effect, no
director of the corporation shall be liable to the corporation or its
shareholders for monetary damages for or with respect to any acts or omissions
in his or her capacity as a director of the corporation. No amendment to or
repeal of this Article VII shall apply to or have any effect on the liability or
alleged liability of any director of the corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment.
--------------------------
IN TESTIMONY WHEREOF, Central Power and Light Company has caused the
foregoing restated articles of incorporation without amendment to be executed in
duplicate on its behalf by its officers thereunto duly authorized, on this 10th
day of January, 1990.
CENTRAL POWER AND LIGHT COMPANY
By Robert R. Carey
President and Chief Executive Officer
By C. Wayne Stice
Secretary
<PAGE>
THE STATE OF TEXAS
ss.
COUNTY OF NUECES
I, the undersigned authority, do hereby certify that on this 10th day of
January, 1990, personally appeared before me Robert R. Carey, who being by me
first duly sworn, declared that he is the President and Chief Executive Officer
of CENTRAL POWER AND LIGHT COMPANY, that he signed the foregoing document as
President and Chief Executive Officer of said corporation, and that the
statements therein contained are true.
Mary E. Hunt
Notary Public in and for
Nueces County, Texas
<PAGE>
ARTICLES OF CORRECTION
TO
RESTATED ARTICLES OF INCORPORATION
WITHOUT AMENDMENT
OF
CENTRAL POWER AND LIGHT COMPANY
1. The name of the Corporation is Central Power and Light Company, which
is a Texas Corporation.
2. The instrument to be corrected is the RESTATED ARTICLES OF
INCORPORATION WITHOUT AMENDMENT OF CENTRAL POWER AND LIGHT COMPANY, filed with
the Secretary of State on the 30th day of January, 1990.
3. That instrument is incorrect in that it did not incorporate prior
Resolutions of the Company's Board of Directors related to the creation and
issuance of additional series of preferred stock, and it did incorporate
references to a series of preferred stock which had been previously retired.
4. Paragraphs (1) and (2) of Article VI of the RESTATED ARTICLES OF
INCORPORATION WITHOUT AMENDMENT OF CENTRAL POWER AND LIGHT COMPANY are corrected
to read as follows:
"(1) The aggregate number of shares which the corporation shall have
authority to issue shall be (a) 12,000,000 shares of Common Stock of the
par value of $25 per share and (b) 3,035,000 shares of Preferred Stock of
the par value of $100 per share, of which 100,000 shares shall be
designated and known as the "4% Preferred Stock" and shall constitute a
series of the Preferred Stock; 75,000 shares shall be designated and known
as the "4.20% Preferred Stock" and shall constitute a series of the
Preferred Stock; 260,000 shares shall be designated and known as the "7.12%
Preferred Stock" and shall constitute a series of the Preferred Stock;
500,000 shares shall be designated and known as the "8.72% Preferred Stock"
and shall constitute a series of the Preferred Stock; 500,000 shares shall
be designated and known as the "10.05% Preferred Stock" and shall
constitute a series of the Preferred Stock; 750,000 shares shall be
designated and known as the "Money Market Cumulative PreferredTM Stock" and
shall constitute a series of the Preferred Stock; 425,000 shares shall be
designated and known as the "Auction Preferred Stock, Series A" and shall
constitute a series of the Preferred Stock; and 425,000 shares shall be
designated and known as the "Auction Preferred Stock, Series B" and shall
constitute a series of the Preferred Stock. The Board of Directors of the
corporation shall have authority to establish by resolution, from time to
time, one or more other series of the Preferred Stock and to fix and
determine the designations, the rates, dates, terms and other conditions
upon which dividends shall be payable, redemption prices and terms and
conditions of redemption, amounts payable
<PAGE>
in the event of the voluntary liquidation of the corporation as hereinafter
provided, sinking fund provisions, provisions for the redemption or
purchase of shares, conversion rights, if any, and terms and conditions of
conversion, and any other special rights or preferences which the Board of
Directors may have authority under the laws of the State of Texas to fix
and determine, applicable to the shares of any such other series, provided
that the terms and provisions set forth herein with respect to the
Preferred Stock shall be applicable to all shares of the Preferred Stock of
each series except as and to the extent other-wise provided herein or fixed
and determined by the Board of Directors by resolution establishing a
particular series pursuant to the authority herein vested in such Board.
Shares of the Preferred Stock from time to time authorized and unissued may
be issued as shares of any existing series of Preferred Stock or of any one
or more other series so established by the Board of Directors.
"(2) The holders of shares of the Preferred Stock shall be entitled to
receive, in respect of each share held, dividends upon the par value
thereof at the annual rate specified in the designation of such share or as
provided in the resolution of the Board of Directors authorizing the
initial issue of shares of such series out of the surplus or net profits of
the corporation. Dividends on shares of 4% Preferred Stock, 4.20% Preferred
Stock, 7.12% Preferred Stock, 8.72% Preferred Stock, and 10.05% Preferred
Stock shall be payable quarter-yearly on February first, May first, August
first and November first in each year, when and as declared by the Board of
Directors. Dividends on shares of any other series of Preferred Stock shall
be payable on the dates and as provided in the resolution of the Board of
Directors authorizing the initial issue of shares of such series. Such
dividends shall be cumulative (a) as to shares initially issued of any
series, from the date of issue or such other date as may be provided in the
resolution of the Board of Directors authorizing the initial issue of
shares of such series and (b) as to all other shares of such series. from
the first day of the dividend period in which issued; and such dividends
shall be paid, or declared and set apart for payment, before any dividends
shall be declared or paid on or set apart for the Common Stock, so that if
for any past dividend period or the current dividend period dividends on
the Preferred Stock (of all series) shall not have been paid, or declared
and set apart for payment, the deficiency shall be fully paid or declared
and funds set apart for the payment thereof before any dividends shall be
declared or paid on or set apart for the Common Stock. The term "dividend
period", as used herein, refers to each period commencing on the date on
which dividends, if declared, shall be payable and ending on the day
preceding such date. The holders of shares of the Preferred Stock shall not
be entitled to receive any dividends thereon other than the dividends at
the annual rate specified in the designation of such shares or as provided
in the resolution of the Board of Directors authorizing the initial issue
of shares of such series.
<PAGE>
All shares of the preferred Stock at any time authorized, regardless of the
series or designation thereof, shall constitute one class of stock and,
excepting only as to the designations thereof, the par value thereof, the
rates, dates, terms and other conditions upon which dividends shall be
payable thereon, the redemption prices and terms thereof, the amounts
payable in respect thereof in the event of the voluntary liquidation,
dissolution or winding up of the corporation and any provisions as to
sinking fund or conversion into other securities, shall be of equal rank
and confer equal rights upon the holders thereof. Whenever full cumulative
dividends as aforesaid upon the Preferred Stock (of all series) and upon
any other shares of stock having priority as to dividends over the Common
Stock, then outstanding, for all past dividend periods and for the current
dividend period shall have been paid, or declared and set apart for
payment, the Board of Directors may declare and pay dividends on the Common
Stock of the corporation, subject, however, to the restrictions hereinafter
set forth."
IN TESTIMONY WHEREOF, Central Power and Light Company has caused the
foregoing Articles of Correction to be executed in duplicate on its behalf by
its officers duly authorized, on this 23 day of April, 1992.
CENTRAL POWER AND LIGHT COMPANY
By P. Richard Shamblin
Vice President - Finance
By C Wayne Stice
Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
CENTRAL POWER AND LIGHT COMPANY
Central Power and Light Company (the "Corporation"), a
corporation organized and existing by virtue of the laws of the
State of Texas, executes these Articles of Amendment to its
Restated Articles of Incorporation, as amended, pursuant to the
provisions of Article 4.04 of the Texas Business Corporation
Act:
1. The name of the corporation is Central Power and
Light Company.
2. Paragraph (1)(a) of Part II of the Statement of
Resolution Establishing the Auction Rate Preferred Stock, Series
A (the "APS A") of the Corporation's Restated Articles of
Incorporation is hereby amended by changing the first sentence
thereof to read as follows:
(a) "'AA' Rate Multiple", on any Auction Date shall
mean the percentage determined as set forth below
based on the prevailing rating of APS in effect at the
close of business on the Business Day immediately
preceding such Auction Date:
Prevailing Rating* Percentage
AA-/aa3 or above 150%
A-/A3 200%
BBB-/baa3 225%
Below BBB-/baa3 275%
*In the case of a split rating, the Maximum Rate will
be determined on the basis of the lower rating. For
example, a rating of AA/A would result in a maximum
Rate of 200% of the 'AA' Composite Commercial Paper
Rate.
<PAGE>
The Board of Directors may at its option and in its
sole discretion, by written notice delivered to the
Trust Company and the Securities Depository, increase
the AA Rate Multiples without obtaining approval of
the holders of the APS as follows:
Prevailing Rating* Percentage
AA-/aa3 or above up to 175%
A-/A3 up to 225%
BBB-/baa3 up to 250%
Below BBB-/baa3 up to 300%
*In the case of a split rating, the Maximum Rate will
be determined on the basis of the lower rating. For
example, a rating of AA/A would result in a maximum
Rate of 225% of the 'AA' Composite Commercial Paper
Rate."
The Board of Directors may also designate higher AA
Rate Multiples than those referred to in the preceding
sentence upon receipt of an opinion of counsel to the
Corporation that the use of higher AA Rate Multiples
will not adversely affect the federal income tax
treatment of the APS. However, in no event will
higher AA Rate Multiples be designated by the Board of
Directors unless the Coverage Test for the issuance of
additional preferred stock complies with the
Commission's Statement of Policy Regarding Preferred
Stock Subject to the Public Utility Holding Company
Act of 1935 (February 16, 1956, HCAR 13106).
3. The foregoing amendment has been effected in
conformity with the provisions of the Texas Business Corporation
Act and the Corporation's Restated Articles of Incorporation and
2
<PAGE>
was duly approved and adopted on May 21, 1992, by the holders of shares
of the Corporation's APS A entitled to vote thereon.
4. The number of shares of stock of the Corporation outstanding
at the time of the adoption of said amendment was 6,755,535 shares of
Common Stock and 2,858,750 shares of Preferred Stock. Holders of shares
of the Corporation's APS A were entitled to vote on said amendment as
a class.
375,000 shares of the APS A voted for the Amendment set forth in
paragraph 2 of these Articles; and 0 shares of APS A voted
against such amendment.
Dated: October 8, 1992
CENTRAL POWER AND LIGHT COMPANY
By P Richard Shamblin
(Corporate seal)
ATTEST:
C Wayne Stice
<PAGE>
STATE OF TEXAS
COUNTY OF NUECES
I, the undersigned authority, do hereby certify that on
this day personally appeared before me P. Richard Shamblin who
declared he is Vice President - Finance of the corporation executing the
foregoing document, and being duly sworn, acknowledged that he signed
the foregoing document in the capacity therein set forth and declared
that the statements contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 8th day of October, 1992.
Imelda V. Perez
Notary Public, Nueces County, Texas
4
<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
CENTRAL POWER AND LIGHT COMPANY
Central Power and Light Company (the "Corporation"), a
corporation organized and existing by virtue of the laws of the
State of Texas, executes these Articles of Amendment to its
Restated Articles of Incorporation, as amended, pursuant to the
provisions of Article 4.04 of the Texas Business Corporation
Act:
1. The name of the corporation is Central Power and
Light Company.
2. Paragraph (1)(a) of Part II of the Statement of
Resolution Establishing the Auction Rate Preferred Stock, Series
B (the "APS B") of the Corporation's Restated Articles of
Incorporation is hereby amended by changing the first sentence
thereof to read as follows:
(a) "'AA' Rate Multiple", on any Auction Date shall
mean the percentage determined as set forth below
based on the prevailing rating of APS in effect at the
close of business on the Business Day immediately
preceding such Auction Date:
Prevailing Rating* Percentage
AA-/aa3 or above 150%
A-/A3 200%
BBB-/baa3 225%
Below BBB-/baa3 275%
*In the case of a split rating, the Maximum Rate will
be determined on the basis of the lower rating. For
example, a rating of AA/A would result in a maximum
Rate, of 200% of the 'AA' Composite Commercial Paper
Rate.
<PAGE>
The Board of Directors may at its option and in its
sole discretion, by written notice delivered to the
Trust Company and the Securities Depository, increase
the AA Rate Multiples without obtaining approval of
the holders of the APS as follows:
Prevailing Rating* Percentage
AA-/aa3 or above up to 175%
A-/A3 up to 225%
BBB-/baa3 up to 250%
Below BBB-/baa3 up to 300%
*In the case of a split rating, the Maximum Rate will
be determined on the basis of the lower rating. For
example, a rating of AA/A would result in a maximum
Rate of 225% of the 'AA' Composite Commercial Paper
Rate."
The Board of Directors may also designate higher AA
Rate Multiples than those referred to in the preceding
sentence upon receipt of an opinion of counsel to the
Corporation that the use of higher AA Rate Multiples
will not adversely affect the federal income tax
treatment of the APS. However, in no event will
higher AA Rate Multiples be designated by the Board of
Directors unless the Coverage Test for the issuance of
additional preferred stock complies with the
Commission's Statement of Policy Regarding Preferred
Stock Subject to the Public Utility Holding Company
Act of 1935 (February 16, 1956, HCAR 13106).
3. The foregoing amendment has been effected in
conformity with the provisions of the Texas Business Corporation
Act and the Corporation's Restated Articles of Incorporation and
2
<PAGE>
was duly approved and adopted on June 4, 1992, by the holders of shares
of the Corporation's APS B entitled to vote thereon.
4. The number of shares of stock of the Corporation
outstanding at the time of the adoption of said amendment was 6,755,535
shares of Common Stock and 2,858,750 shares of Preferred Stock. Holders
of shares of the Corporation's APS B were entitled to vote on said
amendment as a class.
339,000 shares of the APS B voted for the Amendment set forth in
paragraph 2 of these Articles; and 0 shares of APS B voted
against such amendment.
Dated: October 8, 1992
CENTRAL POWER AND LIGHT COMPANY
By P. Richard Shamblin
(Corporate Seal)
ATTEST:
C. Wayne Stice
<PAGE>
STATE OF TEXAS
COUNTY OF NUECES;
I, the undersigned authority, do hereby certify that on
this day personally appeared before me P. Richard Shamblin who declared
he is Vice President - Finance of the corporation executing the
foregoing document, and being duly sworn, acknowledged that he signed
the foregoing document in the capacity therein set forth and declared
that the statements contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
8th day of October, 1992.
Imelda V. Perez
Notary Public, Nueces County, Texas
<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
CENTRAL POWER AND LIGHT COMPANY
Central Power and Light Company (the "Corporation"), a
corporation organized and existing by virtue of the laws of the
State of Texas, executes these Articles of Amendment to its
Restated Articles of Incorporation, as amended, pursuant to the
provisions of Article 4.04 of the Texas Business Corporation
Act:
1. The name of the corporation is Central Power and
Light Company.
2. Paragraph (1)(a) of Part II of the Statement of
Resolution Establishing the Money Market Cumulative Preferred
Stock (the "MMP") of the Corporation's Restated Articles of
Incorporation is hereby amended by changing the first sentence
thereof to read as follows:
(a) "'AA' Rate Multiple", on any Auction Date shall
mean the percentage determined as set forth below
based on the prevailing rating of MMP in effect at the
close of business on the Business Day immediately
preceding such Auction Date:
Prevailing Rating* Percentage
AA-/aa3 or above 150%
A-/A3 200%
BBB-/baa3 225%
Below BBB-/baa3 275%
*In the case of a split rating, the Maximum Rate will be
determined on the basis of the lower rating. For example, a
rating of AA/A would result in a maximum Rate of 200% of
the 'AA' Composite Commercial Paper Rate.
<PAGE>
The Board of Directors may at its option and in its
sole discretion, by written notice delivered to the
Trust Company and the Securities Depository, increase
the AA Rate Multiples without obtaining approval of
the holders of the MMP as follows:
Prevailing Rating* Percentage
AA-/aa3 or above up to 175%
A-/A3 up to 225%
BBB-/baa3 up to 250%
Below BBB-/baa3 up to 300%
*In the case of a split rating, the Maximum Rate will be
determined on the basis of the lower rating. For example, a
rating of AA/A would result in a maximum Rate of 225% of
the 'AA' Composite Commercial Paper Rate."
The Board of Directors may also designate higher AA
Rate Multiples than those referred to in the preceding
sentence upon receipt of an opinion of counsel to the
Corporation that the use of higher AA Rate Multiples
will not adversely affect the federal income tax
treatment of the MMP. However, in no event will
higher AA Rate Multiples be designated by the Board of
Directors unless the Coverage Test for the issuance of
additional preferred stock complies with the
Commission's Statement of Policy Regarding Preferred
Stock Subject to the Public Utility Holding Company
Act of 1935 (February 16, 1956, HCAR 13106).
3. The foregoing amendment has been effected in
conformity with the provisions of the Texas Business Corporation
Act and the Corporation's Restated Articles of Incorporation and
2
<PAGE>
was duly approved and adopted on June 18, 1992, by the holders of
shares of the Corporation's MMP entitled to vote thereon.
4. The number of shares of stock of the Corporation outstanding
at the time of the adoption of said amendment was 6,755,535 shares of
Common Stock and 2,858,750 shares of Preferred Stock. Holders of shares
of the Corporation's MMP were entitled to vote on said amendment as a
class.
690,000 shares of the MMP voted for the Amendment set forth in
paragraph 2 of these Articles; and 0 shares of MMP voted against
such amendment.
Dated: October 8, 1992
CENTRAL POWER AND LIGHT COMPANY
By P Richard Shamblin
(Corporate Seal)
ATTEST:
C Wayne Stice
<PAGE>
STATE OF TEXAS
COUNTY OF NUECES
I, the undersigned authority, do hereby certify that on this
day personally appeared before me P. Richard Shamblin who declared he
is Vice President - Finance of the corporation executing the foregoing
document, and being duly sworn, acknowledged that he signed the
foregoing document in the capacity therein set forth and declared that
the statements contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 8th day of October, 1992.
Imelda V. Perez
Notary Public, Nueces County, Texas
4
<PAGE>
February 1, 1994
STATEMENT OF CHANGE OF REGISTERED OFFICE
OR REGISTERED AGENT OR BOTH BY
A CORPORATION
1. The name of the corporation is Central Power and Light Company.
The corporation's charter number is 00085011-00.
2. The address of the registered office as PRESENTLY shown in the records of
the Texas secretary of state is: (Please provide street address, city, state
and zip code. The address must be in Texas).
P.O. Box 2121, 539 N. Carancahua, Corpus Christi, TX 78403-2121.
3. A. The address of the NEW registered office is: (Please provide street
address, city, state and zip code. The address must be in Texas).
OR B. X The registered office address will not change.
4. The name of the registered agent as PRESENTLY shown in the records of the
Texas secretary of state is C. Wayne Stice.
5. A. X The name of the NEW registered agent is Cris Wright.
OR B. The registered agent will not change.
6. Following the changes shown above, the address of the registered office and
the address of the office of the registered agent will continue to be identical,
as required by law.
7. The changes shown above were authorized by:
(Profit coporations may select A or B)
(Non-Profit corporations may select A, B, or C)
A. The board of directors; OR
B. X An officer of the corporation so authorized by the board of directors;
OR
C. The members of the corporation in whom management of the corporation
is vested pursuant to article 2.14C of the Texas Non-Profit
Corporation Act.
Melanie J. Richardson
An Authorized Officer
Melanie J. Richardson
Vice President and Treasurer
<PAGE>
May 26, 1994
STATEMENT OF CHANGE OF REGISTERED OFFICE
OR REGISTERED AGENT OR BOTH BY
A CORPORATION
1. The name of the corporation is Central Power and Light Company.
The corporation's charter number is 00085011-00.
2. The address of the registered office as PRESENTLY shown in the records of
the Texas secretary of state is: (Please provide street address, city, state
and zip code. The address must be in Texas).
P.O. Box 2121, 539 N. Carancahua, Corpus Christi, TX 78403-2121.
3. A. The address of the NEW registered office is: (Please provide street
address, city, state and zip code. The address must be in Texas).
OR B. X The registered office address will not change.
4. The name of the registered agent as PRESENTLY shown in the records of the
Texas secretary of state is Cris Wright.
5. A. X The name of the NEW registered agent is Kathryn S. Murlin.
OR B. The registered agent will not change.
6. Following the changes shown above, the address of the registered office and
the address of the office of the registered agent will continue to be identical,
as required by law.
7. The changes shown above were authorized by:
(Profit coporations may select A or B)
(Non-Profit corporations may select A, B, or C)
A. The board of directors; OR
B. X An officer of the corporation so authorized by the board of directors;
OR
C. The members of the corporation in whom management of the corporation
is vested pursuant to article 2.14C of the Texas Non-Profit
Corporation Act.
Melanie J. Richardson
An Authorized Officer
Melanie J. Richardson
Vice President-Administration
<PAGE>
May 1, 1995
STATEMENT OF CHANGE OF REGISTERED OFFICE
OR REGISTERED AGENT OR BOTH BY
A CORPORATION
1. The name of the corporation is Central Power and Light Company.
The corporation's charter number is 00085011-00.
2. The address of the registered office as PRESENTLY shown in the records of
the Texas secretary of state is: (Please provide street address, city, state
and zip code. The address must be in Texas).
P.O. Box 2121, 539 N. Carancahua, Corpus Christi, TX 78403-2121.
3. A. The address of the NEW registered office is: (Please provide street
address, city, state and zip code. The address must be in Texas).
OR B. X The registered office address will not change.
4. The name of the registered agent as PRESENTLY shown in the records of the
Texas secretary of state is Kathryn S. Murlin.
5. A. X The name of the NEW registered agent is Cris Wright.
OR B. The registered agent will not change.
6. Following the changes shown above, the address of the registered office and
the address of the office of the registered agent will continue to be identical,
as required by law.
7. The changes shown above were authorized by:
(Profit coporations may select A or B)
(Non-Profit corporations may select A, B, or C)
A. The board of directors; OR
B. X An officer of the corporation so authorized by the board of directors;
OR
C. The members of the corporation in whom management of the corporation
is vested pursuant to article 2.14C of the Texas Non-Profit
Corporation Act.
Melanie J. Richardson
An Authorized Officer
Melanie J. Richardson
Vice President-Administration
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
CENTRAL POWER AND LIGHT COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to the Articles of Incorporation:
ARTICLE ONE. The name of the corporation is Central Power and Light
Company.
ARTICLE TWO. The following amendment to the Articles of Incorporation
was adopted by the shareholders of the corporation on April 7, 1997.
The Articles of Incorporation are hereby amended to delete subsection
(c) of paragraph (6) of Article VI which read in its entirety as follows:
(c) issue or assume any unsecured notes, debentures or other
securities representing unsecured indebtedness (herein referred to as
"unsecured obligation"), for any purpose other than refunding or
renewing outstanding unsecured obligations resulting in later maturities
or funding existing unsecured indebtedness (not represented by unsecured
obligations), if immediately after such issue or assumption (1) the
principal amount of all unsecured obligations issued or assumed by the
corporation and then outstanding would exceed 20% of the aggregate of
(i) the principal amount of all bonds or other securities representing
secured indebtedness issued or assumed by the corporation and then
outstanding and (ii) the total capital stock and surplus of the
corporation as then recorded on its books or (2) the principal amount of
all unsecured obligations maturing in less than ten years, issued or
assumed by the corporation and then outstanding, computed as herein
provided, would exceed 10% of such aggregate. For the purpose of this
subparagraph (c), the principal amount of any unsecured obligations
which had an original single maturity of more than ten years from the
date thereof, and the principal amount of the final maturity of any
serially-maturing unsecured obligations which had one or more original
maturities of more than ten years from the date thereof, shall not be
regarded as unsecured obligations maturing in less than ten years until
such principal amount shall be due or required to be paid within three
years.
<PAGE>
ARTICLE THREE. The number of shares of the corporation outstanding at
the time of adoption of the amendment was 8,530,535 and the number of shares
entitled to vote thereon was 8,530,535.
The designation and number of outstanding shares of each class or series
entitled to vote thereon as a class were as follows:
Number of Shares Outstanding
CLASS OR SERIES AND ENTITLED TO VOTE
Common 6,755,535
Preferred 1,775,000
ARTICLE FOUR. The number of shares of the corporation voted for the
amendment was 8,099,068 and the number of shares of the corporation voted
against the amendment was 172.
The number of shares of each class or series entitled to vote as a class
or series voted for or against such amendment was as follows:
Number of Shares Number of Shares
CLASS OR SERIES VOTED FOR VOTED AGAINST
Common 6,755,535 0
Preferred 1,344,073 172
ARTICLE FIVE. The foregoing amendment will not effect a change in the
amount of stated capital of the corporation.
<PAGE>
CENTRAL POWER AND LIGHT COMPANY
By: Wendy G. Hargus
Name: Wendy G. Hargus
Title: Treasurer
SOUTHWESTERN ELECTRIC POWER COMPANY
RESTATED CERTIFICATE OF INCORPORATION
Dated: December 14, 1970
(As Amended Through May 6, 1997)
FIRST. The name of this corporation is Southwestern Electric Power
Company.
SECOND. The location of its principal office in the State of Delaware is in
the City of Wilmington, County of New Castle. The name of the agent therein, and
in charge thereof and upon whom legal process against this corporation may be
served, is The Corporation Trust Company.
THIRD. The nature of the business of, and the objects and purposes proposed
to be transacted, promoted and carried on by, the corporation are to do any or
all of the things herein mentioned and set forth, as fully and to the same
extent, to all intents and purposes, as natural persons might or could do, and
in any part of the world, namely:
To produce, or in any manner acquire, and to sell and dispose of, and
distribute, artificial gas, and its by-products and residual products, and
to construct, or in any manner acquire, to own, hold, and operate, and to
sell, exchange, lease and incumber, or in any manner dispose of, works,
buildings, pipelines, mains, machinery, apparatus, appliances, facilities,
rights, privileges, franchises, ordinances, and all such real and personal
property as may be necessary, useful or convenient to the production,
acquisition, storage and distribution of the aforesaid products.
To mine for, prospect for, drill for, produce, buy and in any manner
acquire, and to market, sell, transport and distribute, natural gas; to
mine for, produce, buy and in any manner acquire, to refine, manufacture,
into its several products to sell, market, distribute and transport,
petroleum, and its products, and by-products, and to construct, lay,
purchase, or in any manner acquire, to maintain and operate, and to sell,
lease, encumber, or in any manner dispose of, works, buildings, pipelines,
mains, machinery, apparatus, appliances, facilities, rights, privileges,
franchises, ordinances, and all such real and personal property as may be
necessary, useful or convenient to the production, acquisition, storage,
transportation, and distribution of natural gas or petroleum, or both.
To manufacture, buy, sell, rent and deal in stoves, engines, motors,
lamps, and other apparatus and appliances calculated, directly or
indirectly, to promote the consumption or use of natural or artificial gas
or petroleum, or any of their products or by-products.
To lease, buy, or otherwise acquire, to hold and operate and to sell,
lease, incumber, or otherwise dispose of, petroleum oil and gas lands and
leases, and right to explore for and remove natural gas and petroleum, and
to take contracts for the drilling of oil and gas wells, and to carry out
and execute the same.
To generate, produce, buy, or in any manner acquire, and to sell,
dispose of and distribute, electricity for light, heat, power and other
purposes, and to construct, erect, or in any manner acquire, to own, hold
and operate, and to sell, exchange, lease, incumber, or in any manner
dispose of, works, poles, wires, conduits, subways, cables, machinery,
apparatus, appliances, facilities, rights, privileges, franchises,
ordinances and all such real and personal property as may be necessary,
useful or convenient in the production, accumulation, sale, transmission,
and distribution of electricity, and to manufacture, buy, sell, lease and
deal in, fixtures, chandeliers, electroliers, brackets, lamps, globes,
motors, generators, meters, dynamos, batteries and all other appliances,
appurtenances and devices capable of being employed in connection with the
generation, accumulation, distribution, transmission and use of
electricity.
To furnish light, heat and power by natural or artificial gas,
electricity, steam, water or other means, and to acquire, operate and
dispose of all such real and personal property, and such rights, privileges
and franchises, as shall be necessary, useful or convenient to such ends.
To construct, or in any manner acquire, to equip, to own, hold and
operate, and to sell, exchange, lease, incumber, or in any manner dispose
of, street railways, and interurban railways, for the transportation of
passengers, merchandise, mail, express and other freight, and to acquire,
hold, operate and dispose of such real and personal property, rights,
privileges, franchises and ordinances, as may be necessary, useful or
convenient for such purpose, including parks and other public places of
amusement and attraction calculated to promote the use of any such street
or interurban railway.
To purchase, subscribe for, or in any manner acquire, to own, and
hold, to receive and dispose of the income from, to sell, assign, transfer,
pledge, mortgage, or in any manner dispose of, and to exercise all the
rights of individual natural persons with respect to, any bonds,
securities, and evidences of indebtedness, of, or shares of stock in, any
corporation, association or joint stock company of the State of Delaware,
or of any other state, territory or country.
To sell, or in any manner dispose of, mortgage or pledge any stocks,
bonds or other obligations, or any property, which at any time may be held
by the Company, for its proper corporate purposes, as and when the Board of
Directors shall determine.
To manufacture, buy, sell and deal in ice; to carry on and conduct the
business of cold storage, refrigeration or freezing; and to acquire by
construction, purchase, or otherwise, and to maintain and operate any plant
or property useful for any of said purposes.
IN FURTHERANCE AND NOT IN LIMITATION of the general powers conferred by the
laws of the State of Delaware, it is expressly provided that the Company shall
also have the following additional powers, namely:
To acquire the good will, rights and property, and to undertake the
whole or any part of the assets or liabilities, of any person, firm,
association or corporation; to pay for the same in cash, the stock or bonds
of this Company, or otherwise; to hold, or in any manner dispose of, the
whole or any part of the property so purchased; to conduct in any lawful
manner the whole or any part of any business so acquired, and to exercise
all the powers necessary or convenient in and about the conduct and
management of such business.
To apply for, purchase, or in any manner acquire, and to hold, own,
use and operate, and to sell, or in any manner dispose of, and to grant
licenses or other rights, in respect of, and in any manner deal with, any
and all rights, inventions, improvements and processes used in connection
with or secured under letters patent or copyrights of the United States, or
other countries, or otherwise, and to work, operate and develop the same,
and to carry on any business, manufacturing or otherwise, which may,
directly or indirectly, effectuate these objects, or any of them.
To enter into, make, and perform contracts of every kind with any
person, firm, association or corporation, county, parish, state, territory,
or government, or other municipality, or governmental subdivision, and,
without limit as to amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments, so far
as may be permitted by the laws of the State of Delaware.
To have one or more offices out of the State of Delaware, and to carry
on its business and promote its objects without restriction as to place or
amount.
To guarantee any dividends or bonds or contracts or other obligations.
While the owner of shares of stock of, or interests in, any
corporation, joint stock company, firm, or association, to exercise all the
rights and privileges of such ownership, including the right to vote
thereon, and to do anything needful or convenient for the protection,
improvement, betterment or enhancement in value of such shares of stock or
interests, or any bonds or obligations owned by the Company, and to in any
manner aid any such corporation, joint stock company, firm or association,
the stock, bonds, or other obligations, of, or interests in, which are held
by the Company.
To do any or all of the things herein set forth to the same extent as
natural persons might or could do, and in any part of the world, as
principals, agents, contractors, trustees, or otherwise; and in general to
carry on any business in connection therewith, whether manufacturing or
otherwise, and with all the powers conferred by the laws of Delaware upon
corporations organized under the Act* referred to in the last paragraph of
the original Certificate of Incorporation of the corporation (which
paragraph has been omitted from this Restated Certificate as stated above).
FOURTH. The aggregate number of shares of stock of all classes which the
corporation has authority to issue is Nine Million Four Hundred Sixty Thousand
(9,460,000) shares, of which Seven Million Six Hundred Thousand (7,600,000)
shares of the par value of Eighteen Dollars ($18) each shall be of a class
designated Common Stock, and One Million Eight Hundred Sixty Thousand
(1,860,000) shares of the par value of One Hundred Dollars ($100) each shall be
of a class designated Preferred Stock.
Seventy-five Thousand (75,000) shares of the Preferred Stock shall be
designated 5% Preferred Stock (the "5% Series") and shall constitute a series of
the Preferred Stock; Twenty-five Thousand (25,000) shares of the Preferred Stock
shall be designated 4.65% Preferred Stock (the "4.65% Series") and shall
constitute a series of the Preferred Stock; Sixty Thousand (60,000) shares of
the Preferred Stock shall be designated 4.28% Preferred Stock (the "4.28%
Series") and shall constitute a series of the Preferred Stock; and the remaining
shares of the Preferred Stock may be issued as additional shares of the 5%
Series, the 4.65% Series or the 4.28% Series, or as shares of one or more other
series, all as may be determined from time to time by the Board of Directors.
Shares of each series of the Preferred Stock shall have such designation,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as are stated and expressed
herein or in the resolution or resolutions providing for the issue of shares of
such series adopted by the Board of Directors as hereinafter provided. The
powers, preferences and rights of the classes of stock of the corporation and
the qualifications, limitations or restrictions of such powers, preferences and
rights, and the express grant of authority to the Board of Directors to fix by
resolution or resolutions the designations and certain of the powers,
preferences and rights of the shares of any additional series of the Preferred
Stock and the qualifications, limitations or restrictions of such powers,
preferences and rights, to the extent not fixed herein, are as hereinafter
provided.
- ------------
* An Act of the Legislature of the State of Delaware entitled "An Act
Providing A General Corporation Law", approved March 10, 1899, and the acts
amendatory thereof and supplemental thereto.
Authority is hereby expressly granted to the Board of Directors of the
corporation to establish by resolution, from time to time, one or more other
series of the Preferred Stock and to fix and determine the designations, rates
of dividend, the dates from which dividends shall be cumulative, redemption
prices and terms and conditions of redemption, the terms, provisions and
conditions of any sinking fund, conversion rights, if any, and terms and
conditions of conversion, the amounts payable in the event of the voluntary
liquidation, dissolution or winding up of the corporation, and any other special
rights which the Board of Directors may have authority under the laws of
Delaware to fix and determine, applicable to the shares of the respective
series, provided that the terms and provisions set forth herein with respect to
the Preferred Stock shall be applicable to all shares of the Preferred Stock of
each series except as and to the extent otherwise provided herein or fixed and
determined by the Board of Directors by resolution establishing a particular
series pursuant to the authority herein vested in such Board. Any authorized and
unissued shares of the Preferred Stock and any shares of the Preferred Stock
from time to time having the status of unissued shares may be issued as shares
of the 5% Series, the 4.65% Series or the 4.28% Series, or as shares of any one
or more other series established by the Board of Directors as herein authorized.
(1) The holders of shares of the Preferred Stock shall be entitled to
receive, in respect of each share held, preferential dividends upon the par
value thereof at the annual rate specified in the designation of such share, and
no more, payable quarter-yearly on January first, April first, July first and
October first in each year, when and as declared by the Board of Directors, out
of the surplus or net profits of the corporation. Such dividends shall be
cumulative (a) as to the 75,000 outstanding shares of the 5% Series, from the
first day of the dividend period in which such shares were originally issued,
(b) as to the 25,000 outstanding shares of the 4.65% Series and the 60,000
shares of the 4.28% Series initially to be issued, from the date of issue
thereof, (c) as to the shares initially issued of any other series, from the
date of issue or such other date as may be provided in the resolution of the
Board of Directors authorizing the initial issue of shares of such series, and
(d) as to additional shares of any then outstanding series, from the first day
of the dividend period in which issued; and such dividends shall be paid, or
declared and set apart for payment, before any dividends shall be declared or
paid on or set apart for the Common Stock and before any payments are made to
any sinking fund created as herein provided for any series of Preferred Stock,
so that if for any past dividend period or the current dividend period dividends
on the Preferred Stock (of all series) shall not have been paid, or declared and
set apart for payment, the deficiency shall be fully paid or declared and funds
set apart for the payment thereof before any dividends shall be declared or paid
on or set apart for the Common Stock and before any payments are made to any
sinking fund created for any series of Preferred Stock. No dividend shall at any
time be paid on or set apart for any share of Preferred Stock, of any series,
unless at the same time there shall be paid on or set apart for all shares of
Preferred Stock (of all series) then outstanding dividends in such amount that
the holders of all shares of the Preferred Stock (of all series) shall receive
or have set apart for them a uniform percentage of the full annual dividend to
which they are, respectively, entitled. The term "dividend period" as used
herein, refers to each period of three consecutive calendar months ending on the
day next preceding the date on which dividends, if declared, shall be payable.
The holders of the shares of the Preferred Stock shall not be entitled to
receive any dividends thereon other than cash dividends at no more than the
annual rate specified in the designation of such shares. All shares of the
Preferred Stock at any time authorized, regardless of the series or designation
thereof, shall constitute one class of stock and, except as to those provisions
applicable only to the shares of a particular series as provided herein or as
fixed and determined by the Board of Directors pursuant to the authority herein
vested in the Board of Directors, shall be of equal rank and confer equal rights
upon the holders thereof. Whenever full cumulative dividends as aforesaid upon
the Preferred Stock (of all series) and upon any other shares of stock having
priority as to dividends over the Common Stock, then outstanding, for all past
dividend periods and for the current dividend period shall have been paid, or
declared and set apart for payment, and after complying with all provisions in
respect of any sinking fund or funds for the Preferred Stock of any series (if
and to the extent compliance with such provisions is a condition precedent to
the declaration or payment of dividends on Common Stock), the Board of Directors
may declare and authorize the payment of dividends on the Common Stock of the
corporation, SUBJECT, HOWEVER, to the restrictions hereinafter set forth.
(2) In the event of the involuntary liquidation, dissolution or winding up
of the corporation, the holders of shares of the Preferred Stock (of all series)
then outstanding shall be entitled to be paid in full, out of the net assets of
the corporation, the par value of their shares plus an amount equal to the
accrued dividends on such shares, and no more, before any amount shall be paid
or distributed to the holders of shares of the Common Stock. In the event of the
voluntary liquidation, dissolution or winding up of the corporation, the holders
of shares of the 5% Series, the 4.65% Series and the 4.28% Series then
outstanding shall be entitled to be paid in full, out of the net assets of the
corporation, the then effective respective redemption prices of such shares
(including an amount equal to the accrued dividends on such shares), and no
more, before any amount shall be paid or distributed to the holders of shares of
the Common Stock. After payment in full to the holders of all shares of the
Preferred Stock (of all series) and of all other shares of stock, if any, having
priority over the Common Stock as to assets, then outstanding, of the amounts to
which they are respectively entitled as herein provided, the remaining assets
and profits shall be divided among and paid or distributed to the holders of
shares of Common Stock.
(3) The corporation, on the sole authority of its Board of Directors, shall
have the right at any time or from time to time to redeem and retire all or any
part of the Preferred Stock, or all or any part of the shares of one or more
series of the Preferred Stock, upon and by the payment to the holders of the
shares to be redeemed, or upon or by setting aside as hereinafter provided for
the benefit of such holders, of the redemption price or prices fixed for the
shares to be redeemed, which redemption price (a) in the case of shares of the
5% Series shall be $109 per share plus accrued dividends to the date of
redemption, (b) in the case of shares of the 4.65% Series shall be $103.75 per
share if the date of redemption is on or prior to July 1, 1959, and $102.75 per
share if the date of redemption is subsequent to July 1, 1959, plus, in each
case, accrued dividends to the date of redemption, and (c) in the case of shares
of the 4.28% Series shall be $105.904 per share if the date of redemption is
prior to January 1, 1960, $104.904 per share if the date of redemption is on or
subsequent to January 1, 1960, and prior to January 1, 1965, and $103.904 per
share if the date of redemption is on or subsequent to January 1, 1965, plus, in
each case, accrued dividends to the date of redemption; PROVIDED that not later
than on the thirtieth day prior to the date fixed for such redemption, notice of
the intention of the corporation to redeem such shares, specifying the shares to
be redeemed and the date and place of redemption, shall be given to the holders
of record of the shares so to be redeemed, in the discretion of the Board of
Directors, either by publication in a newspaper of general circulation published
in the City of Chicago, Illinois, and in a newspaper of general circulation in
the City of New York, New York, or by depositing a copy of such notice in a
United States post office or mail box at any place in the United States
addressed to each holder of record of the shares to be redeemed at his address
as the same appears upon the records of the corporation; AND, PROVIDED FURTHER,
that if such notice is given by mail, unintentional omissions or errors in names
or addresses, or other defects in such mailing, shall not impair the validity of
the notice of, or proceedings for, such redemption. In every case of the
redemption of less than all the outstanding shares of any particular series of
Preferred Stock, the shares of such series to be redeemed shall be chosen by
proration (so far as may be without the issuance of fractional shares), by lot
or in such other equitable manner as may be prescribed by resolution of the
Board of Directors. The corporation may deposit, with a bank or trust company,
which shall be named in the notice of redemption, shall be located in the City
of New York, New York, or in Chicago, Illinois, and shall have capital, surplus
and undivided profits of at least $1,000,000, the aggregate redemption price of
the shares to be redeemed, in trust for the payment thereof on or before the
redemption date to or upon the order of the holders of such shares, upon
surrender of the certificates for such shares. Such deposit in trust may, at the
option of the corporation, be upon terms whereby in case the holder of any
shares of Preferred Stock called for redemption shall not, within ten years
after the date fixed for redemption of such shares, claim the amount so
deposited for the payment of the redemption price of such shares, such bank or
trust company shall on demand, when requested by resolution of the Board of
Directors of the corporation or its successor, pay to or upon the written order
of the corporation or its successor the amount so deposited, and thereupon such
bank or trust company shall be released from any and all further liability with
respect to the payment of such redemption price and the holder of said shares
shall be entitled to look only to the corporation or its successor for the
payment thereof. Upon the giving of notice of redemption and upon the deposit of
the redemption price, as aforesaid, or, if no such deposit is made, upon the
redemption date (unless the corporation defaults in making payment of the
redemption price as set forth in such notice), such holders shall cease to be
stockholders with respect to said shares, and from and after the making of said
deposit and the giving of said notice, or, if no such deposit is made, after the
redemption date (the corporation not having defaulted in making payment of the
redemption price as set forth in such notice), said shares shall no longer be
transferable on the books of the corporation, and said holders shall have no
interest in or claim against the corporation or its successor with respect to
said shares, but shall be entitled only to receive said moneys on the date fixed
for redemption, as aforesaid, from said bank or trust company, or from the
corporation or its successor, without interest thereon, upon surrender of the
certificates for said shares as aforesaid. All shares of the Preferred Stock so
redeemed shall be cancelled and retired.
The term "accrued dividends," as used in this Article FOURTH, shall be
deemed to mean, in respect of any share of the Preferred Stock (of any series)
as of any given date, the amount of dividends payable on such share, computed at
the annual dividend rate stated in the designation of such share from the date
on which dividends thereon became cumulative to and including such given date,
less the aggregate amount of all dividends which have been paid, or which have
been declared and set apart for payment, on such share. Accumulations of
dividends shall not bear interest.
Nothing herein contained shall limit any legal right of the corporation to
purchase or otherwise acquire any shares of the Preferred Stock of any series;
PROVIDED that the corporation shall not redeem, purchase or otherwise acquire
less than all the outstanding shares of the Preferred Stock if at the time of
such redemption, purchase or other acquisition dividends payable on the
Preferred Stock shall be in default in whole or in part unless, prior to or
concurrently with such redemption, purchase or other acquisition, all such
defaults in dividends shall have been cured, or unless such redemption, purchase
or other acquisition shall have been ordered, approved or permitted by the
Securities and Exchange Commission or any successor commission under the Public
Utility Holding Company Act of 1935. All shares of the Preferred Stock so
redeemed, purchased or acquired shall be cancelled and retired.
(4) So long as any shares of the Preferred Stock shall be outstanding, the
corporation shall not, without the affirmative vote or the consent of the record
holders of at least two-thirds of the total number of shares of the Preferred
Stock (of all series) at the time outstanding:
(a) create or authorize, by amendment to the Certificate of
Incorporation or otherwise, shares of any class of stock ranking prior to
the Preferred Stock as to dividends or assets or any security convertible
into shares of such prior ranking stock, OR issue any of such prior ranking
stock or any such convertible security after the expiration of one year
from such vote or consent of the holders of the shares of the Preferred
Stock; or
(b) change, alter or repeal, by amendment to the Certificate of
Incorporation or otherwise, any of the powers, preferences or rights of the
holders of the shares of the Preferred Stock so as to affect adversely any
of such powers, preferences or rights; PROVIDED that (i) any increase or
decrease in the authorized amount of the Preferred Stock or the creation,
or any increase or decrease in the authorized amount, of any class of stock
ranking on a parity with the Preferred Stock as to dividends or assets
shall not be deemed to affect adversely the powers, preferences or rights
of the holders of the shares of the Preferred Stock and (ii) if any such
change, alteration or repeal would affect adversely the powers, preferences
or rights of the holders of shares of one or more, but less than all, of
the series of the Preferred Stock at the time outstanding, the vote or
consent only of the record holders of at least two-thirds of the total
number of outstanding shares of the series so adversely affected shall be
required.
No vote or consent of the holders of the shares of the Preferred Stock
shall be required in respect of any transaction enumerated in this Paragraph (4)
if, at or prior to the time when such transaction is to take effect, provision
is made for the redemption or other retirement of all outstanding shares of the
Preferred Stock the vote or consent of which would otherwise be required by this
Paragraph (4).
No provision contained in this Paragraph (4) is intended or shall be
construed to relieve the corporation from compliance with any applicable
statutory provision requiring the vote or consent of the holders of a greater
number of the outstanding shares of the Preferred Stock.
(5) So long as any shares of the Preferred Stock shall be outstanding, the
corporation shall not, without the affirmative vote or consent of the record
holders of a majority of the total number of shares of the Preferred Stock (of
all series) at the time outstanding:
(a) merge or consolidate with or into any other corporation or
corporations, or sell or otherwise dispose of all or substantially all of
the assets of the corporation, unless such merger, consolidation, sale or
other disposition, or the exchange, issuance or assumption of all
securities to be exchanged, issued or assumed in connection with any such
merger, consolidation, sale or other disposition, shall have been ordered,
approved or permitted by the Securities and Exchange Commission or any
successor commission under the Public Utility Holding Company Act of 1935;
PROVIDED that the provisions of this subparagraph (a) shall not apply to
the purchase or other acquisition by the corporation of the franchises or
assets of another corporation in any manner not involving a statutory
merger or consolidation; or
(b) issue any shares of the Preferred Stock, including the reissuance
of any shares thereof reacquired by the corporation, or shares of any other
stock ranking on a parity with the Preferred Stock as to dividends or
assets, for any purpose OTHER THAN [in exchange for or to effect the
redemption or other retirement of not less than] an equal par amount or
stated value of the Preferred Stock or of stock ranking prior to or on a
parity with the Preferred Stock as to dividends or assets at the time
outstanding, UNLESS (1) the gross income of the corporation (after
deducting all taxes, including taxes based on income, and determined as
hereinafter provided) for twelve consecutive calendar months ending within
the fifteen calendar months immediately preceding the issuance of the
shares to be issued shall have been at least one and one-half times the sum
of (i) the annual interest charge on all indebtedness of the corporation
which will be outstanding immediately after the issuance of the shares to
be issued and (ii) the annual dividend requirement on all shares of the
Preferred Stock and of any other stock ranking prior to or on a parity with
the Preferred Stock as to dividends or assets (including the shares to be
issued) which will be outstanding immediately after the issuance of the
shares to be issued; AND (2) the common stock equity of the corporation,
computed as provided in Paragraph (6) hereof, shall be not less than the
aggregate amount payable in the event of the involuntary liquidation,
dissolution or winding up of the corporation in respect of all shares of
the Preferred Stock and of any other stock ranking prior to or on a parity
with the Preferred Stock as to dividends or assets which will be
outstanding immediately after the issuance of the shares to be issued.
Gross income shall be determined in accordance with such system of accounts
as may be prescribed by regulatory authorities having jurisdiction in the
premises or, in the absence of any such system of accounts, in accordance with
generally accepted accounting principles, provided that in computing gross
income of the corporation for the purposes of subparagraph (b) of this Paragraph
(5), (i) in the event any additional property or assets are to be acquired by
the corporation by the issuance, or the application of any of the proceeds from
the issuance, of any shares of the Preferred Stock or of stock ranking on a
parity with or junior to the Preferred Stock as to dividends or assets, to be
then issued, the gross income of the property or assets to be so acquired
(computed on the same basis as the gross income of the corporation as herein
provided and for the same period) may be included, on a pro forma basis, in
making such computation of gross income of the corporation, and (ii) the amounts
to be deducted from gross income as charges for depreciation, retirements,
renewals and replacements and/or amortization shall not be less in the aggregate
than an amount equal to 9% (or such other percentage as may upon application by
the corporation be approved by the Securities and Exchange Commission, or any
successor authority, under the Public Utility Holding Company Act of 1935) of
the arithmetical average of the amount of depreciable property of the
corporation at the beginning and the amount thereof at the end, of such 12-month
period, in plant accounts of the corporation, with respect to which bonds may at
the time be authenticated under any indenture securing first mortgage bonds of
the corporation, determined in accordance with generally accepted principles of
accounting, and provided that amounts included in plant acquisition adjustment
account, or accounts of similar purpose, shall not be included in the amount of
such property if adequate provision for the amortization of such amounts is made
by current charges to income or surplus. In computing the annual interest charge
and the annual dividend requirement referred to in said subparagraph (b), there
shall be excluded the interest charges and dividend requirements on all
indebtedness and shares of stock, respectively, which are to be redeemed or
otherwise retired by the issuance, or the application of any of the proceeds
from the issuance, of any shares of the Preferred Stock or of stock ranking
prior to or on a parity with the Preferred Stock at to dividends or assets, then
to be issued.
If for the purpose of meeting the requirements of clause (2) of
subparagraph (b) of this Paragraph (5), it shall have been necessary to take
into consideration any earned surplus of the corporation, the corporation shall
not thereafter pay any dividends on common stock (as defined in Paragraph (6) of
this Article Fourth) in an amount which would result in reducing the common
stock equity of the corporation, as defined in said Paragraph (6), to an amount
less than the aggregate amount payable in the event of the involuntary
liquidation, dissolution or winding up of the corporation in respect of all
shares of the Preferred Stock and of stock ranking prior to or on a parity with
the Preferred Stock as to dividends or assets at the time outstanding.
No vote or consent of the holders of the Preferred Stock shall be required
in respect of any transaction enumerated in this Paragraph (5) if, at or prior
to the time when such transaction is to take effect, provision is made for the
redemption or other retirement of all outstanding shares of the Preferred Stock
the vote or consent of which would otherwise be required by this Paragraph (5).
No provision contained in this Paragraph (5) is intended or shall be
construed to relieve the corporation from compliance with any applicable
statutory provision requiring the vote or consent of the holders of a greater
number of the outstanding shares of the Preferred Stock.
(6) So long as any shares of the Preferred Stock shall be outstanding, the
corporation shall not declare or pay any dividends on common stock of the
corporation (as herein defined) EXCEPT AS FOLLOWS:
(a) if and so long as the common stock equity (as herein defined) of
the corporation on the last day of a calendar month immediately preceding
the date on which a dividend on common stock is proposed to be declared is,
or as a result of the payment of such dividend would become, less than 20%
of total capitalization of the corporation (as herein defined), the
corporation shall not (except as hereinafter provided) declare any such
dividend in an amount which, together with all other dividends on common
stock paid within the year ending with and including the date on which such
dividend is proposed to be payable, exceeds 50% of the net income of the
corporation available for dividends on common stock (determined as herein
provided) for twelve consecutive calendar months ending on the last day of
the calendar month immediately preceding the month in which such dividend
is proposed to be declared; PROVIDED that if any dividends (or additional
dividends) on common stock could have been declared under the foregoing
limitation in any previous year or years, but were not declared, then such
dividend proposed to be paid may exceed 50% of the above specified net
income of the corporation by a total amount equal to the aggregate amount
of all dividends on common stock that could have been so declared but were
not declared; and
(b) if and so long as the common stock equity on the last day of a
calendar month immediately preceding the date on which a dividend on common
stock is proposed to be declared is, or as a result of the payment of such
dividend would become, less than 25% but not less than 20% of total
capitalization, the corporation shall not (except as hereinafter provided)
declare any such dividend in an amount which, together with all other
dividends on common stock paid within the year ending with and including
the date on which such dividend is proposed to be payable, exceeds 75% of
the net income of the corporation available for dividends on common stock
for twelve consecutive calendar months ending on the last day of the
calendar month immediately preceding the month in which such dividend is
proposed to be declared; PROVIDED that if any dividends (or additional
dividends) on common stock could have been declared under the foregoing
limitation of this paragraph in any previous year or years, but were not
declared, then such dividend proposed to be paid may exceed 75% of the
above specified net income of the corporation by a total amount equal to
the aggregate amount of all dividends on common stock that could have been
so declared but were not declared; and
(c) at any time when the common stock equity is 25% or more of total
capitalization, the corporation shall not declare dividends on common stock
which would reduce the common stock equity below 25% of total
capitalization, EXCEPT to the extent provided or permitted in subparagraphs
(a) and (b) above.
"Dividends on common stock" of the corporation shall mean and include all
dividends on common stock (other than dividends payable solely in shares of
Common Stock or applied by the recipient to the purchase from the corporation of
shares of its Common Stock), distributions on, and purchases or other
acquisitions for value of, shares of Common Stock of the corporation or other
stock of the corporation, if any, ranking junior to the Preferred Stock as to
dividends or assets.
"Common stock equity" of the corporation shall mean the aggregate of (a)
the par value of, or stated capital represented by, the outstanding shares of
all stock of the corporation ranking junior to the Preferred Stock as to
dividends or assets, and all premiums in respect of such junior ranking stock,
as carried on the books of the corporation, and (b) the amount of all surplus
accounts of the corporation, after deducting from such aggregate (1) the excess,
if any, of the aggregate amount payable in the event of the involuntary
liquidation, dissolution or winding up of the corporation in respect of all
outstanding shares of stock of the corporation ranking prior to the Common Stock
as to dividends or assets, over the aggregate par value of, or stated capital
represented by, such outstanding shares of prior ranking stock and any premiums
thereon, (2) any amounts recorded on the books of the corporation (estimated, if
not known) for used or useful utility plant and other property in excess of the
original cost of such plant or property, (3) any intangible items (such as
unamortized debt discount and expense, capital stock discount and expense) set
forth on the asset side of the balance sheet of the corporation as a result of
accounting convention, (4) the excess, if any, for the period from February 1,
1940, to December 31, 1976, of an amount equal to 15% of the gross operating
revenues derived by the corporation from the operation of its properties for
such period (after excluding or deducting from such revenues all non-operating
income, revenues derived directly from properties leased to the corporation, and
the aggregate cost of electric energy and gas purchased for exchange or resale),
over the aggregate amount charged or provided by the corporation on its books
for maintenance, repairs and depreciation of property for such period; provided
that no deduction shall be made or be required to be made for or in respect of
any items or amounts referred to in clauses (2) and (3) of this paragraph in the
event such items or amounts are being amortized or are provided for, or are
being provided for, by reserves, and (5) the excess, if any, for the period
beginning January 1, 1977, to the end of a month ending within ninety days next
preceding the date as of which common stock equity is being determined, of an
aggregate amount equal to 2.9% annually (or such other percentage as may upon
application by the corporation be approved by the Securities and Exchange
Commission, or any successor authority, under the Public Utility Holding Company
Act of 1935) of the arithmetical average of the amount of depreciable property
of the corporation at the beginning, and the amount thereof at the end, of each
calendar year and portion thereof contained in such period, in plant accounts of
the corporation, with respect to which bonds may at the time be authenticated
under any indenture securing first mortgage bonds of the corporation, determined
in accordance with generally accepted principles of accounting (excluding
amounts included in plant acquisition adjustment account, or accounts of similar
purpose, if adequate provision for the amortization of such amounts is made by
current charges to income or surplus), over the aggregate amount charged or
provided by the corporation on its books as charges for depreciation,
retirements, renewals and replacements and/or amortization for such period.
"Total capitalization" of the corporation shall mean the aggregate of (i)
the principal amount of all outstanding bonds, debentures, notes and other
securities representing indebtedness (whether secured or unsecured) of the
corporation maturing more than twelve months after the date as of which total
capitalization is being determined, and (ii) the par value of, or stated capital
represented by, the outstanding shares of the capital stock of all classes of
the corporation, all premiums in respect of such stock, as carried on the books
of the corporation, and the amount of all surplus accounts of the corporation,
AFTER DEDUCTING from such aggregate any amounts required to be deducted, in the
determination of common stock equity, pursuant to the provisions of clauses (2)
and (3) of the foregoing definition of "common stock equity."
"Net income of the corporation available for dividends on common stock"
shall be determined by deducting from the sum of the total operating revenues
and other income of the corporation for any given period, all operating expenses
for such period (including maintenance, repairs and depreciation, taxes based on
income and all other taxes, all proper accruals, interest charges, amortization
charges, other proper income deductions and dividends paid or accrued on
outstanding shares of stock of the corporation ranking prior to the Common Stock
as to dividends, for such period), all as determined in accordance with such
system of accounts as may be prescribed by regulatory authorities having
jurisdiction in the premises or, in the absence of any such system of accounts,
in accordance with generally accepted accounting principles.
(7) The voting rights of the holders of shares of the Preferred Stock and
of the Common Stock of the corporation shall be as follows:
(a) No holder of shares of the Preferred Stock shall be entitled to
vote, at any meeting of stockholders of the corporation, for the election
of directors or in respect of any other matter, EXCEPT as expressly
provided in Paragraph (4) or (5) of this Article Fourth or in this
Paragraph (7) AND EXCEPT as may be required by law. In such excepted cases,
each record holder of outstanding shares of the Preferred Stock shall have
one (1) vote for each share of the Preferred Stock held by him. Each record
holder of outstanding shares of Common Stock shall, at all meetings of
stockholders of the corporation, have one (1) vote for each share of Common
Stock held by him, EXCEPT as otherwise provided in this Paragraph (7).
(b) If and when dividends payable on the Preferred Stock shall be in
default in an amount equivalent to four full quarter-yearly dividends or
more per share on all shares of the Preferred Stock then outstanding, and
thereafter until all dividends on such Preferred Stock in default shall
have been paid, the record holders of the shares of the Preferred Stock,
voting separately as one class, shall be entitled, at each meeting of the
shareholders at which directors are elected, to elect the smallest number
of directors necessary to constitute a majority of the full Board of
Directors of the corporation, and EXCEPT as provided in the following
subparagraph (c), the record holders of the shares of Common Stock, voting
separately as a class, shall be entitled at any such meeting to elect the
remaining directors of the corporation. The term of office of each director
of the corporation shall terminate upon the election of his successor. At
each election of directors by a class vote pursuant to the provisions of
this paragraph, the class first electing the directors which it is entitled
to elect shall name the directors who are to be succeeded by the directors
then elected by such class, whereupon the term of office of the directors
so named shall terminate. The term of office of the directors not so named
shall terminate upon the election by the other class of the directors which
it is entitled to elect.
(c) If and when all dividends then in default on the Preferred Stock
then outstanding shall be paid (and such dividends shall be paid, or
declared and set apart for payment, out of any funds legally available
therefor, as soon as reasonably practicable), the holders of the shares of
the Preferred Stock shall thereupon be divested of the special right with
respect to the election of directors provided for in subparagraph (b) of
this Paragraph (7), and the voting power of the holders of the shares of
the Preferred Stock and the Common Stock shall revert to the status
existing before the first dividend payment date on which dividends on the
Preferred Stock were not paid in full, but always subject to the same
provisions for vesting such special rights in the record holders of shares
of the Preferred Stock in case of further like default or defaults in the
payment of dividends thereon as described in said subparagraph (b).
Dividends shall be deemed to have been paid, as that term is used in this
subparagraph (c), whenever such dividends shall have been declared and
paid, or declared and provision made for the payment thereof, or whenever
there shall be (i) funds available for the payment thereof and (ii)
sufficient surplus or net profits of the corporation legally available for
the payment thereof which shall have accrued since the date of the default
giving rise to such special voting right; and thereupon the holders of a
majority of the shares of the Common Stock shall have the right to elect
directors to succeed those elected by the holders of the Preferred Stock,
PROVIDED that in the event all dividends in default on the Preferred Stock
at the time of the election of such successor directors shall not actually
be paid or declared and set apart for payment within thirty days after such
election, such successor directors so elected shall resign forthwith and
the directors elected by the holders of the shares of the Preferred Stock
shall forthwith be reelected to fill the vacancies so created and shall
assume office as directors.
(d) In case of any vacancy in the Board of Directors occurring among
the directors elected by the holders of the shares of the Preferred Stock,
voting separately as a class, pursuant to subparagraph (b) of this
Paragraph (7), the remaining directors elected by such holders, by the
affirmative vote of a majority thereof, or the remaining director so
elected if there be but one, may elect a successor or successors to hold
office for the unexpired term or terms of the director or directors whose
place or places shall be vacant. Likewise, in case of any vacancy in the
Board of Directors occurring among the directors elected by the holders of
the shares of the Common Stock, voting separately as a class, pursuant to
subparagraph (b) of this Paragraph (7), the remaining directors elected by
such holders, by the affirmative vote of a majority thereof, or the
remaining director so elected if there be but one, may elect a successor or
successors to hold office for the unexpired term or terms of the director
or directors whose place or places shall be vacant.
(e) Whenever the right shall have accrued to the holders of the shares
of the Preferred Stock, voting separately as a class, to elect directors,
pursuant to subparagraph (b) of this Paragraph (7), it shall be the duty of
the President, a Vice President or the Secretary of the corporation
forthwith to call and cause notice to be given to the stockholders of the
corporation entitled to vote of a meeting to be held, at such time as the
officers of the corporation may fix, for the purpose of electing directors,
provided that such meeting shall be held not less than 45 days, nor more
than 90 days, after the accrual of such right to elect directors. At all
meetings of stockholders at which directors are elected during such times
as the holders of shares of the Preferred Stock shall have the special
right, voting separately as a class, to elect directors pursuant to
subparagraph (b) of this Paragraph (7), the presence in person or by proxy
of the holders of a majority of the outstanding shares of the Common Stock
shall be required to constitute a quorum of such class for the election of
directors, and, except as hereinafter stated, the presence in person or by
proxy of the holders of a majority of the outstanding shares of all series
of the Preferred Stock shall be required to constitute a quorum of such
class for the election of directors; PROVIDED, HOWEVER, that (i) the
absence of a quorum of the holders of stock of either such class shall not
prevent the election at any such meeting, or adjournment thereof, of
directors by the other such class if the necessary quorum of the holders of
stock of such class is present in person or by proxy at such meeting, and
(ii) in the absence of a quorum of the holders of stock of either such
class, a majority of those holders of the stock of such class who are
present in person or by proxy shall have power to adjourn the election of
the directors to be elected by such class, and (iii) at any such adjourned
meeting, the presence in person or by proxy of the holders of not less than
35% of the outstanding shares of the Preferred Stock shall constitute a
quorum of the Preferred Stock for the election of directors by such class,
and (iv) if at any such adjourned meeting the holders of at least 35% of
the outstanding shares of the Preferred Stock shall not be present in
person or by proxy, the directors to be elected by such class shall be
elected by vote of the holders of not less than a majority of the
outstanding shares of Common Stock. Not less than thirty days' notice in
writing of any such adjourned meeting shall, upon request, be given by the
Company at its expense to the record holders of such class or classes.
(f) In consideration of the issue, sale or delivery by the
corporation, and the purchase or other acquisition by the holders thereof,
of shares of the capital stock (both preferred and common) of the
corporation, each and every present and future holder of shares of the
capital stock (both preferred and common) of the corporation shall be
conclusively deemed, by purchasing, acquiring or holding such shares, to
have expressly consented to all and singular the terms and provisions of
this Paragraph (7) and to have agreed that the voting rights of such
holder, and the restrictions and qualifications thereof, shall be as set
forth in this Paragraph (7).
(g) Except when some mandatory provision of law shall be controlling
and except as otherwise provided in Paragraph (4) of this Article Fourth,
no particular series of the Preferred Stock shall be entitled to vote as a
separate series or class on any matter and all shares of the Preferred
Stock of all series shall be deemed to constitute but one class for any
purpose for which a vote of the stockholders of the corporation by classes
may now or hereafter be required.
(8) The rights of the holders of shares of the Preferred Stock shall not be
deemed to be adversely affected by any increase in the number of authorized or
outstanding shares of Common Stock, or the creation and issue of shares of any
class of stock subordinate in all respects to the rights of the Preferred Stock.
(9) No share of stock or evidence of indebtedness shall be deemed to be
"outstanding," as that term is used in this Certificate of Incorporation (as
amended), if prior to or concurrently with the event in reference to which a
determination as to the amount thereof outstanding is to be made, the requisite
funds for the redemption, payment or other retirement thereof shall be deposited
in trust for that purpose and, in the case of redemption, the requisite notice
for the redemption thereof shall be given or the depositary of such funds shall
be irrevocably authorized and directed to give or complete such notice of
redemption.
(10) No holder of shares of stock of any class of the corporation shall be
entitled, as a matter of right, to subscribe for, purchase or receive any shares
of stock of any class of the corporation, or any rights or options of the
corporation which it may issue or sell, whether out of the number of shares now
authorized or hereafter authorized. Nor shall any holder of shares of stock of
any class of the corporation be entitled, as a matter of right, to subscribe
for, purchase or receive any shares of stock or bonds, debentures or other
obligations which the corporation may issue or sell, which shall be convertible
into or exchangeable for stock of any class of the corporation, or to which
shall be attached or appertain any warrant or warrants (or other instrument or
instruments) which shall confer upon the holder or owner the right to subscribe
for or purchase from the corporation any shares of its capital stock of any
class; and all such additional issues of shares of stock of any class, or of
rights or options, or of bonds, debentures or other obligations convertible into
or exchangeable for stock or to which such warrants or other instruments shall
be attached or appertain, may be issued and disposed of as determined by the
Board of Directors to such persons (whether stockholders or not), at such times,
for such consideration and upon such terms, permitted by the laws of Delaware,
as the Board of Directors in its absolute discretion may deem advisable.
(11) The corporation reserves the right to increase or decrease its
authorized capital stock or any class thereof, or any series of any such class,
or to reclassify the same, and to amend, alter, change or repeal any provision
contained in the Certificate of Incorporation (as amended) of the corporation,
or in this amendment or any future amendment to said Certificate, in the manner
now or hereafter prescribed by law, BUT SUBJECT to such conditions and
limitations as are hereinbefore prescribed; and all rights granted to or
conferred upon stockholders in the Certificate of Incorporation (as amended) of
the corporation, or in this amendment or any future amendment to said
Certificate, are granted and conferred subject to this reservation.
(12) Neither a consolidation or merger of the corporation with or into any
other corporation, nor a merger of any other corporation into the corporation,
nor the purchase or other acquisition, redemption or other retirement by the
corporation of all or any part of the outstanding shares of its Preferred Stock
of any class, shall be deemed to be a distribution of assets, or a liquidation,
dissolution or winding up, of the corporation within the meaning of any of the
provisions of the Certificate of Incorporation (as amended) of the corporation,
as then in effect.
(13) The amount of capital stock with which the corporation will commence
business is the sum of Five Thousand Dollars ($5,000.00), being Fifty (50)
shares of the Common Stock of the corporation.
FIFTH. The corporation is to have perpetual existence.
SIXTH. The private property of the stockholders shall not
be subject to the payment of corporate debts to any extent
whatever.
SEVENTH. The number of Directors of the corporation shall be fixed from
time to time by the By-laws, and such number may be increased or decreased in
such manner as may be provided in the By-laws. In case of any increase in the
number of Directors, the additional Directors shall be elected, as may be
provided by the By-laws, by the Directors then in office, or by the stockholders
at an annual or special meeting. In case of any vacancy in the Board of
Directors through death, resignation, disqualification or other cause, the
remaining Directors may elect a successor to hold office for the unexpired
portion of the term of the Director whose place shall be vacant, and until the
election of his successor.
Subject always to By-laws made by the stockholders the Board of Directors
may make By-laws from time to time, and may alter, amend or repeal such By-laws,
but any By-laws made by the Board of Directors may be altered, amended or
repealed by the stockholders, at any annual meeting, or at any special meeting,
provided notice of such proposed alteration, amendment or repeal shall have been
included in the notice of such special meeting.
With the consent of the holders of two-thirds in amount of each class of
stock of the corporation at the time outstanding, such consent being expressed
in writing or by a vote at any special meeting called for such purpose, the
Directors shall have authority to dispose, in any manner, of the whole property
of the corporation, including the franchises and good will thereof, and to
receive any form of consideration therefor, including bonds, debentures or
obligations of, or shares of stock in, any corporation, or any other or
different form of consideration.
The Board of Directors shall have power to fix and to determine, and to
vary, the amount of the working capital of the Company, and to direct and
determine the use and disposition of any surplus or net profits over and above
the capital stock paid in; and to determine the date or dates for the
declaration and payment of dividends.
The Board of Directors, by the affirmative vote of a majority of the whole
Board, may appoint from the Directors an Executive Committee, of which a
majority shall constitute a quorum, and, to such extent as shall be provided in
the By-laws or in the resolution appointing them, such Committee shall have and
may exercise all or any of the powers of the Board of Directors, including the
power to cause the seal of the corporation to be affixed to all papers that may
require it. The Board of Directors, by the affirmative vote of a majority of the
whole Board, may appoint any other standing committees, and such standing
committees shall have and may exercise such powers as shall be authorized by the
By-laws or by the resolution appointing them. The Board of Directors may appoint
not only other officers of the Company, but also one or more Vice Presidents,
one or more Assistant Treasurers and one or more Assistant Secretaries, and, to
the extent provided in the By-laws or in the resolution appointing them, the
persons so appointed, respectively, shall have and may exercise all the powers
of the President, Secretary and Treasurer, respectively. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the whole Board. Any other officer or employee
of the Company may be removed at any time by vote of the Board of Directors, or
by any committee or superior officer upon whom such power of removal may be
conferred by the By-laws or by resolution of the Board.
Subject to the provisions of the statute under which this corporation is
organized, the corporation may keep its books outside of the state.
The Board of Directors shall have power from time to time to determine
whether, and to what extent, and at what times and places, and under what
conditions and regulations, the accounts and books of the corporation (other
than the stock ledger) or any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any account or
book or document of the corporation, except as conferred by statute, or
authorized by the Directors, or by a resolution of the stockholders.
It is the intention that the objects, purposes and powers specified in
Section numbered "THIRD" hereof shall, except where otherwise specified in said
Section, be in nowise limited or restricted by reference to or inference from
the terms of any other section or paragraph in this Restated Certificate, but
that the objects, purposes and powers specified in said Section numbered
"THIRD", and in each of the clauses or paragraphs in this Charter or Restated
Certificate, shall be regarded as independent objects, purposes and powers.
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
SOUTHWESTERN ELECTRIC POWER COMPANY
Southwestern Electric Power Company, a Delaware corporation (the
"corporation"), certifies as follows:
1. In accordance with the provisions of Section 242 of Title 8 of
the Delaware Code, the Board of Directors and the Preferred and Common
Stockholders of the corporation have duly adopted the following amendments to
the corporation's Restated Certificate of Incorporation, as heretofore amended
(the "Certificate"):
2. Paragraph (5), subsection (b), of Article "Fourth" of the
Certificate is further amended to read as follows:
"(b) issue any shares of the Preferred Stock, including the
reissuance of any shares thereof reacquired by the corporation, or shares
of any other stock ranking on a parity with the Preferred Stock as to
dividends or assets, for any purpose OTHER THAN [in exchange for or to
effect the redemption or other retirement of not less than] an equal par
amount or stated value of the Preferred Stock or of stock ranking prior
to or on a parity with the Preferred Stock as to dividends or assets at
the time outstanding, UNLESS (1) the gross income of the corporation
(after deducting all taxes, including taxes based on income, and
determined as hereinafter provided) for twelve consecutive calendar
months ending within the fifteen calendar months immediately preceding
the issuance of the shares to be issued shall have been at least one and
one-half times the sum of (i) the annual interest charge on all
indebtedness of the corporation which will be outstanding immediately
after the issuance of the shares to be issued and (ii) the annual
dividend requirement on all shares of the Preferred Stock and of any
other stock ranking prior to or on a parity with the Preferred Stock as
to dividends or assets (including the shares to be issued) which will be
outstanding immediately after the issuance of the shares to be issued;
AND (2) the common stock equity of the corporation, computed as provided
in Paragraph (6) hereof, shall be not less than the aggregate amount
payable in the event of the involuntary liquidation, dissolution or
winding up of the corporation in respect of all shares of the Preferred
Stock and of any other stock ranking prior to or on a parity with the
Preferred Stock as to dividends or assets which will be outstanding
immediately after the issuance of the shares to be issued."
3. Paragraph 5, subsection (c), of Article "Fourth" of the
Certificate is further amended by deleting Paragraph 5, subsection (c) in its
entirety.
IN WITNESS WHEREOF, Southwestern Electric Power Company has caused
this Certificate of Amendment to be signed by Michael D. Smith, its President,
and its corporate seal to be hereunto affixed and attested by Marilyn S.
Kirkland, its Secretary, this 2nd day of May, 1997.
SOUTHWESTERN ELECTRIC POWER COMPANY
By /S/ MICHAEL D. SMITH
President
(CORPORATE SEAL)
ATTEST:
/S/ MARILYN S. KIRKLAND
Secretary
THE STATE OF TEXAS
SECRETARY OF STATE
The undersigned, as Secretary of State of the State of Texas, HEREBY
CERTIFIES that the attached is a true and correct copy of the following
described instruments on file in this office:
WEST TEXAS UTILITIES COMPANY
RESTATED ARTICLES OF INCORPORATION MAY 25, 1977
ARTICLES OF AMENDMENT MAY 10, 1979
CHANGE OF REGISTERED OFFICE AND/OR AGENT OCTOBER 19, 1979
ARTICLES OF AMENDMENT OCTOBER 15, 1982
STATEMENT OF RESOLUTION JUNE 9, 1983
ARTICLES OF AMENDMENT MARCH 26, 1984
STATEMENT OF RESOLUTION MARCH 11, 1986
STATEMENT OF CANCELLATION OF REDEEMABLE SHARES JUNE 15, 1987
ARTICLES OF AMENDMENT MARCH 8, 1988
STATEMENT OF CANCELLATION OF REDEMABLE SHARES AUGUST 31, 1988
CHANGE OF REGISTERED OFFICE AND/OR AGENT MAY 6, 1992
STATEMENT OF CANCELLATION OF REDEEMABLE SHARES AUGUST 12, 1993
STATEMENT OF CANCELLATION OF REDEEMABLE SHARES SEPTEMBER 6, 1994
IN TESTIMONY WHEREOF, I have hereunto
signed my name officially and caused to be
impressed hereon the Seal of State at my office
in the City of Austin, on February 17, 1995.
Antonio O. Garza, Jr
Secretary of State
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
WEST TEXAS UTILITIES COMPANY
West Texas Utilities Company (the "corporation"), a corporation
organized and existing by virtue of the laws of the State of Texas,
executes these Articles of Amendment to its Restated Articles of Incorpora-
tion pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act:
1. The name of the corporation is West Texas Utilities
Company.
2. Article VI of the corporation's Restated Articles of
Incorporation is hereby amended by changing the first sentence of said
Article VI to read as follows:
The total number of authorized shares of capital
stock of the corporation is 3,110,000 shares,
divided into two classes, namely: (1) Preferred
Stock, consisting of 310,000 shares of the par
value of $100 each, of which 60,000 shares shall
be designated and known as the "4.40% Cumulative
Preferred Stock" and shall constitute a series of
the Preferred Stock and (2) Common Stock, con-
sisting of 2,800,000 shares of the par value of
$22 each.
3. Paragraph (1) of said Article VI is hereby amended by
deleting therefrom the sentence: "All shares of the Preferred Stock
bearing the same designation at any time outstanding shall constitute
one series of Preferred Stock; and all shares of any one designation or
series of Preferred Stock shall be alike in all respects."
4. The foregoing amendments have been effected in conformity
with the provisions of the Texas Business Corporation Act and the corpora-
tion's Restated Articles of Incorporation and were duly approved and
adopted on May 7, 1979, by the shareholders of the corporation entitled
to vote thereon.
5. The number of shares of stock of the corporation outstand-
ing at the time of the adoption of said amendments was 2,800,000 shares
of Common Stock and 60,000 shares of Preferred Stock. All of such shares
were entitled to vote on the amendment referred to in Item 2 of these
Articles; and, in addition, the 60,000 shares of Preferred Stock were
entitled to vote on said amendment as a class; only the shares of Common
Stock were entitled to vote on the amendments referred to in Item 3 of
these Articles. All of the shares of Common Stock voted for all amend-
ments; 42,503 shares of Preferred Stock voted for the amendment set
forth in paragraph 2 of these Articles and 4,799 shares of Preferred
Stock voted against such amendment.
Dated: May 9, 1979
WEST TEXAS UTILITIES COMPANY
BY DURWOOD CHALKER
President
ATTEST:
DONALD A. SHAHAN
Secretary
2
STATE OF TEXAS )
) SS.
COUNTY OF TAYLOR )
I, the undersigned authority, do hereby certify that on this
day personally appeared before me Durwood Chalker who declared he is
President of the corporation executing the foregoing document, and
being duly sworn, acknowledged that he signed the foregoing document
in the capacity therein set forth and declared that the statements
contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 9th day of May, 1979.
M. W. HARPER
Notary Public,
Taylor County,
Texas
3
RESTATED ARTICLES OF INCORPORATION
WITH AMENDMENTS
OF
WEST TEXAS UTILITIES COMPANY
1. West Texas Utilities Company, a corporation
organized and existing under the laws of the State of
Texas, pursuant to the provisions of Article 4.07 of
the Texas Business Corporation Act hereby adopts re-
stated articles of incorporation which accurately copy
the articles of incorporation and all amendments thereto
that are in effect to date and as further amended by
such restated articles of incorporation as hereinafter
set forth and which contain no other change in any
provision thereof.
2. The articles of incorporation of the corpora-
tion are amended by the restated articles of incorporation
as follows:
a. Article VI, Paragraph (5), of the articles
of incorporation of the corporation is amended by the
restated articles of incorporation by adding to sub-
paragraph (B) an additional exception in computing the
total principal amount of unsecured obligations of the
corporation by adding, after clause (y), an additional
exception as set forth in clause (z).
b. Article VI, Paragraph (5) (C) , of the
articles of incorporation of the corporation is amended
by the restated articles of incorporation by deleting
from clause (a) the words "repairs, maintenance and" and
by changing clause (b) in Paragraph (5) (C) to require
the deduction, as charges for depreciation, retirement,
renewals, and replacements and/or amortization, in com-
puting gross income available for payment of interest on
debt securities and dividends on the Preferred Stock and
any prior or parity stock, of at least a specified
percentage of depreciable bondable property of the corpo-
ration under its mortgage indenture, rather than the
deduction of an amount equal to at least 15% of its gross
operating revenues (as defined).
c. Article VI, Paragraph (6) of the articles
of incorporation of the corporation is amended by the
restated articles of incorporation by changing clause
(4) in the definition of "Common Stock Equity" contained
in the third grammatical paragraph of Paragraph (6), to
apply only to the period beginning January 1, 1954, and
ending December 31, 1976, and adding a new clause (5) to
apply to periods after December 31, 1976, requiring a
deduction as charges for depreciation, retirement,
renewal and replacements and/or amortization of at least
a specified percentage of depreciable bondable property,
in computing the surplus component of common stock equity.
d. Article VI, Paragraph (6) of the articles
of incorporation of the corporation is amended by the
restated articles of incorporation by deleting the
definition of "total capitalization" set forth in the
fourth grammatical paragraph in clause (i) and placing
a new definition of total capitalization in clause (i)
of that paragraph.
e. Article VI, Paragraph (6) of the articles
of incorporation of the corporation is amended by the
restated articles of incorporation by deleting the
second grammatical paragraph in its entirety and by
adding a new second paragraph which defines "net income
available for common stock dividends" which does not
require a minimum deduction based on an earnings test.
3. Each such amendment made by these restated
articles of incorporation has been effected in conformity
with the provisions of the Texas Business Corporation Act,
and such restated articles of incorporation and each such
amendment made by the restated articles of incorporation
were duly adopted by the shareholders of the corporation
on April 19, 1977.
4. The number of shares outstanding at such date
was 2,475,000 shares of Common Stock and 60,000 shares
of Preferred Stock; all of such shares were entitled to
vote on the restated articles of incorporation as so
amended; and, in addition, the 60,000 outstanding shares
of Preferred Stock were entitled to vote as a class on
the restated articles of incorporation as so amended;
all of such shares of Common Stock voted for the
restated articles of incorporation as so amended;
45,023 of such shares of Preferred Stock voted for
the amendment of the articles set forth in paragraph
2.a. hereof and 5,449 of such shares of Preferred
Stock voted against such amendment; 42,292 of such
shares of Preferred Stock voted for the amendment of
the articles set forth in paragraph 2.b. hereof and
8,180 of such shares of Preferred Stock voted
against such amendment; 45,620 of such shares of
Preferred Stock voted for the amendment of the
articles set forth in paragraph 2.c. hereof and
4,852 of such shares of Preferred Stock voted
against such amendment; 44,682 of such shares of
Preferred Stock voted for the amendment of the
articles set forth in paragraph 2.d. hereof and
5,790 of such shares of Preferred Stock voted
against such amendment; and 45,378 of such shares
of Preferred Stock voted for the amendment of the
articles set forth in paragraph 2.e. hereof and
5,094 of such shares of Preferred Stock voted
against such amendment.
5. The articles of incorporation and all
previous restatements, amendments and supplements
thereto are hereby superseded by the following re-
stated articles of incorporation which accurately
copy the entire text thereof as amended as above set
forth:
RESTATED ARTICLES WITH AMENDMENTS OF
WEST TEXAS UTILITIES COMPANY
I. The name of this corporation is WEST TEXAS
UTILITIES COMPANY.
II. The purposes for which the corporation is
formed are the generation of and supply of gas, electric
light and motive power to the public.
III. The places where the business of the
corporation is to be transacted are in Briscoe, Callahan,
Childress, Coke, Coleman, Collingsworth, Concho, Cottle,
Crockett, Dickens, Donley, Eastland, Fisher, Foard, Hall,
Hardeman, Haskell, Irion, Jones, Kent, Kimble, Knox,
Mason, McCulloch, Menard, Motley, Reagan, Runnels,
Shackelford, Sterling, Stonewall, Taylor, Throckmorton,
Tom Green, Upton, Wheeler, and Wilbarger counties and
any and all other counties in the State of Texas, with
the principal office of the corporation at Abilene, in
Taylor County, Texas, and with branch offices in other
towns and villages in the State of Texas..
IV. The period of duration or existence of the
corporation shall be perpetual.
V. The number of directors shall be twelve.
The names and addresses of the persons now serving as directors
are as follows:
Name Address
Robert H. Alvis P.O. Box 360
Abilene, Texas 79604
Durwood Chalker P.O. Box 841
Abilene, Texas 79604
Ralph N. Hooks P.O. Box 34
Abilene, Texas 79604
J.C. Hunter, Jr. 803 Citizens National
Bank Building
Abilene, Texas 79601
R.E. Kennedy P.O. Box 841
Abilene, Texas 79604
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C. R. Kinard 1052 North 5th
Abilene, Texas 79601
G. H. King P. 0. Box 841
Abilene, Texas 79604
Tommy Morris P. 0. Box 1221
Abilene, Texas 79604
S. B. Phillips, Jr. One Main Place-Suite 2700
Dallas, Texas 75250
W. K. Ramsey P. 0. Box 5021
San Angelo, Texas 76901
Armistead D. Rust Rust Bear Creek Ranch
Menard, Texas 76859
W. P. Sayles P. 0. Box 841
Abilene, Texas 79604
VI. The total number of authorized shares of
capital stock of the corporation is 2,860,000 shares,
consisting of 60,000 shares of the par value of $100 each
and 2,800,000 shares of the par value of $22 each, and
divided into two classes, namely: (1) Preferred Stock,
consisting of 60,000 shares of the par value of $100 each
and designated "4.40% Cumulative Preferred Stock," and
(2) Common Stock, consisting of 2,800,000 shares of the
par value of $22 each. Any increase hereafter authorized
in the total number of authorized shares of the par value
of $100 each of Preferred Stock may consist of shares having
such designation, dividend rate, redemption prices and
terms, price payable in respect thereof in the event of
the voluntary liquidation, dissolution or winding up of
the corporation and provisions (if any) as to sinking
fund or conversion into other shares, as shall be
provided by the amendment to the Charter of the corporation
authorizing such increase.
The preferences, rights, privileges and powers
and the restrictions, limitations or qualifications of
the shares of the par value of $100 each of Preferred
Stock (including the shares thereof designated "4.40%
Cumulative Preferred Stock" and the shares of all other
designations or series thereof that may be hereafter
authorized) and the rights and powers of the shares
of the par value of $22 each of Common Stock of the
corporation shall be as hereinafter set forth.
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The term "Preferred Stock, as hereinafter
used, except where the context otherwise indicates or
requires, shall mean and include only the shares of the
par value of $100 each of Preferred Stock, of all
designations or series, now or hereafter authorized.
(1) The holders of shares of the Preferred
Stock shall be entitled to receive, in respect of each
share held, dividends upon the par value thereof at the
annual rate specified in the designation or series of
such share, payable quarter-yearly on the first day of
January, April, July and October in each year, when and
as declared by the Board of Directors, out of the surplus
or net profits of the corporation. Such dividends shall
be cumulative (a) as to the shares initially issued of
any designation or series, from the date of issue or such
other date as may be provided in the resolution of the
Board of Directors authorizing the initial issue of shares
of such designation or series and (b) as to all other
shares of such designation or series, from the first day
of the dividend period in which issued, and such dividends
shall be paid, or declared and set apart for payment,
before any dividends shall be declared or paid on, or set
apart for, the Common stock, so that if, for any past
dividend period or the current dividend period, dividends
on the Preferred Stock shall not have been paid, or
declared and set apart for payment, the deficiency shall
be fully paid, or declared and funds set apart for the
payment thereof, before any dividends shall be declared
or paid on, or set apart for, the Common Stock. No
dividend shall at any time be paid on, or set apart for,
any share of the Preferred Stock of any designation
or series unless at the same time there shall be paid
on, or set apart for, all shares of the Preferred Stock
then outstanding dividends in such amount that the
holders of all shares of the Preferred Stock shall receive,
or have set apart for them, a uniform percentage of the
full annual dividend to which they are, respectively,
entitled. The term "dividend period", as used herein,
refers to each period of three consecutive calendar months
ending on the day next preceding the date on which
dividends, if declared, shall be payable. The holders of
shares of the Preferred Stock shall not be entitled to
receive any dividends thereon other than the dividends at
the annual rate specified in the designation or series of
such shares. All shares of the Preferred Stock at any time
authorized, regardless of the designation or series
thereof, shall constitute one class of stock and, excepting
only as to the designations thereof, the rates of dividends
payable thereon, the redemption prices and terms thereof,
the prices payable in respect thereof in the event of the
voluntary liquidation, dissolution or winding up of the
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corporation and any provisions as to sinking fund or
conversion into other shares, shall be of equal rank and
confer equal rights upon the holders thereof. All shares
of the Preferred Stock bearing the same designation at
any time outstanding shall constitute one series of Preferred
Stock; and all shares of any one designation or series of
Preferred Stock shall be alike in all respects. Whenever
full cumulative dividends as aforesaid upon the Preferred
Stock (of all designations or series) and upon any other
shares of stock having priority as to dividends over the
Common Stock, then outstanding, for all past dividend
periods and for the current dividend period shall have been
paid, or declared and set apart for payment, the Board
of Directors may declare dividends on the Common Stock of
the corporation, subject to the restrictions hereinafter
contained.
(2) In the event of the involuntary liquidation,
dissolution or winding up of the corporation, the
holders of shares of the Preferred Stock then outstanding,
regardless of the designation or series thereof, shall
be entitled to be paid in full, out of the net assets
of the corporation, the par value of their shares plus
an amount equal to the accrued dividends on such shares,
and no more, before any amount shall be paid or distributed
to the holders of shares of the Common Stock. In the
event of the voluntary liquidation, dissolution or winding
up of the corporation, the holders of shares of the 4.40%
Cumulative Preferred Stock then outstanding shall be entitled
to be said in full, out of the net assets of the corporation,
the then effective redemption price of such shares (including
an amount equal to the accrued dividends on such shares),
and no more, before any amount shall be paid or distributed
to the holders of shares of the Common Stock. After payment
in full to the holders of all shares of the Preferred Stock
(of all designations or series) and of any other shares of
stock having priority as to assets over the Common Stock,
then outstanding, of the amounts to which they are
respectively entitled as herein provided, the remaining
assets and profits shall be divided among and paid or
distributed to the holders of shares of the Common Stock.
(3) The corporation, on the sole authority of its
Board of Directors, shall have the right at any time or
from time to time to redeem and retire all or any part of
the Preferred Stock, or all or any part of the shares of
any one or more designations or series of the Preferred
Stock, upon and by the Payment to the holders of the shares
to be redeemed, or upon or by setting aside, as hereinafter
provided, for the benefit of such holders, the redemption
price or prices of the shares to be redeemed, which
-5-
redemption price in respect of shares of the 4.40% Cumulative
Preferred Stock shall be $107 per share plus accrued
dividends to the date of redemption if such date of
redemption is subsequent to March 31, 1964; provided that
not later than on the thirtieth day prior to the date fixed
for such redemption, nor earlier than on the ninetieth
day before such date of redemption, notice of the intention
of the corporation to redeem such shares, specifying the
shares to be redeemed and the date and place of redemption,
(a) shall be published in a newspaper of general circula-
tion published in the City of Abilene, Texas, and also in
a newspaper of general circulation published in the City of
Dallas, Texas, and in a newspaper of general circulation
published in the City of New York, New York, and (b) shall
be deposited in a United States post office or mail box
at any place in the United States addressed to each holder
of record of the shares to be redeemed, at his address as
the same appears upon the records of the corporation;
and provided, further, that in mailing such notice,
unintentiona1 omissions or errors in names or addresses
or other defects in such mailing shall not impair the
validity of the notice of, or the proceedings for, such
redemption. In every case of the redemption of less than
all the outstanding shares of any particular designation
or series of the Preferred Stock, the shares of such
designation or series to be redeemed shall be chosen by
lot in such manner as may be prescribed by resolution of
the Board of Directors. The corporation may deposit with
a bank or trust company, which shall be named in the
notice of redemption, shall be located in Abilene, Texas,
or in Dallas, Texas, or in Chicago, Illinois, and shall
then have capital, surplus and undivided profits of at
least $1,000,000, the aggregate redemption price of the
shares to be redeemed, in trust for the payment on or before
the redemption date to or upon the order of the holders
of such shares, upon surrender of the certificates for
such shares. Such deposit in trust may, at the option
of the corporation, be upon terms whereby in case the holder
of any shares of the Preferred Stock called for redemption
shall not, within six years after the date fixed for the
redemption of such shares, claim the amount on deposit
with any bank or trust company for the payment of the
redemption price of said shares, such bank or trust company
shall, on demand, when requested by resolution of the
Board of Directors of the corporation or its successor,
pay to or upon the written order of the corporation or
its successor the amount so deposited, and thereupon such
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bank or trust company shall-be released from any and all
further liability with respect to the payment of such
redemption price and the holder of said shares shall be
entitled to look only to the corporation or its successor
for the payment thereof. Upon the giving of notice of
redemption and upon the deposit of the redemption price,
as aforesaid, or, if no such deposit is made, upon the
redemption date (unless the corporation defaults in making
payment of the redemption price as set forth in such notice),
such holders shall cease to be stockholders with respect
to said shares, and from and after the making of said
deposit and the giving of said notice, or, if no such
deposit is made, after the redemption date (the corporation
not having defaulted in making payment of the redemption
price as set forth in such notice), said shares shall no
longer be transferable on the books of the corporation, and
such holders shall have no interest in or claim against
the corporation with respect to said shares, but shall be
entitled only to receive said moneys on the date fixed for
redemption as aforesaid from said bank or trust company,
or from the corporation, without interest thereon, upon
surrender of the certificates for said shares as aforesaid.
All shares of the Preferred Stock which have been redeemed
shall be cancelled and retired and shall not be reissued.
The term "accrued dividends", as used herein, shall
be deemed to mean, in respect of any share of the Preferred
Stock as of any given date, the amount of dividends payable
on such share, computed, at the annual dividend rate stated
in the designation or series of such share, from the date
on which dividends thereon became cumulative to and including
such given date, less the aggregate amount of all dividends
which have been paid or which have been declared and set
apart for payment on such share. Accumulations of dividends
shall not bear interest.
Nothing herein contained shall limit any legal right of
the corporation to redeem, purchase or otherwise acquire
any shares of the Preferred Stock; provided, however, that
the corporation shall not redeem, purchase or otherwise
acquire less than all the outstanding shares of the Preferred
Stock, if, at the time of such redemption, purchase or other
acquisition, dividends payable on the Preferred Stock shall
be in default in whole or in part, unless prior to or
concurrently with such redemption, purchase or other
acquisition, all such defaults shall be cured, or unless
such redemption, purchase or other acquisition shall have
been ordered, approved or permitted by the Securities and
Exchange Commission under the Public Utility Holding Company
Act of 1935 or by any successor commission or other regulatory
authority of the United States of America then having
-7-
jurisdiction in the premises. All shares of the Preferred
Stock so redeemed, purchased or acquired shall be cancelled
and retired and shall not be reissued.
(4) So long as any shares of the Preferred Stock shall
be outstanding, the corporation shall not, without the
consent (given by vote at an annual or special meeting of
stockholders) of the record holders of at least two-thirds
of the total number of shares of the Preferred Stock then
outstanding, voting separately as a class:
(A) create, authorize or issue any new stock
which, after issuance, would rank prior to the
Preferred Stock as to dividends or assets, or create,
authorize or issue any security convertible into
shares of any such new stock, except for the purpose
of providing funds for the redemption of all the
Preferred Stock then outstanding, in which case such
new stock or security shall not be issued until such
redemption shall have been authorized, notice of such
redemption given and the aggregate redemption price
deposited as provided in paragraph (3) of this
Article VI; provided that any such new stock or
security, the creation, authorization or issue of
which shall have been consented to as herein provided,
shall not be issued after the expiration of twelve
months following the giving of such consent; or
(B) amend, alter, change or repeal any of the
express terms of the Preferred Stock then outstanding
in a manner substantially prejudicial to the holders
thereof; provided that (i) the increase or decrease
in the authorized amount of the Preferred Stock or
the creation, or increase or decrease in the authorized
amount, of any new class of stock ranking on a parity
with the Preferred Stock shall not, for the purposes
of this subparagraph (B), be deemed to be prejudicial
to the holders of the Preferred Stock, and (ii) if
any such amendment, alteration, change or repeal
would be substantially prejudicial to the holders of
shares of one or more, but less than all, of the
designations or series of the Preferred Stock at the
time outstanding, the consent only of the record
holders of at least two-thirds of the total number
of outstanding shares of each such designation or
series so prejudicially affected shall be required.
(5) So long as any shares of the Preferred Stock shall
be outstanding, the corporation shall not, without the
consent (given by vote at an annual or special meeting of
- 8 -
stockholders) of the record holders of a majority of the
total number of shares of the Preferred Stock then outstanding,
voting separately as a class:
(A) merge or consolidate with or into any other
corporation or corporations or sell or otherwise
dispose of all or substantially all of the assets of
the corporation, unless such merger, consolidation,
sale or other disposition, or the exchange, issuance
or assumption of all securities to be exchanged, issued
or assumed in connection with any such merger,
consolidation, sale or other disposition, shall have
been ordered, approved or permitted by the Securities
and Exchange Commission under the Public Utility
Holding Company Act of 1935 or by any successor
commission or other regulatory authority of the United
States of America then having jurisdiction in the
premises; provided that the provisions of this
subparagraph (A) shall not apply to a purchase or
other acquisition by the corporation of franchises
or assets of another corporation in any manner which
does not involve a corporate merger or consolidation; or
(B) issue or assume any unsecured notes, deben-
tures or other securities representing unsecured
indebtedness (herein called "unsecured obligations"),
for purposes other than (i) the refunding of outstanding
unsecured indebtedness or unsecured obligations thereto-
fore incurred, issued or assumed by the corporation, or
(ii) the reacquisition, redemption or other retirement
of any indebtedness, if such transaction has been
ordered, approved or permitted by the Securities
and Exchange Commission under the Public Utility
Holding Company Act of 1935 or by any successor
commission or other regulatory authority of the
United States of America then having jurisdiction
in the premises, or (iii) the reacquisition, redemption
or other retirement of all outstanding shares of the
Preferred Stock or of stock ranking prior to or on
a parity with the Preferred Stock,
if, immediately after such issue or assumption, the total
principal amount of unsecured obligations issued or assumed
by the corporation (including any such obligations then to
be issued or assumed), computed as hereinafter provided,
would exceed an amount equal to 10% of the sum of
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(a) the total principal amount of all bonds or
other securities representing secured indebtedness
issued or assumed by the corporation and then to
be outstanding, and
(b) the aggregate amount of the capital and
surplus of the corporation as then to be stated on
the books of account of the corporation.
In computing, for the purposes of this provision, the
total principal amount of unsecured obligations issued or
assumed by the corporation and outstanding or to be
outstanding as of the date of issue or assumption of any
such obligations then to be issued or assumed, there shall
be excluded, but in an amount not exceeding in the aggregate
10% of the sum of the amounts specified in clauses (a) and
(b) above, the sum of
(x) the principal amount of all unsecured
obligations the maturity or payment date of which
is in excess of ten years from such date,
(y) the principal amount of all unsecured
obligations which had by their terms an original
maturity in excess of ten years but which have
become and are due and payable by their terms in
ten years or less, but more than three years, from
such date, or which are required to be retired,
prior to their maturity, whether through a sinking
fund or otherwise, in ten years or less, but more
than three years, from such date, and
(z) the principal amount of all unsecured
obligations, the maturity or payment date of which
is not later than November 1, 1982, and which had
by their terms an original maturity not in excess
of ten years, which principal amount is in excess of
10% of the amount specified in clauses (a) and (b) above.
And whenever the aggregate principal amount of unsecured
obligations outstanding at any such date, determined after
making the exclusions as above provided, shall exceed 10%
of the sum of the amounts specified in clauses (a) and (b)
above, no additional unsecured obligations shall be issued
or assumed by the corporation, except for the purposes set
forth in items (i), (ii) or (iii) above, until such aggre-
gate principal amount of outstanding unsecured obligations
shall have been reduced to 10% of the sum of the amounts
specified in clauses (a) and (b) above; or
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(C) issue, sell, or otherwise dispose of any shares of
the Preferred Stock (in addition to the initial issue of 60,000
shares of the Preferred Stock), or of any other class of stock
ranking on a parity with the Preferred Stock as to dividends or
assets, for any purpose other than in exchange for or of effecting
the redemption or retirement of not less than an equal number
of shares of the Preferred Stock, or of stock ranking prior to
or on a parity with the Preferred Stock, then outstanding,
unless the gross income of the corporation to be available for
the payment of interest for a period of twelve full consecutive
calendar months ending within the fifteen calendar months imme-
diately preceding the issuance, sale or disposition of such stock,
determined in accordance with generally accepted accounting
practices [but in any event after deducting all taxes and
the greater of (a) the aggregate amount for said period
charged by the corporation on its books to income or
earned surplus for provision for depreciation of property,
or (b) an amount equal to 2.9% (or such other percentage
as may upon application by the corporation be approved
by the Securities and Exchange Commission, or any
successor authority, under the Public Utility Holding Company
Act of 1935) of the arithmetical average of the amount of
depreciable property of the corporation at the beginning,
and the amount thereof at the end, of such 12-month period,
in plant accounts of the corporation, with respect to which
bonds may at the time be authenticated under any indenture
securing first mortgage bonds of the corporation, determined in
accordance with generally accepted accounting practices, and
provided that amounts included in plant acquisition adjustment
account, or accounts of similar purpose, shall not be
included in the amount of such property if adequate pro-
vision for the amortization of such amounts is made by
current charges to income or surplus) shall have been at
least one and one-half times the sum of (i) the annual
interest charges on all bonds, debentures, notes and other
securities representing indebtedness of the corporation,
and (ii) the annual dividend requirements on all outstand-
ing shares of the Preferred Stock and on all other classes
of stock, if any, ranking prior to or on a parity with
the Preferred Stock as to dividends or assets, including
the shares proposed to be issued; provided that there shall
be excluded from the foregoing computation interest charges
and dividend requirements on all indebtedness and shares
of stock which are to be retired in connection with the
issue of such additional shares of the Preferred Stock,
or other class of stock ranking prior to or on a parity
with the Preferred stock as to dividends or assets; and
provided, further, that in any case where such additional
shares of the Preferred Stock, or other class of stock
ranking on a parity with the Preferred Stock as to dividends
-11-
or assets, are to be issued in connection with the ac-
quisition of additional property, the gross income of
the property to be so acquired, computed on the same
basis as the gross income of the corporation as above pro-
vided, may be included on a pro forma basis in making
the foregoing computation; or
(D) issue, sell, or otherwise dispose of any shares of
the Preferred Stock (in addition to the initial issue of
60,000 shares of the Preferred Stock), or of any other
class of stock ranking on a parity with the Preferred Stock
as to dividends or assets, unless the aggregate of (i)
the capital of the corporation applicable to the Common
Stock and (ii) the surplus of the corporation shall be
not less than the aggregate amount payable upon the in-
voluntary liquidation, dissolution or winding up of the
corporation in respect of all shares of the Preferred
Stock and all shares of stock, if any, ranking prior to
or on a parity with the Preferred Stock as to dividends
or assets, which will be outstanding after the issue of
the shares proposed to be issued; provided, that if,
for the purposes of meeting the requirements of this sub-
paragraph (D) it becomes necessary to take into consideration
any earned surplus of the corporation, the corporation
shall not thereafter pay any dividends on shares of the
Common Stock which would result in reducing the corpora-
tion's Common Stock Equity (as in paragraph (6) hereinafter
defined) to an amount less than the aggregate amount
payable upon the involuntary liquidation, dissolution
or winding up of the corporation in respect of all shares
of the Preferred Stock, and of any stock ranking prior to or
on a parity with the Preferred Stock as to dividends or
assets, at the time outstanding.
No provision contained in this paragraph (5), nor in
paragraph (4) of this Article VI, is intended or shall be
construed to relieve the corporation from compliance with
any applicable statutory provision requiring the vote or
consent of the holders of a greater number of the outstanding
shares of the Preferred Stock.
(6) So long as any shares of the Preferred Stock shall
be outstanding, the corporation shall not declare or pay any
dividends on its Common Stock, except as follows:
(a) if and so long as the Common Stock Equity
on the last day of a calendar month ending within
sixty days next preceding the date on which a dividend
on Common Stock is proposed to be declared is, or as
a result of the payment of such dividend would become,
-12-
less than 20% of total capitalization, the corporation
shall not (except as hereinafter provided) declare
such dividend in an amount which, together with all
other dividends on Common Stock paid within the
year ending with and including the date on which
such dividend is proposed to be payable, exceeds
50% of the net income of the corporation available
for dividends on the Common Stock for the twelve
full consecutive calendar months ending within
sixty days next preceding the month in which such
dividend is proposed to be declared, provided,
however, that if dividends (or additional dividends)
on Common Stock could have been declared under the
foregoing limitation in any previous year or years,
but were not declared, then such dividend proposed
to be paid may exceed 50% of the above specified net
income of the corporation by a total amount equal
to the aggregate amount of all dividends on Common
Stock that could have been so declared but were not
declared; and
(b) if and so long as the Common Stock Equity
on the last day of a calendar month ending within
sixty days next preceding the date on which a dividend
on Common Stock is proposed to be declared is, or
as a result of the payment of such dividend would
become, less than 25% but not less than 20% of total
capitalization, the corporation shall not (except as
hereinafter provided) declare such dividend in an
amount which, together with all other dividends on
Common Stock paid within the year ending with and
including the date on which such dividend is proposed
to be payable, exceeds 75% of the net income of the
corporation available for dividends on the Common
Stock for the twelve full consecutive calendar
months ending within sixty days next preceding the
month in which such dividend is proposed to be declared,
provided, however, that if dividends (or additional
dividends) on Common Stock could have been declared
under the foregoing limitation of this paragraph in
any previous year or years, but were not declared,
then such dividend proposed to be paid may exceed
75% of the above specified net income of the
corporation by a total amount equal to the aggregate
amount of all dividends on Common Stock that could
have been so declared but were not declared; and
(c) at any time when the Common Stock Equity
is 25% or more of total capitalization, the corporation
may not declare dividends on shares of the Common
-13-
Stock which would reduce the Common Stock Equity
below 25% of total capitalization, except to the
extent provided or permitted in subparagraphs (a)
and (b) above.
"Net income of the corporation available for dividends
on Common Stock" shall be determined by deducting from
the total of operating revenues and other income
of the corporation for any given period, all operating
expenses for such period (including maintenance, repairs
and depreciation, taxes based on income and all other
taxes, all proper accruals, interest charges, amortization
charges, other proper income deductions and dividends paid
or accrued on outstanding shares of stock of the corporation
ranking prior to the Common Stock as to dividends, for
such period), all as determined in accordance with such
system of accounts as may be prescribed by regulatory
authorities having jurisdiction in the premises or, in
the absence of any such system of accounts, in accordance
with generally accepted accounting practices.
For the purposes of this paragraph (6) and of subpara-
graph (D) of paragraph (5) hereof:
The term "Common Stock Equity" shall mean the sum of
(a) the aggregate par value of, or stated capital represented
by, the outstanding shares (other than shares owned by the
corporation) of stock of the corporation ranking junior
to the Preferred Stock as to dividends or assets, (b) the
premium on such junior ranking stock, and (c) the surplus
(including earned surplus, capital or paid-in surplus and
surplus invested in plant) of the corporation, less, unless
the amounts or items are being amortized or are being
provided for by reserves, (1) any amounts recorded on the
books of the corporation for utility plant and other plant
in excess of the original cost thereof, (2) unamortized
debt discount and expense, capital stock discount and
expense and any other intangible items set forth on the
asset side of the balance sheet as a result of accounting
convention, (3) the excess, if any, of the aggregate
amount payable on involuntary liquidation, dissolution or
winding up of the affairs of the corporation upon all
outstanding preferred stock of the corporation over the
aggregate par or stated value of such preferred stock and
any premiums thereon, (4) the excess, if any, for the
period beginning January 1, 1954, and ending December 31,
1976, of an amount equal to 15% of the gross operating
revenues derived by the corporation from the operation
of its properties for the period (excluding therefrom
non-operating income and revenues derived directly
from properties leased to the corporation),
after deducting from such revenues the aggregate cost of
electric energy and gas purchased for exchange or resale,
over the aggregate amount charged or provided by the cor-
poration on its books for maintenance, repairs and depre-
ciation for such period, and (5) the excess, if any, for
the period beginning January 1, 1977, to the end of a month
ending within ninety days next preceding the date as of
which Common Stock Equity is being determined, of an
amount equal to 2.9% annually (or such other percentage as may
upon application by the corporation be approved by the
Securities and Exchange Commission, or any successor
authority, under the Public Utility Holding Company Act
of 1935) of the arithmetical average of the amount of
depreciable property of the corporation at the beginning
and the amount thereof at the end, of each calendar year and
portion thereof contained in such period, in plant accounts
of the corporation, with respect to which bonds may at the
time be authenticated under any indenture securing first
mortgage bonds of the corporation, determined in accordance
with generally accepted accounting practices (excluding amounts
included in plant acquisition adjustment account, or accounts
of similar purposes, if adequate provision for the amortization
of such amounts is made by current charges to income or surplus),
over the aggregate amount charged or provided by the corporation
on its books as charges for depreciation, retirements, renewals
and replacements and/or amortization for such period.
For the purposes of this paragraph (6):
(i) The term "total capitalization" of the corporation
shall mean the aggregate of (a) the principal amount of all
outstanding bonds, debentures, notes and other securities
representing indebtedness (whether secured or unsecured) of
the corporation maturing more than twelve months after the
date as of which total capitalization is being determined,
and (b) the par value of, or stated capital represented
by, the outstanding shares of the capital stock of all
classes of the corporation, all premiums in respect of such
stock, as carried on the books of the corporation, and
the amount of all surplus accounts of the corporation, after
deducting from such aggregate any amounts required to be
deducted, in the determination of Common Stock Equity,
pursuant to the provisions of clauses (1) and (2) of the
foregoing definition of "Common Stock Equity."
(ii) The term "dividends on Common Stock" shall include
dividends on Common Stock (other than dividends payable
only in shares of Common Stock), distributions on, and
purchases or other acquisitions for value of, any Common
Stock of the corporation or other stock, if any, ranking
-14-
-15-
junior to the Preferred Stock as to dividends or assets.
(7) (a) No holder of shares of the Preferred Stock
shall be entitled to vote, at any meeting of stockholders
of the corporation, for the election of directors or in
respect of any other matter, except as expressly provided
in paragraph (4) or (5) of this Article VI or in this
paragraph (7) or as may be required by law. In such
excepted cases, each record holder of shares of the
Preferred Stock shall have one vote for each share of
the Preferred Stock held by him. Each record holder of
shares of Common Stock shall, at all meetings of stockholders
of the corporation, have one vote for each share of Common
Stock held by him, except as otherwise provided in this
paragraph (7).
(b) If and when dividends payable on the Preferred
Stock at any time outstanding shall be in default in
an amount equal to four full quarter-yearly dividends
or more per share, and thereafter until all dividends on
such Preferred Stock in default shall have been paid,
the record holders of shares of the Preferred Stock, voting
separately as a class, shall be entitled, at each meeting
of stockholders at which directors are elected, to elect
the smallest number of directors necessary to constitute
a majority of the full Board of Directors of the corporation,
and, except as provided in the next following paragraph (c),
the holders of the Common Stock, voting separately as a
class, shall be entitled to elect the remaining directors
of the corporation. The terms of office, as directors, of
all persons who may be directors of the corporation at
the time shall terminate upon the election of a majority
of the Board of Directors by the holders of the Preferred
Stock, except that if the holders of the Common Stock shall
not have elected the remaining directors of the corporation,
then, and only in that event, the directors of the
corporation in office just prior to the election of a
majority of the Board of Directors by the holders of the
Preferred Stock shall elect the remaining directors of
the corporation. Thereafter, while such default continues
and the majority of the Board of Directors is being elected
by the holders of the Preferred Stock, the remaining
directors, whether elected by directors as aforesaid, or,
whether originally or later elected by holders of the
Common Stock, shall continue in office until their
successors are elected by holders of the Common Stock and
shall qualify.
(c) If and when all dividends then in default on
the Preferred Stock then outstanding shall be paid (such
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dividends to be declared and paid, out of any funds legally
available therefor, as soon as reasonably practicable),
the holders of shares of the Preferred Stock shall be
divested of any special right with respect to the election
of directors, and the voting power of the holders of the
Preferred Stock and the holders of the Common Stock shall
revert to the status existing before the first dividend
payment date on which dividends on the Preferred Stock
were not paid in full, but always subject to the same
provisions for vesting such special rights in the record
holders of shares of the Preferred Stock in case of further
like defaults in the payment of dividends thereon as
described in the foregoing paragraph (b). Upon termination
of any such special voting right upon payment of all
accumulated and unpaid dividends on the Preferred Stock,
the terms of office of all persons who may have been
elected directors of the corporation by vote of the holders
of the Preferred Stock as a class, pursuant to such special
voting right, shall forthwith terminate, and the resulting
vacancies shall be filled by the vote of a majority of
the remaining directors. Dividends shall be deemed to have
been paid, as that term is used in this paragraph (c),
whenever such dividends shall have been declared and paid,
or declared and provision made for the payment thereof,
or whenever there shall be sufficient surplus or net profits
of the corporation legally available for the payment thereof
which shall have accrued since the date of the default
giving rise to such special voting right.
(d) In case of any vacancy in the office of a director
occurring among the directors elected by the holders of
the Preferred Stock, voting separately as a class, the
remaining directors elected by the holders of the Preferred
Stock, by affirmative vote of a majority thereof, or the
remaining director so elected if there be but one, may
elect a successor or successors to hold office for the
unexpired term or terms of the director or directors
whose place or places shall be vacant. Likewise, in case
of any vacancy in the office of a director occurring among
the directors not elected by the holders of the Preferred
Stock, the remaining directors not elected by the holders
of the Preferred Stock, by affirmative vote of a majority
thereof, or the remaining director so elected if there
be but one, may elect a successor or successors to hold
office for the unexpired term or terms of the director or
directors whose place or places shall be vacant.
(e) Whenever the right shall have accrued to the
record holders of the Preferred Stock to elect directors,
voting separately as a class, it shall be the duty of the
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President, a Vice-President or the Secretary of the
corporation forthwith to call and cause notice to be given
to the stockholders entitled to vote of a meeting to be
held at such time as the officers of the corporation may
fix, not less than forty-five nor more than sixty days
after the accrual of such right, for the purpose of electing
directors. The notice so given shall be mailed to each
record holder of shares of the Preferred Stock at his last
known address appearing on the records of the corporation
and shall set forth, among other things, (i) that by reason
of the fact that dividends payable on the Preferred Stock
are in default in an amount equal to four full quarter-
yearly dividends or more per share, the record holders
of the Preferred Stock, voting separately as a class,
have the right to elect the smallest number of directors
necessary to constitute a majority of the full Board
of Directors of the corporation, (ii) that any record
holder of the Preferred Stock has the right, at any
reasonable time, to inspect, and make copies of, the list
or lists of record holders of the Preferred Stock maintained
at the principal office of the corporation or at the office
of any Transfer Agent of the Preferred Stock, and (iii)
either the entirety of this paragraph or the substance
thereof with respect to the number of shares of the
Preferred Stock required to be represented at any meeting,
or adjournment thereof, called for the election of
directors of the corporation. At the first meeting of
stockholders held for the purpose of electing directors
during such time as the holders of the Preferred Stock
shall have the special right, voting separately as a class,
to elect directors, the presence in person or by proxy of
the record holders of not less than a majority of the
outstanding shares of Common Stock shall be required to
constitute a quorum of such class for the election of
directors, and the presence in person or by proxy of the
record holders of not less than a majority of the out-
standing shares of Preferred Stock shall be required to
constitute a quorum of such class for the election of
directors; provided, however, that in the absence of a
quorum of the holders of Preferred Stock, no election
of directors shall he held, but the holders of a majority
of the Preferred Stock present in person or by proxy shall
have power to adjourn the election of the directors to a
date not less than fifteen nor more than fifty days from
the giving of the notice of such adjourned meeting
hereinafter provided for; and provided, further, that at
such adjourned meeting, the presence in person or by proxy
of the record holders of not less than 35% of the outstanding
shares of Preferred Stock shall be required to constitute
a quorum of such class for the election of directors. In
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the event such first meeting of stockholders shall be so
adjourned, it shall be the duty of the President, a Vice-
President or the Secretary of the corporation, within
ten days from the date on which such first meeting shall
have been adjourned, to cause notice of such adjourned
meeting to be given to the stockholders entitled to vote
thereat, such adjourned meeting to be held not less than
fifteen days nor more than fifty days from the giving of
such second notice. Such second notice shall be given
in the form and manner hereinabove provided for with
respect to the notice required to be given of such first
meeting of stockholders, and shall further set forth that
a quorum was not present at such first meeting and that
the record holders of not less than 35% of the outstanding
shares of Preferred Stock shall be required to constitute
a quorum of such class for the election of directors at
such adjourned meeting. If the requisite quorum of the
record holders of the Preferred Stock shall not be present
at said adjourned meeting, then the directors of the
corporation then in office shall remain in office until
the next annual meeting of stockholders of the corporation,
or special meeting in lieu thereof, and until their
successors shall have been elected and shall qualify.
Neither such first meeting nor such adjourned meeting
shall be held on a date within sixty days of the date of
the next annual meeting of stockholders of the corporation
or special meeting in lieu thereof. At each annual
meeting of stockholders of the corporation, or special
meeting in lieu thereof, held during such time as the
record holders of the Preferred Stock, voting separately
as a class, shall have the right to elect a majority of
the Board of Directors, the foregoing provisions of this
paragraph (e) shall govern each annual meeting of
stockholders, or special meeting in lieu thereof, as if
said annual meeting or special meeting were the first
meeting of stockholders held for the purpose of electing
directors after the right of the record holders of the
Preferred Stock, voting separately as a class, to elect
a majority of the Board of Directors, should have accrued,
with the exception that if, at any adjourned annual meeting
or special meeting in lieu thereof, the record holders of
not less than 35% of the outstanding shares of Preferred
Stock are not present in person or by proxy, all the
directors shall be elected by a vote of the record holders
of not less than a majority of the shares of Common Stock
of the corporation present or represented at the meeting.
(f) In consideration of the issue, sale or delivery by
the corporation, and the purchase or other acquisition by
the holders thereof, of shares of the capital stock (both
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preferred and common) of the corporation, each and every
present and future holder of shares of the capital stock
(both preferred and common) of the corporation shall be
conclusively deemed, by purchasing, acquiring or holding
such shares, to have expressly consented to all and singular
the terms and provisions of this paragraph (7) and to have
agreed that the voting rights of such holder, and the
restrictions and qualifications thereof, shall be as set
forth in this paragraph (7).
(8) No share of stock or evidence of indebtedness
shall be deemed to be "outstanding", as that term is used
in this Article VI, if, prior to or concurrently with the
event in reference to which a determination as to the amount
thereof outstanding is to be made, the requisite funds for the
redemption, payment or other retirement thereof shall be deposi-
ted in trust for that purpose and, in the case of redemption,
the requisite notice for the redemption thereof shall be given
or the depositary of such funds shall be irrevocably authorized
and directed to give or complete such notice of redemption.
(9) No holder of shares of stock of any class of the
corporation shall be entitled, as a matter of right, to
subscribe for, purchase or receive any shares of the
stock of any class of the corporation, or any rights or
options of the corporation which it may issue or sell,
whether out of the number of shares now authorized or
hereafter authorized. Nor shall any holder of shares of
stock, of any class, of the corporation be entitled, as
a matter of right, to subscribe for, purchase or receive
any bonds, debentures or other obligations which the
corporation may issue or sell, which shall be convertible
into or exchangeable for stock of any class, or to which
shall be attached or appertain any warrant or warrants
(or other instrument or instruments) which shall confer upon
the holder or owner the right to subscribe for or purchase from
the corporation any shares of its capital stock of any class; and
all such additional issues of stock, rights, options, or of bonds,
debentures or other obligations convertible into or exchangeable
for stock, or to which such warrants shall be attached or
appertain, may be issued and disposed of as determined by the
Board of Directors to such persons (whether stockholders or not),
at such times, for such consideration and upon such terms,
permitted by the laws of the State of Texas, as the Board of
Directors in its absolute discretion may deem advisable.
(10) The corporation reserves the right to increase
or decrease its authorized capital stock, or any class
or classes thereof or any designation or series of any
such class, or to reclassify the same, and to amend, alter,
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change or repeal any provision contained in the Charter
(as amended) of the corporation or in any future
amendment to the Charter as then in effect, in the
manner now or hereafter prescribed by law, but subject
to such conditions and limitations as are hereinabove
prescribed; and all rights granted to or conferred
upon stockholders in the Charter (as amended) of the
corporation or any future amendment thereto, are granted
or conferred subject to this reservation.
(11) Neither a consolidation or merger of the
corporation with or into any other corporation, nor a
merger of any other corporation into the corporation, nor
the purchase or other acquisition, redemption or other
retirement by the corporation of all or any part of the
outstanding shares of its preferred stock of any class,
shall be deemed a distribution of assets, or a liquidation,
dissolution or winding up, of the corporation within the
meaning of any of the provisions of the Charter (as amended)
of the corporation, as then in effect.
IN TESTIMONY WHEREOF, West Texas Utilities Company has
caused the foregoing restated articles of incorporation with
amendments to be executed in duplicate on its behalf by its
officers thereunto duly authorized, on this 19th day of
April, 1977.
WEST TEXAS UTILITIES COMPANY
By Durwood Chalker
President
By Laverne Grace
Secretary
THE STATE OF TEXAS )
) SS.
COUNTY OF TAYLOR )
I, the undersigned authority, do hereby certify that on
this 19th day of April, 1977, personally appeared before me
Durwood Chalker and LaVerne Grace, who being by me first duly
sworn, declared that they are the President and Secretary,
respectively, of WEST TEXAS UTILITIES COMPANY, that they
signed the foregoing document as President and Secretary
of said corporation, and that the statements therein contained
are true.
Ann Hawk
Notary Public in and for
Taylor County, Texas
My COMMISSION EXPIRES
1-27-78
PAGE 3 OF THE BY-LAWS OF WEST TEXAS UTILITIES COMPANY
Section 3. Notice of the time and place of each annual meeting
shall be sent by mail to the recorded address of each stockholder entitled
to vote, not less than ten days before the date of the meeting. Like notice
shall be given of all special meetings, except in cases where other special
method of notice may be required by statute, in all which cases, the statutory
method shall be followed. The notice of a special meeting shall state the
object of the meeting. Notice of meetings may in all cases be waived by
stockholders entitled to notice.
Section 4. At any stockholders' meeting, except as otherwise provided
in Paragraph (7) of Article VI of the Charter, as amended, a majority
of the number of shares of stock outstanding eligible under the Charter, as
amended, to vote upon questions being submitted at such meeting, must be
represented, in person or by proxy, in order to constitute a quorum for the
transaction of business, but the stockholders represented at any meeting,
though less than a quorum may adjourn the meeting to some other day or
sine die.
Section 5. At all meeting of stockholders each share of stock eligible
under the Charter, as amended, to vote upon questions being sub-
mitted at such meeting shall be entitled to such a vote or votes as shall
be from time to time provided in the Charter, as amended, and such stock
may be represented by the holder thereof in person or a duly authorized proxy
in writing, duly filed with the Secretary of the Company.
Section 6. A full list of the stockholders entitled to vote at
the ensuing election, arranged in alphabetical order, with the residence of
each, and the number of shares held by each, shall be prepared by the Secre-
tary and filed in the office where the election is to be held, at least ten
days before every election, and shall at all times, during the usual hours
for business, be open to the examination of any stockholder.
ARTICLE V.
Directors.
Section 1. The Board of Directors shall consist of twelve (12)
members and, subject to the provisions of Paragraph (7) of Article VI of the
Charter, as amended, shall be elected at each annual meeting of the stock-
holders. If for any reason such election shall not be held at an annual
meeting, it may be subsequently held at any special meeting of the stock-
holders duly called for purpose. Except as otherwise provided in
Paragraph (7) of Article VI of the Charter, as amended, directors shall
hold office until the next succeeding annual meeting of stockholders and
until their respective successors shall have been duly elected and qualified.
Directors need not be stockholders.
Section 2. Except as otherwise provided in Paragraph (7) of
Article VI of the Charter, as amended, any vacancy occurring in the Board
of Directors may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
3
LIST OF DIRECTORS OF
WEST TEXAS UTILITIES COMPANY
Name Address
Robert H. Alvis P. 0. Box 360
Abilene, Texas 79604
Durwood Chalker P. 0. Box 841
Abilene, Texas 79604
Ralph N. Hooks P. 0. Box 34
Abilene, Texas 79604
J. C. Hunter, Jr. 803 Citizens National Bank
Building
Abilene, Texas 79601
R. E. Kennedy P. 0. Box 841
Abilene, Texas 79604
C. R. Kinard 1052 North 5th
Abilene, Texas 79601
G. H. King P. 0. Box 841
Abilene, Texas 79604
Tommy Morris P. 0. Box 1221
Abilene, Texas 79604
S. B. Phillips, Jr. One Main Place-Suite 2700
Dallas, Texas 75250
W. K. Ramsey P. 0. Box 5021
San Angelo, Texas 76901
Armistead D. Rust Rust Bear Creek Ranch
Menard, Texas 76859
W. P. Sayles P. 0. Box 841
Abilene, Texas 79604
I, La Verne Grace, do hereby certify that I am the
Secretary of West Texas Utilities Company, a Texas corporation, and,
as such Secretary, have in my custody and possession the corporate
records and seal of said corporation; and, as such Secretary, I do
further certify that the attached is an excerpt (Section 1, Article V)
from the By-laws of said corporation in effect as of the date of this
certificate; and, as such Secretary, I do further certify that the
attached is a list of the names and addresses of the incumbent Directors
of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of the corporation this 24th day of May, 1977.
Laverne Grace
Secretary of
West Texas Utilities Company
WEST TEXAS UTILITIES COMPANY
Statement of Change of Registered Agent
To the Secretary of State
of the State of Texas:
Pursuant to the provisions of the Texas Business Corporation Act,
the undersigned corporation, organized under the laws of the State
of Texas, submits the following statement for the purpose of changing
its registered agent in the State of Texas:
1. The name of the corporation is West Texas Utilities Company.
2. The post office address of its present registered office is
301 Cypress, Abilene, Texas 79601, formerly 1062 N. Third.
3. The name of its present registered agent is Durwood Chalker.
4. The name of its successor registered agent is Glen D. Churchill.
5. The post office address of its registered office and the post
office address of the business office of its registered agent,
as changed, will be identical.
6. Such change was authorized by an officer of the corporation
so authorized by resolution duly adopted by it board of
directors.
Dated: September 13, 1979.
West Texas Utilities Company
Glen D. Churchill
President
Donald A Shahan
Secretary
STATE OF TEXAS
County of Taylor
I, M. W. Harper, a notary public, do hereby certify
that on this 13th day of September, 1979, personally appeared before
me Glen D. Churchill, who being by me first duly sworn, declared that
he is the President of West Texas Utilities Company, that he signed
the foregoing document as President of the corporation and that the
statements therein contained are true.
M. W. HARPER
Notary Public Taylor County, Texas
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
WEST TEXAS UTILITIES COMPANY
West Texas Utilities Company (the "corporation"), a corporation
organized and existing by virtue of the laws of the State of Texas,
pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, adopts the-following Articles of Amendment to its
Restated Articles of Incorporation:
ARTICLE ONE
The name of the corporation is West Texas Utilities Company.
ARTICLE TWO
The following amendment to the Restated Articles of Incorporation was
adopted by the shareholders of the corporation on July 8, 1982. The
amendment authorizes for a temporary period an increase in the
proportion of permitted unsecured debt of the Company and an increase in
the proportion of permitted unsecured debt that may mature within 10
years.
The amendment alters Subsection (5) (B) of Article VI of the Restated
Articles of Incorporation, and changes it to read as follows:
"(5) So long as any shares of the Preferred Stock shall be
outstanding, the corporation shall not, without the consent (given
by vote at an annual or special meeting of stockholders) of the
record holders of a majority of the total number of shares of the
Preferred Stock then outstanding, voting separately as a class:
"(B) issue or assume any unsecured notes, debentures or other
securities representing unsecured indebtedness (herein referred to as
'unsecured obligations'), for any purpose other than (i) the refunding
of outstanding unsecured indebtedness or unsecured obligations
theretofore incurred, issued or assumed by the corporation, or (ii) the
reacquisition, redemption or other retirement of any indebtedness, if
such transaction has been ordered, approved or permitted by the
Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935 or by any successor commission or other regulatory
authority of the United States of America then having jurisdiction in
the premises, or (iii) the reacquisition, redemption or other
retirement of all outstanding shares of the Preferred Stock or of stock
ranking prior to or on a parity with the Preferred Stock, if:
"(1) immediately after such issue or assumption, the
total principal amount of all unsecured obligations issued or
assumed by the corporation and then outstanding would exceed
(a) 25% of the sum of the total principal amount of all bonds
or other securities representing secured indebtedness issued
or assumed by the corporation and then outstanding and the
aggregate amount of the capital and surplus of the
corporation as then stated on the books of account of the
corporation (such sum being hereinafter referred to as 'total
secured debt and capital'), or (b) the principal amount of all
unsecured obligations maturing in less than ten years (herein
referred to as 'short-term indebtedness'), issued or assumed
by the corporation and then outstanding, computed as herein
provided, would exceed 20% of the total secured debt and
capital; or
"(2) immediately after such issue or assumption, the
total principal amount of unsecured obligations would exceed
20% of total secured debt and capital, and either (a) the
total secured debt and capital of the corporation would exceed
$750,000,000, or (b) the sum of the capital and surplus of the
corporation as then stated on the books of account of the
corporation would be less than 40% of the sum of the
corporation's total secured debt and capital and short-term
indebtedness; or
"(3) with respect to the period commencing on the earlier
of (a) the date one year after the first day of commercial
operation of the Company's Oklaunion generating station or (b)
January 1, 1989 (the earlier of such dates being hereinafter
referred to as the 'Termination Date'), immediately after such
issue or assumption, the principal amount of all unsecured
obligations of the corporation then outstanding would exceed
20% of total secured debt and capital or the principal amount
of all short-term indebtedness of the corporation then
outstanding would exceed 10% of total secured debt and
capital.
"For purposes of this subparagraph (B), (i) with respect to any
unsecured obligation originally having a single maturity of more
than ten years, the principal amount of such obligation shall not
be regarded as short-term indebtedness until such principal amount
shall be due or required to be paid within three years and (ii)
with respect to unsecured obligations having serial maturities or
having sinking, purchase or similar periodic debt retirement
provisions, the principal amount of the final maturity, any serial
maturity or any periodic debt retirement maturity which originally
was more than ten years shall not be regarded as short-term debt
until such principal amount shall be due or required to be paid
within three years."
ARTICLE THREE
The designation and number of outstanding shares of each class entitled
to vote thereon as a class were as follows:
Class Number of Shares
Common 2,588,000
Preferred 60,000
ARTICLE FOUR
The number of shares of each class voted for and against such amendment,
respectively was:
Class Number of Shares Voted
For Against
Common 2,588,000 None
Preferred 41,534 4,895
Dated 0ct. 13, 1982
WEST TEXAS UTILITIES COMPANY
By: G. H. KING
Vice President
And: Donald A. Shahan
Secretary
STATE OF TEXAS
COUNTY OF TAYLOR
Before me, a notary public, on this day personally appeared
G. H. King, known to me to be the person whose name is subscribed to the
foregoing document and, being by me first duly sworn, declared that the
statements therein contained are true and correct.
Given under my hand and seal of office this 13th day of Oct.,
A.D. 1982.
M. W. HARPER
Notary Public, state of Texas
My commission expires:
10-20-84
(Notarial Seal)
Statement of
Resolution Establishing Series of Shares
To the Secretary of State
of the State of Texas
Pursuant to the provisions of Article 2.13 of the Texas
Business Corporation Act, the undersigned corporation submits the
following statement for the purpose of establishing and designat-
ing a series of shares and fixing and determining the relative
rights and preferences thereof:
1. The name of the corporation is: West Texas Utilities
Company.
2. The following resolution, establishing and designating
a series of shares and fixing and determining the relative
rights and preferences thereof, was duly adopted by a
committee of the Board of Directors of the corporation on
June 6, 1983, which committee was established by resolution
adopted by the Board of
Directors on February 17, 1983:
"RESOLVED, by a committee of the Board of Directors of
West Texas Utilities Company (the "corporation"), such committee
consisting of Messrs. Churchill, King and Hooks, directors of the
corporation, and acting pursuant to authority granted by a resolu-
tion of the Board on February 17, 1983, as permitted by Article 2.36
of the Texas Business Corporation Act:
1. A series of the Preferred Stock of the corporation
is hereby created and established out of the authorized and
unissued shares of the Preferred Stock, par value $100 per share,
of the corporation, said series to consist of 250,000 shares, all
of which shares are hereby authorized to be issued by the corpo-
ration.
2. Said series shall be designated 10.16% Preferred
Stock.
3. The rate of dividend applicable to each of said
shares of said series shall be 10.16% per annum on the par value
thereof.
4. The dividends on the shares of said series shall
be cumulative from the date of issue of said shares.
5. The shares of said series shall be subject to
redemption, in whole at any time or in part from time to time,
upon the notice and in the manner and with the effect provided in
the Restated Articles of Incorporation, as amended, of the corpo-
ration; and the redemption prices applicable to each of the
shares of said series shall be the sum of $100.00, together with
all unpaid dividends thereon accrued to the date of redemption,
and, in addition, a premium of $10.16 per share if redeemed prior
to June 1, 1988; $6.77 per share if redeemed on or after June 1,
1988, and prior to June 1, 1993; $3.39 per share if redeemed on
or after June 1, 1993, and prior to June 1, 1998; and no premium
if redeemed on or after June 1, 1998; provided, that none of the
shares of said series may be redeemed, prior to June 1, 1988, if
such redemption is for the purpose of refunding or is in anticipa-
tion of the refunding of said shares through the use, directly or
indirectly, of funds obtained by the corporation through the
issuance of any shares of Preferred Stock or any other stock
ranking prior to or on a parity with the Preferred Stock, or
through the incurrence of debt by the corporation, at a dividend
or interest cost, as the case may be, less than 10.236% per
annum.
6. In the event of the voluntary liquidation, dissolu-
tion or winding up of the corporation, the amount which the
holders of shares of the 10.16% Preferred Stock then outstanding
shall be entitled to be paid in full, out of the net assets of
the corporation and before any amount shall be paid or distributed
to the holders of shares of the Common stock, shall be the then
effective redemption price of such shares of Preferred Stock as
provided in paragraph 5 above (including an amount equal to the
accrued dividends on such shares), and no more.
7. The shares of said series shall be subject to the
terms, provisions and restrictions set forth in the Restated
Articles of Incorporation, as amended, of the corporation with
respect to the shares of Preferred Stock of the corporation,
shall be of equal rank with and, excepting only as to the rate of
dividend payable thereon, the voluntary liquidation prices and
the redemption prices thereof and the terms and conditions of
-2-
redemption applicable thereto and shall confer rights equal to
the rights conferred by all other shares of Preferred Stock of
the corporation.
8. During each 12 month period ending May 31 in each
year, beginning in 1989, as and for a sinking fund for the shares
of said series the corporation shall, subject to the restrictions
contained in this resolution, redeem and retire 7,500 shares of
said series (being 3% of the number of shares of said series
originally issued) at the sinking fund redemption price of $100
per share plus accrued dividends to the date of redemption (such
required redemptions being hereinafter referred to as the "sinking
fund requirement"). The sinking fund requirement shall be cumula-
tive so that if the corporation shall fail to satisfy in full the
sinking fund requirement in any such 12 month period, the amount
of the deficiency shall be added to the sinking fund requirement
for succeeding 12 month periods until such deficiency shall be
made good. Such deficiency shall be made good as soon as practi-
cable. In the event that the corporation is in arrears in the
sinking fund requirement for any such 12 month period or periods,
and so long as the corporation shall remain in arrears in such
requirement, the corporation may not purchase, redeem or pay
dividends on any of its stock ranking junior to the shares of
said series.
9. The corporation may satisfy the whole or any part
of the sinking fund requirement for any such 12 month period by
cancelling and retiring, prior to the end of such 12 month period,
shares of said series purchased by the corporation or shares of
said series redeemed by the corporation otherwise than pursuant
to paragraph 8 of this resolution.
10. The corporation may redeem through the sinking
fund during any such 12 month period not more than 7,500 additional
shares of said series. Any redemption of such additional shares
so redeemed will not reduce the sinking fund requirement in any
subsequent 12 month period, and the right of the corporation to
apply such additional shares to the sinking fund requirement will
not be cumulative.
11. All shares of said series redeemed or purchased,
including those applied to meet the sinking fund requirement,
shall be cancelled and retired and shall become authorized but
unissued shares of Preferred Stock but may not be reissued as
shares of said series.
12. No shares of said series shall be redeemed to
satisfy the sinking fund requirement unless, at the date such
shares are called for redemption, full dividends on all shares of
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the Preferred Stock of the corporation for all prior periods shall have
been paid or declared and set apart for payment. Nothing contained in
this resolution shall be deemed to require the corporation to redeem or
purchase shares of said series at a time when it may not legally do so."
A true and correct certified copy of the resolution of the Board of
Directors of February 17, 1983, and the resolution of a committee of the
Board of Directors of June 6, 1983, both referred to herein, are
attached hereto as exhibits.
Dated June 8, 1983
WEST TEXAS UTILITIES COMPANY
BY G. H. King
its Vice President
BY Donald A. Shahan
its Secretary
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THE STATE OF TEXAS )
COUNTY OF TAYLOR )
I, Ann Hawk, a Notary Public, do hereby certify that on this 8th
day of June, 1983, personally appeared before me G. H. King, who being
by me first duly sworn, declared that he is a Vice President of West
Texas Utilities Company, that he signed the foregoing document as a Vice
President of the corporation, and that the statements therein contained
are true.
ANN HAWK
Notary Public, Taylor County, Texas
-5-
EXHIBIT D
WEST TEXAS UTILITIES COMPANY
BY THE BOARD OF DIRECTORS
Meeting of February 17, 1983
RESOLUTION
RESOLVED, by the Board of Directors as follows:
1. That this Board hereby authorizes and empowers the proper officers
of the Company to execute and file or cause to be filed the following
documents, and to take such action in the premises as may be required by
law or may be deemed necessary or appropriate in their judgment, and
hereby ratifies any such action heretofore taken, on behalf of the
Company in connection with the proposed issuance and sale by the Company
of up to $25,000,000 principal amount of $100 Par Value Preferred Stock
("Preferred Stock") and up to $25,000,000 either First Mortgage Bonds
("Bonds") or Debentures if the Company is unable to meet minimum
indenture requirements.
(A) A Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission for the registration of the Preferred
Stock and Bonds or Debentures under the Securities Act of 1933, as
amended, pursuant to Rule 415 thereunder;
(B) Appropriate amendments to the Declaration on Form U-1,
heretofore filed with the Securities and Exchange Commission under the
Public Utility Holding Company Act of 1935, as amended, relating to the
issue and sale of the Preferred Stock and Bonds or Debentures, the
1
filing of which Declaration is hereby ratified, confirmed and adopted;
and,
(C) Amendments to such documents and such other documents as may
be required by law or may be deemed necessary or appropriate in their
judgment.
2. That, Glen D. Churchill, Donald A. Shahan, Durwood Chalker, B. J.
Harris, and J. E. Taulbee, and each of them, are hereby appointed
attorneys-in-fact for the Company for the purpose of executing and
filing any such Registration Statement, Form U-1 or any amendment to
either, and the proper officers of the Company are hereby authorized to
execute such documents as may be necessary to evidence such appointment.
3. That it is desirable and in the best interests of the Company that
the Preferred Stock and Bonds or Debentures be qualified for sale in
various states; that the President or any Vice President and the
Secretary or any Assistant Secretary hereby are authorized to determine
the states in which appropriate action shall be taken to qualify for
sale all or any part of the Preferred Stock and Bonds or Debentures as
said officers may deem advisable; that said officers are hereby
authorized to perform on behalf of the Company any and all such acts as
they may deem necessary or advisable in order to comply with the
applicable laws of any such states; and in connection therewith to
execute and file all requisite papers and documents, including but not
limited to applications, reports, surety bonds, irrevocable consents and
appointments of attorneys for service of process; and the execution by
2
such officers of any such paper or document or the doing by them of any
act in connection with the foregoing matters shall conclusively
establish their authority therefore from the Company and the approval
and ratification by the Company of the papers and documents so executed
and the action so taken; provided, however, that nothing contained in
this resolution shall be construed to require the Company to register or
qualify as a foreign corporation in any state or to execute or file any
general consent to service of process under the laws of any state.
4. That, subject to all necessary legal approvals, including the
approval of the Securities and Exchange Commission under the Public
Utility holding Company Act of 1935, as amended, and the approval of the
Pricing Committee of this Board as to certain matters hereinafter
referred to, the proper officers of the Company are hereby authorized
and empowered to take all actions necessary, appropriate or desirable in
their judgment in connection with the proposed issuance and sale by the
Company of the Preferred Stock and Bonds or Debentures in accordance
with the procedures described in the Declaration on Form U-1; and that
the Company invite bids or otherwise solicit offers for the purchase
from it of the Preferred Stock and Bonds or Debentures, such invitation
or solicitation to be made in accordance with the procedures established
by the proper officers of the Company.
5. That the Board hereby authorizes and empowers the proper officers
of the Company to approve the form and provisions of the Underwriting
Agreement, Supplemental Indenture and any related documents necessary
for the issue and sale by the Company of the Preferred Stock and Bonds
3
or Debentures to one or more underwriters (the "Underwriters") to be
selected by the proper officers of the Company pursuant to applicable
legal requirements under the Public Utility Holding Company Act of 1935,
subject, however, to the approval by the Pricing Committee consisting of
Glen D. Churchill, G. H. King, and C. R. Kinard. Glen D. Churchill, G.
H. King, and C. R. Kinard are designated and appointed as a Committee of
this Board (the "Committee"), and Robert H. Alvis, Richard Bacon,
Durwood Chalker, Ralph N. Hooks, C. R. Kinard, Tommy Morris, F. L.
Stephens, or Lloyd D. Vincent are designated as an alternate member of
the Committee to serve should any member be unable to serve at any
meeting of the Committee as to certain matters hereinafter referred to;
and the President, any Vice President of the Company, or the Treasurer,
for and in its name and as its corporate act and deed, is each
authorized and directed to execute the Underwriting Agreement in
substantially such form with such changes in said document as the
officer or officers of the Company executing it shall approve, such
approval to be conclusively evidenced by the execution thereof.
6. That the Pricing Committee of this Board is hereby authorized
(acting by majority vote of the members present and voting) to approve
the acceptance on behalf of the Company of a bid or offer for the
Preferred Stock and Bonds or Debentures, submitted in accordance with
the foregoing, which bid or offer results in the lowest cost of money to
the Company in respect of the Preferred Stock and Bonds or Debentures;
that the Committee is hereby authorized (acting by majority vote of the
members present and voting); (a) to approve the exact principal amount
of Preferred Stock and Bonds or Debentures to be sold from time to time,
4
(b) to approve the dividend rate applicable to such Preferred Stock or
interest rate or rates applicable to such Bonds or Debentures, (c) to
approve the final maturity date or dates of the Bonds or Debentures
(which shall not be less than five nor more than thirty years from their
issuance date), and (d) to approve redemption, sinking fund and other
terms of the Preferred Stock and Bonds or Debentures; and that the
Pricing Committee shall meet upon call by any member thereof and upon
not less than one hour's prior notice (which notice may be given orally
or in writing).
7. That upon the entry by the Company into the Underwriting Agreement,
and pursuant thereto, the Company shall issue, sell and deliver the
Preferred Stock and Bonds or Debentures.
8. That following the acceptance of a bid or offer for the Bonds or
Debentures, the Company shall enter into, execute and deliver a
Supplemental Indenture (the "New Supplemental Indenture"), to in the
case of Bonds, the Harris Trust and Savings Bank (the "Trustee"), as
Trustee under the Company's Bond Indenture dated August 1, 1943, as
amended and supplemented or in the case of Debentures to the Marine
Midland Bank under the Company's Debenture Indenture dated June 1, 1982,
(the "Indenture").
9. That the Pricing Committee is hereby authorized to approve the
definitive engraved form of Preferred Stock and Bonds or Debentures and
the facsimile signatures of the officers of the Company which shall be
impressed, imprinted or reproduced on such definitive Certificate.
5
10. That the Preferred Stock and Bonds or Debentures may be issued by
the Company, at any time or from time to time, and that the proper
officers of the Company are hereby authorized and empowered to execute,
deliver and file such other documents and take such other action on
behalf of the Company as may be necessary or expedient in their judgment
in connection with the foregoing.
11. That the proper officers of the Company are hereby authorized to
execute the Preferred Stock and Bonds or Debentures on behalf of the
Company, by facsimile signatures as provided herein, and to deliver them
for authentication to the Trustees.
12. That Wagstaff, Harrell, Alvis, Stubbeman, Seamster and Longacre of
Abilene, Texas, and Jones, Day, Reavis & Pogue of Dallas, Texas,
attorneys-at-law and counsel for the Company, and Randal G. Meador, an
engineer, are selected and appointed by the Company as counsel and
engineer, respectively, to give or furnish such legal opinions and
engineer's certificates, respectively, as may be required in connection
with the execution, authentication and sale of the Preferred Stock and
Bonds or Debentures.
6
13. The authority, power and duties heretofore granted to and conferred
upon Illinois Stock Transfer Company and The First National Bank of
Chicago, as Transfer Agent and Registrar, respectively, of the shares of
all previous issues of Preferred Stock of the Company, are hereby
extended and made applicable to the issue, upon original issue, or upon
transfer, exchange or reissue, and to the countersignature and
registration by them, respectively, upon such original issue, transfer
or reissue, of certificates for not to exceed 250,000 shares of the
Preferred Stock authorized hereby.
I, Donald A. Shahan, do hereby certify that I am the Secretary of
West Texas Utilities Company, a Texas corporation, hereinafter commonly
referred to as the "Company"; that, as such Secretary, I have in my
custody and possession the corporate records and the seal of the
Company; and as such Secretary, I do hereby further certify that the
attached and foregoing is a true and correct copy of a resolution, as
such resolution appears upon the records of the Company, duly adopted by
the Board of Directors of the Company at a meeting of said Board duly
called and held, in accordance with the By-laws of the Company, on the
17th day of February, 1983, at which meeting a quorum of said Board was
present and voting throughout; and that said resolution is now in full
force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of the Company this 8th day of June, 1983.
Donald A. Shahan
Secretary of
West Texas Utilities Company
7
EXHIBIT E
WEST TEXAS UTILITIES COMPANY
Resolution for Adoption by the Pricing Committee
June 6, 1983
RESOLVED, by a committee of the Board of Directors of
West Texas Utilities Company (the "corporation"), such committee
consisting of Messrs. Churchill, King and Hooks, directors of the
corporation, and acting pursuant to authority granted by a resolu-
tion of the Board on February 17, 1983, as permitted by Article 2.36
of the Texas Business Corporation Act:
1. A series of the Preferred Stock of the corporation
is hereby created and established out of the authorized and
unissued shares of the Preferred Stock, par value $100 per share,
of the corporation, said series to consist of 250,000 shares, all
of which shares are hereby authorized to be issued by the corpo-
ration.
2. Said series shall be designated "10.16% Preferred
Stock".
3. The rate of dividend applicable to each of said
shares of said series shall be 10.16% per annum on the par value
thereof.
4. The dividends on the shares of said series shall
be cumulative from the date of issue of said shares.
5. The shares of said series shall be subject to
redemption, in whole at any time or in part from time to time,
upon the notice and in the manner and with the effect provided in
the Restated Articles of Incorporation, as amended, of the corpo-
ration; and the redemption prices applicable to each of the
shares of said series shall be the sum of $100.00, together with
all unpaid dividends thereon accrued to the date of redemption,
and, in addition, a premium of $10.16 per share if redeemed prior
to June 1, 1988; $6.77 per share if redeemed on or after June 1,
1988, and prior to June 1, 1993; $3.39 per share if redeemed on
or after June 1, 1993, and prior to June 1, 1998; and no premium
if redeemed on or after June 1, 1998; provided, that none of the
shares of said series may be redeemed, prior to June 1, 1988, if
such redemption is for the purpose of refunding or is in anticipa-
tion of the refunding of said shares through the use, directly or
indirectly, of funds obtained by the corporation through the
issuance of any shares of Preferred Stock or any other stock
ranking prior to or on a parity with the Preferred Stock, or
through the incurrence of debt by the corporation, at a dividend
or interest cost, as the case may be, less than 10.236% per
annum.
6. In the event of the voluntary liquidation, dissolu-
tion or winding up of the corporation, the amount which the
holders of shares of the 10.16% Preferred Stock then outstanding
shall be entitled to be paid in full, out of the net assets of
the corporation and before any amount shall be paid or distributed
to the holders of shares of the Common Stock, shall be the then
effective redemption price of such shares of Preferred Stock as
provided in paragraph 5 above (including an amount equal to the
accrued dividends on such shares), and no more.
7. The shares of said series shall be subject to the
terms, provisions and restrictions set forth in the Restated
Articles of Incorporation, as amended, of the corporation with
respect to the shares of Preferred Stock of the corporation,
shall be of equal rank with and, excepting only as to the rate of
dividend payable thereon, the voluntary liquidation prices and
the redemption prices thereof and the terms and conditions of
redemption applicable thereto and shall confer rights equal to
the rights conferred by all other shares of Preferred Stock of
the corporation.
8. During each 12 month period ending May 31 in each
year, beginning in 1989, as and for a sinking fund for the shares
of said series the corporation shall, subject to the restrictions
contained in this resolution, redeem and retire 7,500 shares of
said series (being 3% of the number of shares of said series
originally issued) at the sinking fund redemption price of $100
per share plus accrued dividends to the date of redemption (such
required redemptions being hereinafter referred to as the "sinking
fund requirement"). The sinking fund requirement shall be cumula-
tive so that if the corporation shall fail to satisfy in full the
sinking fund requirement in any such 12 month period, the amount
of the deficiency shall be added to the sinking fund requirement
for succeeding 12 month periods until such deficiency shall be
made good. Such deficiency shall be made good as soon as practi-
cable. In the event that the corporation is in arrears in the
sinking fund requirement for any such 12 month period or periods,
and so long as the corporation shall remain in arrears in such
requirement, the corporation may not purchase, redeem or pay
dividends on any of its stock ranking junior to the shares of
said series.
9. The corporation may satisfy the whole or any part
of the sinking fund requirement for any such 12 month period by
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cancelling and retiring, prior to the end of such 12 month period,
shares of said series purchased by the corporation or shares of
said series redeemed by the corporation otherwise than pursuant
to paragraph 8 of this resolution.
10. The corporation may redeem through the sinking
fund during any such 12 month period not more than 7,500 additional
shares of said series. Any redemption of such additional shares
so redeemed will not reduce the sinking fund requirement in any
subsequent 12 month period, and the right of the corporation to
apply such additional shares to the sinking fund requirement will
not be cumulative.
11. All shares of said series redeemed or purchased,
including those applied to meet the sinking fund requirement,
shall be cancelled and retired and shall become authorized but
unissued shares of Preferred Stock but may not be reissued as
shares of said series.
12. No shares of said series shall be redeemed to
satisfy the sinking fund requirement unless, at the date such
shares are called for redemption, full dividends on all shares of
the Preferred Stock of the corporation for all prior periods
shall have been paid or declared and set apart for payment.
Nothing contained in this resolution shall be deemed to require
the corporation to redeem or purchase shares of said series at a
time when it may not legally do so.
13. The offer to purchase 250,000 shares of the 10.16%
Preferred Stock submitted this day by Drexel Burnham Lambert
Incorporated for themselves and as Managers of t-he other Under-
writers listed in Schedule I to the Underwriting Agreement sub-
mitted by such Managers, for the purchase of said shares from the
corporation at $100 per share plus accrued dividends on such
shares from the date of issue to the date of delivery and payment,
subject to the terms of the Underwriting Agreement referred to
below and at a compensation of $0.74 per share of 10.16% Pre-
ferred Stock, is accepted by the corporation.
14. The action of Donald A. Shahan, Secretary and
Treasurer of the corporation, in (a) accepting on behalf of the
corporation the offer to purchase said shares of 10.16% Preferred
Stock upon the foregoing terms submitted this day by the Under-
writers named above, and (b) executing and delivering a counter-
part or counterparts of the Underwriting Agreement and thereby on
behalf of the corporation entering into an Underwriting Agreement,
is ratified and approved.
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15. The form of stock certificates to represent shares
of said 10.16% Preferred Stock presented to and filed with the
minutes of this meeting is approved in substantially the form
presented; and the facsimile signatures of Glen D. Churchill and
Donald A. Shahan, President and Secretary, respectively, of the
corporation, which are impressed, imprinted or reproduced on said
certificates are approved and adopted by the corporation.
16. The proper officers of the corporation, and each
of them, are hereby directed to execute and deliver other documents
on behalf of the corporation and to take all other actions neces-
sary or appropriate to carry out the purposes of this resolution
and to cause the sale and issuance of the 10.16% Preferred Stock
on the terms indicated above.
I, Donald A. Shahan, Secretary of West Texas Utilities
Company, a Texas corporation, do hereby certify that the above
and foregoing is a true and correct copy of a resolution adopted
by a committee of-the Board of Directors of this Company on
June 6, 1983, and is in full force and effect as of this date
with no changes or alterations of any type.
IN WITNESS WHEREOF, I hereby set my hand and affix the seal
of said corporation this 7th day of June, 1983.
Donald A. Shahan
Secretary
West Texas Utilities Company
-4-
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
WEST TEXAS UTILITIES COMPANY
West Texas Utilities Company (the "corporation"), a corporation
organized and existing by virtue of the laws of the state of Texas,
pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, adopts the following Articles of Amendment to its
Restated Articles of Incorporation:
ARTICLE ONE
The name of the corporation is West Texas Utilities Company.
ARTICLE TWO
The following amendment to the Restated Articles of Incorporation was
adopted by the shareholders of the corporation on February 14, 1984. The
amendment increases from 310,000 shares to 810,000 shares the total
number of shares of Preferred Stock which the corporation is authorized
to issue.
The amendment deletes the first sentence of Article VI of the Restated
Articles of Incorporation, as heretofore amended, and changes it to read
as follows:
The total number of authorized shares of capital stock of
the Corporation is 8,610,000 shares, divided into two
classes, namely: (1) Preferred Stock consisting of
810,000 shares of the par value of $100 each, of which
60,000 shares shall be designated and known as the "4.40%
Cumulative Preferred Stock" and shall constitute a series
of the Preferred Stock and 250,000 shares shall be
designated and known as the "10.16% Cumulative Preferred
Stock" and shall constitute a series of the Preferred
Stock, and (2) Common Stock, consisting of 7,800,000
shares of the par value of $25 each.
ARTICLE THREE
The designation and number of outstanding shares of each class entitled
to vote thereon as a class were as follows:
Class Number of Shares
Common 4,088,560
Preferred 310,000
ARTICLE FOUR
The number of shares of each class that voted for and against such
amendment, respectively, was:
Class Number of Shares Voted
For Against
Common 4,088,560 None
Preferred 232,362 3,893
Dated March 23, 1984
WEST TEXAS UTILITIES COMPANY
By G. D. Churchill
President
And: Donald A. Shahan
Secretary
STATE OF TEXAS )
COUNTY OF TAYLOR )
Before me, a notary public, on this day personally appeared
Glen D. Churchill, known to me to be the person whose name is subscribed
to the foregoing document and, being by me first duly sworn, declared
that the statements therein contained are true and correct.
Given under my hand and seal of office this 23rd day of
March, 1984.
Dianne Vickers
Notary Public, State of Texas
My commission expires:
June 28, 1987
STATEMENT OF RESOLUTION
ESTABLISHING SERIES OF SHARES
To the Secretary of State
of the State of Texas
Pursuant to the provisions of Article 2.13 of the
Texas Business Corporation Act, the undersigned corporation
submits the following statement for the purpose of establishing
and designating a series of shares and fixing and determining
the relative rights and preferences thereof:
1. The name of the corporation is: West Texas
Utilities Company.
2. The following resolution, establishing and
designating a series of shares and fixing and determining the
relative rights and preferences thereof, was duly adopted by a
committee of the Board of Directors of the corporation on
March 6, 1986, which committee was established by resolution
adopted by the Board of Directors on January 10, 1984; and
acting pursuant to the authority granted by such resolutions as
permitted by Article 2.36 of the Texas Business Corporation Act:
RESOLVED, by a committee of the Board of Directors of
West Texas Utilities Company (the "corporation"), such
committee consisting of Messrs. Glen D. Churchill, G. H. King
and Robert H. Alvis, directors of the corporation, and acting
pursuant to authority granted by a resolution of the Board on
January 10, 1984, as permitted by Article 2.36 of the Texas
Business Corporation Act:
1. A series of the Preferred Stock of the
corporation is hereby created and established out of the
authorized and unissued shares of the Preferred Stock, par
value $100 per share, of the corporation, said series to
consist of 250,000 shares, all of which shares are hereby
authorized to be issued by the corporation.
2. Said series shall be designated "7-1/4% Preferred
Stock."
3. The rate of dividend applicable to each of said
shares of said series shall be 7-1/4% per annum on the par
value thereof.
4. The dividends on the shares of said series shall
be cumulative from the date of issue of said shares.
5. The shares of said series shall be subject to
redemption, in whole at any time or in part from time to time,
upon the notice and in the manner and with the effect provided
in the Restated Articles of Incorporation at the following
general redemption prices per share, plus in each case accrued
and unpaid dividends to the date of redemption: $107.25 if
redeemed prior to April 1, 1991; $102.72 if redeemed on or
after April 1, 1991 but prior to April 1, 1992; $101.82 if
redeemed on or after April 1, 1992 but prior to April 1, 1993;
$100.91 if redeemed on or after April 1, 1993 but prior to
April 1, 1994; and $100.00 if redeemed on or after April 1,
1994; provided, that none of the shares of said series may be
redeemed prior to April 1, 1991 if such redemption is for the
purpose of refunding or is in anticipation of the refunding of
said shares through the use, directly or indirectly, of funds
obtained by the corporation through the issuance of any shares
of Preferred Stock or any other stock ranking prior to or on a
parity with the Preferred Stock, or through the incurrence of
debt by the corporation, at a dividend or interest cost, as the
case may be, less than 7.30% per annum.
6. In the event of the voluntary liquidation,
dissolution or winding up of the corporation, the amount which
the holders of shares of the 7-1/4% Preferred Stock then
outstanding shall be entitled to be paid in full, out of the
net assets of the corporation and before any amount shall be
paid or distributed to the holders of shares of the Common
Stock, shall be the then effective redemption price of such
shares of Preferred Stock as provided in paragraph 5 above
(including an amount equal to the accrued dividends on such
shares), and no more.
7. The shares of said series shall be subject to the
terms, provisions and restrictions set forth in the Restated
Articles of Incorporation, as amended, of the corporation with
respect to the shares of Preferred Stock of the corporation,
shall be of equal rank with and, excepting only as to the rate
of dividend payable thereon, the voluntary liquidation prices
and the redemption prices thereof and the terms and conditions
of redemption applicable thereto, shall confer rights equal to
the rights conferred by all other shares of Preferred Stock of
the corporation.
-2-
8. During each 12 month period beginning April 1 in
each year, beginning in 1991, as and for a sinking fund for the
shares of said series the corporation shall, subject to the
restrictions contained in this Resolution, redeem and retire
50,000 shares of said series (being 20% of the number of shares
of said series originally issued) at the sinking fund
redemption price of $100 per share plus accrued dividends to
the date of redemption (such required redemptions being
hereinafter referred to as the "sinking fund requirement").
The sinking fund requirement shall be cumulative so that if the
corporation shall fail to satisfy in full the sinking fund
requirement in any such 12 month period, the amount of the
deficiency shall be added to the sinking fund requirement for
succeeding 12 month periods until such deficiency shall be made
good. Such deficiency shall be made good as soon as
practicable. In the event that the corporation is in arrears
in the sinking fund requirement for any such 12 month period or
periods, and so long as the corporation shall remain in arrears
in such requirement, the corporation may not purchase, redeem
or pay dividends on any of its stock ranking junior to the
shares of said series.
9. The corporation may satisfy the whole or any part
of the sinking fund requirement for any such 12 month period by
cancelling and retiring, prior to the end of such 12 month
period, shares of said series purchased by the corporation or
shares of said series redeemed by the corporation otherwise
than pursuant to paragraph 8 of this Resolution.
10. The corporation may redeem through the sinking
fund during any such 12 month period not more than 50,000
additional shares of said series at the sinking fund redemption
price of $100 per share plus accrued dividends the date of
redemption. Any redemption of such additional shares so
redeemed will not reduce the sinking fund requirement in any
subsequent 12 month period, and the right of the corporation to
apply such additional shares to the sinking fund requirement
will not be cumulative.
11. All shares of said series redeemed or purchased,
including those applied to meet the sinking fund requirement,
shall be cancelled and retired and shall become authorized and
unissued shares of Preferred Stock but may not be reissued as
shares of said series.
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12. No shares of said series shall be redeemed to
satisfy the sinking fund requirement unless, at the date such
shares are called for redemption, full dividends on all shares
of the Preferred Stock of the corporation for all prior periods
shall have been paid or declared and set apart for payment.
Nothing contained in this Resolution shall be deemed to require
the corporation to redeem or purchase shares of said series at
a time when it may not legally do so.
IN WITNESS WHEREOF, the corporation has caused this
Certificate to be signed by Lawrence B. Connors, its Secretary
and Director of Accounting and Finance this 10th day of March
1986.
WEST TEXAS UTILITIES COMPANY
By: L. B. Connors
Secretary and Director of
Accounting and Finance
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To the Secretary of State
of the State of Texas:
Pursuant to the provisions of Article 4.10 of the Texas
Business Corporation Act, the undersigned Corporation submits
the following statement of cancellation by redemption of
redeemable shares of the Corporation.
1. The name of the Corporation is West Texas Utilities
Company.
2. The number of redeemable shares cancelled through the
redemption is 125,000, itemized as follows:
Class Series Number of Shares
Preferred Stock 10.16% Preferred Stock 125,000
3. The aggregate number of issued shares of the
Corporation after giving effect to such cancellation is
5,923,560, itemized as follows:
Class Series Number of Shares
Common Stock N/A 5,488,560
Preferred Stock 4.40% Preferred Stock 60,000
Preferred Stock 7.25% Preferred Stock 250,000
Preferred Stock 10.16% Preferred Stock 125,000
4. The amount of the stated capital of the Corporation
after giving effect to such cancellation is $180,714,000.
Dated June 9, 1987.
WEST TEXAS UTILITIES COMPANY
By Lawrence B. Connors,
Lawrence B. Connors,
Secretary and Director of
Accounting and Finance
5019g
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
WEST TEXAS UTILITIES COMPANY
West Texas Utilities Company (the "corporation"), a corpora-
tion organized and existing by virtue of the laws of the State
of Texas, pursuant to the provisions of Article 4.04 of the
Texas Business Corporation Act, adopts the following Articles
of Amendment to its Restated Articles of Incorporation:
ARTICLE ONE
The name of the corporation is West Texas Utilities Company.
ARTICLE TWO
The following amendment to the Restated Articles of Incorporation
was adopted by the shareholders of the corporation on January
29, 1988. The amendment provides for the limitation of personal
liability of directors to the Corporation or its shareholders.
The amendment is in the form of an addition of Article VII
and reads as follows:
"ARTICLE VII
To the full extent permitted by the Texas Miscellaneous
Corporation Laws Act or any other applicable laws as presently
or hereafter in effect, no director of the Corporation
shall be liable to the Corporation or its shareholders
for monetary damages for or with respect to any acts or
omissions in his or her capacity as a director of the
Corporation, including those acts or omissions which con-
stitute negligence, whether such negligence is sole or
joint and concurrent with the negligence of others. No
amendment to or repeal of this Article VII shall apply
to or have any effect on the liability or alleged liability
of any director of the Corporation for or with respect
to any acts or omissions of such director occurring prior
to such amendment."
ARTICLE THREE
The number of shares of common stock of the corporation
outstanding at the time of such adoption was 5,488,560, and
the number of shares entitled to vote thereon was 5,488,560.
-1-
There were 435,000 shares of preferred stock also outstanding.
only the shares of common stock were entitled to vote.
ARTICLE FOUR
The holders of all of the shares outstanding and entitled
to vote on said amendment have signed a consent in writing
adopting said amendment.
Dated March 7, 1988
WEST TEXAS UTILITIES COMPANY
BY: G. D. Chruchill
President
AND: L. B. Connors
Secretary
THE STATE OF TEXAS x
COUNTY OF TAYLOR x
Before me, a notary public, on this day personally appeared
Glen D. Churchill, known to me to be the person whose name
is subscribed to the foregoing document and, being by me first
duly sworn, declared that the statements therein contained
are true and correct.
Given under my hand and seal of office this 7th day of
March, 1988.
Ann Hawkins
Notary Public, State of Texas
NOTARY'S PRINTED NAME:
ANN HAWKINS
My Commission Expires: 3-2-92
-2-
To the Secretary of State
of the State of Texas:
Pursuant to the provision of Article 4.10 of the Texas Business
Corporation Act, the undersigned Corporation submits the following
statement of cancellation by redemption of redeemable shares of the
Corporation.
1. The name of the Corporation is West Texas Utilities Company.
2. The number of redeemable shares cancelled through the redemption
is 125,000, itemized as follows:
Class Series Number of Shares
Preferred Stock 10.16% Preferred Stock 125,000
3. The aggregate number of issued shares of the Corporation after
giving effect to such cancellation is 5,798,560, itemized as follows:
Class Series Number of Shares
Common Stock N/A 5,488,560
Preferred Stock 4.40% Preferred Stock 60,000
Preferred Stock 7.25% Preferred Stock 250,000
4. The amount of the stated capital of the Corporation after giving
effect to such cancellation is $168,214,000.
Dated August 26, 1988.
WEST TEXAS UTILITIES COMPANY
By L. B. Connors
Lawrence B. Connors,
Secretary and Director of
Accounting and Finance
STATEMENT OF CHANGE OF REGISTERED OFFICE
OR REGISTERED AGENT OR BOTH BY
A PROFIT CORPORATION
1. The name of the corporation is West Texas Utilities Company.
The corporation's charter number is 049483-0.
2. The address of the CURRENT registered office as shown in the
records of the Texas secretary of state is: 1062 N. Third,
Abilene, Texas 79601.
3. The address of the NEW registered office is: 301 Cypress,
Abilene, Texas 79601.
4. The name of the CURRENT registered agent as shown in the
records of the Texas secretary of state is Glen D.
Churchill.
5. The name of the NEW registered agent is Glenn Files.
6. Following the changes shown above, the address of the
registered office and the address of the office of the
registered agent will continue to be identical, as required
by law.
7. The changes shown above were authorized by the board of
directors.
Glenn Files
Glenn Files
President and Chief Executive Officer
West Texas Utilities Company
STATEMENT OF CANCELLATION OF
REDEEMABLE SHARES
To the Secretary of State
of the State of Texas:
Pursuant to the provisions of Article 4.10 of the Texas
Business Corporation Act, the undersigned Corporation submits the
following statement of cancellation by redemption of redeemable
shares of the Corporation.
1. The name of the Corporation is West Texas Utilities
Company.
2. The number of redeemable shares canceled through
redemption is 203,000, itemized as follows:
Class Series Number of Shares
Preferred Stock 7.25% Preferred Stock 203,000
3. The aggregate number of issued shares of the Corporation
after giving effect to such cancellation is 5,595,560, itemized
as follows:
Class Series Number of Shares
Common Stock N/A 5,488,560
Preferred Stock 4.40% Preferred Stock 60,000
Preferred Stock 7.25% Preferred Stock 47,000
4. The amount of the stated capital of the Corporation
after giving effect to such cancellation is $147,914,000.
5. The number of shares which the Corporation has authority
to issue after giving effect to the cancellation is 8,157,000
itemized as follows:
1
Class Series Number of Shares
Common Stock N/A 7,800,000
Preferred Stock 4.40% Preferred Stock 60,000
Preferred Stock 7.25% Preferred Stock 47,000
Preferred Stock Undesignated 250,000
Dated July 28, 1993.
WEST TEXAS UTILITIES COMPANY
By: Joe Lambright
Controller and Treasurer
STATE OF TEXAS )
COUNTY OF TAYLOR )
Before me, a notary public, on this day personally appeared
Joe Lambright, known to me to be the person whose name is
subscribed to the foregoing document and, being by me first duly
sworn, declared that the statements therein contained are true
and correct.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 10th day of
August, 1993.
Martha Murray
Notary Public State of Texas
2
STATEMENT OF CANCELLATION OF
REDEEMABLE SHARES
To the Secretary of State
of the State of Texas:
Pursuant to the provisions of Article 4.10 of the Texas
Business Corporation Act, the undersigned Corporation submits the
following statement of cancellation by redemption of redeemable
shares of the Corporation.
1. The name of the Corporation is West Texas Utilities
Company.
2. The number of redeemable shares canceled through
redemption is 47,000, itemized as follows:
Class Series Number of Shares
Preferred Stock 7.25% Preferred Stock 47,000
3. The aggregate number of issued shares of the Corporation
after giving effect to such cancellation is 5,548,560, itemized
as follows:
Class Series Number of Shares
Common Stock N/A 5,488,560
Preferred Stock 4.40% Preferred Stock 60,000
4. The amount of the stated capital of the Corporation
after giving effect to such cancellation is $143,214,000.
5. The number of shares which the Corporation has authority
to issue after giving effect to the cancellation is 8,110,000
itemized as follows:
1
Class Series Number of Shares
Common Stock N/A 7,800,000
Preferred Stock 4.40% Preferred Stock 60,000
Preferred Stock Undesignated 250,000
Dated August 31, 1994.
WEST TEXAS UTILITIES COMPANY
By: Dennis M. Sharkey
Dennis Sharkey
Vice President-Administration
STATE OF TEXAS )
COUNTY OF TAYLOR )
Before me, a notary public, on this day personally appeared
Dennis Sharkey, known to me to be the person whose name is
subscribed to the foregoing document and, being by me first duly
sworn, declared that the statements therein contained are true
and correct.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 31st day of
August, 1994.
Marie Knight
Notary Public, State of Texas
2
<PAGE>
STATEMENT OF CHANGE OF REGISTERED OFFICE
OR REGISTERED AGENT OR BOTH BY
A CORPORATION
1. The name of the corporation is West Texas Utilities Company.
The corporation's charter number is 049483-0.
2. The address of the registered office as PRESENTLY shown in
the records of the Texas secretary of state is: 301
Cypress, Abilene, Texas 79601.
3. The registered office address will not change.
4. The name of the registered agent as PRESENTLY shown in the
records of the Texas secretary of state is Glenn Files.
5. The name of the NEW registered agent is Floyd Nickerson.
6. Following the change shown above, the address of the
registered office and the address of the office of the
registered agent will continue to be indentical, as required
by law.
7. The change shown above was authorized by the board of
directors.
Floyd Nickerson
President
West Texas Utilities Company
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
WEST TEXAS UTILITIES COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to the Articles of Incorporation:
ARTICLE ONE. The name of the corporation is West Texas Utilities
Company.
ARTICLE TWO. The following amendment to the Articles of Incorporation
was adopted by the shareholders of the corporation on April 28, 1997.
The Articles of Incorporation are hereby amended to delete subparagraph
(B) of paragraph (5) of Article VI which read in its entirety as follows:
(B) issue or assume any unsecured notes, debentures or
other securities representing unsecured indebtedness (herein referred to
as `unsecured obligations'), for any purpose other than (i) the
refunding of outstanding unsecured indebtedness or unsecured obligations
theretofore incurred, issued or assumed by the corporation, or (ii) the
reacquisition, redemption or other retirement of any indebtedness, if
such transaction has been ordered, approved or permitted by the
Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935 or by any successor commission or other regulatory
authority of the United States of America then having jurisdiction in
the premises, or (iii) the reacquisition, redemption or other retirement
of all outstanding shares of the Preferred Stock or of stock ranking
prior to or on a parity with the Preferred Stock, if:
(1) immediately after such issue or assumption, the total principal
amount of all unsecured obligations issued or assumed by the corporation and
then outstanding would exceed (a) 25% of the sum of the total principal amount
of all bonds or other securities representing secured indebtedness issued or
assumed by the corporation and then outstanding and the aggregate amount of the
capital and surplus of the corporation as then stated on the books of account of
the corporation (such sum being hereinafter referred to as
<PAGE>
`total secured debt and capital'), or (b) the principal amount of all unsecured
obligations maturing in less than ten years (herein referred to as `short-term
indebtedness'), issued or assumed by the corporation and then outstanding,
computed as herein provided, would exceed 20% of the total secured debt and
capital; or
(2) immediately after such issue or assumption, the total
principal amount of unsecured obligations would exceed 20% of
total secured debt and capital, and either (a) the total
unsecured debt and capital of the corporation would exceed
$750,000,000, or (b) the sum of the capital and surplus of the
corporation as then stated on the books of account of the
corporation would be less than 40% of the sum of the
corporation's total secured debt and capital and short-term
indebtedness; or
(3) with respect to the period commencing on the earlier
of (a) the date one year after the first day of commercial
operation of the Company's Oklaunion generating station or (b)
January 1, 1989 (the earlier of such dates being hereinafter
referred to as the `Termination Date'), immediately after such
issue or assumption, the principal amount of all unsecured
obligations of the corporation then outstanding would exceed 20%
of total secured debt and capital or the principal amount of all
short-term indebtedness of the corporation then outstanding would
exceed 10% of total secured debt and capital.
For purposes of this subparagraph (B), (i) with respect
to any unsecured obligation originally having a single maturity of more
than ten years, the principal amount of such obligation shall not be
regarded as short-term indebtedness until such principal amount shall be
due or required to be paid within three years and (ii) with respect to
unsecured obligations having serial maturities or having sinking,
purchase or similar periodic debt retirement provisions, the principal
amount of the final maturity, any serial maturity or any periodic debt
retirement maturity which originally was more than ten years shall not
be regarded as short-term debt until such principal amount shall be due
or required to be paid within three years."
ARTICLE THREE. The number of shares of the corporation outstanding at
the time of adoption of the amendment was 5,548,560 and the number of shares
entitled to vote thereon was 5,548,560.
The designation and number of outstanding shares of each class or series
entitled to vote thereon as a class were as follows:
<PAGE>
Number of Shares Outstanding
CLASS OR SERIES AND ENTITLED TO VOTE
Common 5,488,560
Preferred 60,000
ARTICLE FOUR. The number of shares of the corporation voted for the
amendment was 5,532,145 and the number of shares of the corporation voted
against the amendment was 743.
The number of shares of each class or series entitled to vote as a class
or series voted for or against such amendment was as follows:
Number of Shares Number of Shares
CLASS OR SERIES VOTED FOR VOTED AGAINST
Common 5,488,560 0
Preferred 43,585 743
ARTICLE FIVE. The foregoing amendment will not effect a change in the
amount of stated capital of the corporation.
<PAGE>
WEST TEXAS UTILITIES COMPANY
By: Paul J. Brower
Name: Paul J. Brower
Title: General Manager
CENTRAL POWER AND LIGHT COMPANY
AND
THE BANK OF NEW YORK,
AS TRUSTEE
INDENTURE
Dated as of May 1, 1997
Junior Subordinated Debentures
<PAGE>
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
310(a) 7.09
310(b) 7.08
7.10
310(c) Inapplicable
311(a) 7.13
311(c) Inapplicable
312(a) 5.01
5.02(a)
312(b) 5.02(c)
5.02(d)
312(c) 5.02(e)
313(a) 5.04(a)
313(b) 5.04(b)
313(c) 5.04(a)
5.04(b)
313(d) 5.04(c)
314(a) 5.03
314(b) Inapplicable
314(c) 13.06
314(d) Inapplicable
314(e) 13.06
314(f) Inapplicable
315(a) 7.01(a)
7.02
315(b) 6.07
315(c) 7.01
315(d) 7.01(b)
7.01(c)
315(e) 6.08
316(a) 6.06
8.04
316(b) 6.04
316(c) 8.01
317(a) 6.02
317(b) 4.03
318(a) 13.08
<PAGE>
TABLE OF CONTENTS*
Page
RECITALS..................................................................... 1
ARTICLE ONE
Definitions............................... 2
SECTION 1.01 Definitions....................................... 2
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures........ 6
SECTION 2.01 Amount Unlimited; Issuable
in Series......................................... 6
SECTION 2.02 Forms Generally................................... 8
SECTION 2.03 Denominations..................................... 8
SECTION 2.04 Execution, Authentification,
Delivery and Dating............................... 11
SECTION 2.05 Registration, Registration of
Transfer and Exchange............................. 12
SECTION 2.06 Temporary Debentures.............................. 13
SECTION 2.07 Mutilated, Destroyed, Lost
and Stolen Debentures............................. 14
SECTION 2.08 Cancellation by Trustee........................... 15
SECTION 2.09 Benefits of Indenture............................. 15
SECTION 2.10 Authenticating Agent.............................. 15
SECTION 2.11 Global Debenture.................................. 16
SECTION 2.12 Shortening of Stated Maturity..................... 19
SECTION 2.13 CUSIP Numbers......................................19
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions....................... 19
SECTION 3.01 Applicability of Article: Redemption.............. 19
SECTION 3.02 Election to Redeem; Notice to Trustee............. 19
SECTION 3.03 Debentures Payable on Redemption Date............. 21
SECTION 3.04 Applicability of Article:
Sinking Fund...................................... 21
SECTION 3.05 Satisfaction of Sinking Fund
Payment with Debentures........................... 22
SECTION 3.06 Redemption of Debentures for
Sinking Fund...................................... 22
ARTICLE FOUR
Particular Covenants of the Company................................ 22
* This Table of Contents does not constitute part of the Indenture
and should not have any bearing upon the interpretation of any
of its terms or provisions.
<PAGE>
SECTION 4.01 Payment of Principal, Premium
and Interest...................................... 23
SECTION 4.02 Maintenance of Office or Agency................... 23
SECTION 4.03 Money for Debenture Payments to
Be Held in Trust.................................. 23
SECTION 4.04 Maintenance of Trustee............................ 24
SECTION 4.05 Corporate Existence............................... 24
SECTION 4.06 Restriction on Payment of Dividends............... 25
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee......................................... 25
SECTION 5.01 List of Holders................................... 25
SECTION 5.02 Maintenance of List............................... 26
SECTION 5.03 Company Reports................................... 27
SECTION 5.04 Trustee Report.................................... 29
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default....................................... 30
SECTION 6.01 Events of Default; Acceleration,
Rescission and Annulment.......................... 30
SECTION 6.02 Collection of Indebtedness and
Suits for Enforcement by Trustee.................. 33
SECTION 6.03 Application of Money Collected.................... 34
SECTION 6.04 Limitation on Suits............................... 35
SECTION 6.05 Rights and Remedies Cumulative.................... 36
SECTION 6.06 Control by Holders of Securities.................. 36
SECTION 6.07 Notice of Default................................. 37
SECTION 6.08 Undertaking for Costs............................. 38
ARTICLE SEVEN
Concerning the Trustee.......................... 38
SECTION 7.01 Certain Duties and Responsibilities............... 38
SECTION 7.02 Certain Rights of Trustee......................... 40
SECTION 7.03 Not Responsible for Recitals or
Issuance of Debentures............................ 42
SECTION 7.04 May Hold Debentures............................... 42
SECTION 7.05 Money Held in Trust............................... 42
SECTION 7.06 Compensation and Reimbursement.................... 42
SECTION 7.07 Reliance on Officer's Certificate................. 43
SECTION 7.08 Conflicting Interests............................. 43
SECTION 7.09 Corporate Trustee Required; Eligibility........... 44
SECTION 7.10 Resignation and Removal; Appointment
of Successor...................................... 44
SECTION 7.11 Acceptance of Appointment by Successor............ 46
SECTION 7.12 Merger, Conversion or Consolidation............... 47
SECTION 7.13 Collection of Claims Against Company.............. 48
<PAGE>
ARTICLE EIGHT
Concerning the Debentureholders................................. 48
SECTION 8.01 Actions; Record Date.............................. 48
SECTION 8.02 Proof of Action................................... 48
SECTION 8.03 Persons Considered Holders........................ 49
SECTION 8.04 Debentures Held by Company or
Affiliates........................................ 49
SECTION 8.05 Revocation of Action.............................. 50
ARTICLE NINE
Supplemental Indentures.......................... 50
SECTION 9.01 Supplemental Indentures Without
Consent of Holders................................ 50
SECTION 9.02 Supplemental Indentures With Consent
of Holders........................................ 51
SECTION 9.03 Effect of Supplemental Indentures................. 52
SECTION 9.04 Reference in Debentures to
Supplemental Indentures........................... 53
SECTION 9.05 Reliance by Trustee............................... 53
ARTICLE TEN
Consolidation, Merger and Sale............................. 53
SECTION 10.01 Company May Consolidate, etc., on
Certain Terms..................................... 53
SECTION 10.02 Substitution of Successor
Corporation....................................... 54
SECTION 10.03 Reliance by Trustee............................... 55
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys......................................... 55
SECTION 11.01 Satisfaction and Discharge of
Debentures........................................ 55
SECTION 11.02 Satisfaction and Discharge of
Indenture......................................... 56
SECTION 11.03 Delivery of Opinion of Counsel.................... 56
SECTION 11.04 Application of Trust Money........................ 57
SECTION 11.05 Release of Paying Agent........................... 57
SECTION 11.06 Return of Unclaimed Money......................... 57
<PAGE>
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors.............................................. 57
SECTION 12.01 Liability Solely Corporate........................ 57
ARTICLE THIRTEEN
Miscellaneous Provisions.......................... 58
SECTION 13.01 Indenture Binding on Successor
Company........................................... 58
SECTION 13.02 Application of Indenture Provisions
to Successor Company.............................. 58
SECTION 13.03 Notice............................................ 58
SECTION 13.04 Governing Law..................................... 59
SECTION 13.05 Form of Certificate or Opinion
for Trustee....................................... 59
SECTION 13.06 Opinion of Counsel Provided With
Execution of Indenture............................ 59
SECTION 13.07 Distribution Date Not a Business Day.............. 59
SECTION 13.08 Trust Indenture Act Controls...................... 60
SECTION 13.09 Counterparts...................................... 60
SECTION 13.10 Severability...................................... 60
SECTION 13.11 Assignment to Affiliates.......................... 60
SECTION 13.12 Debenture Constitutes Indebtedness................ 60
ARTICLE FOURTEEN
Subordination of Debentures......................... 61
SECTION 14.01 Debentures Subordinate to Senior
Indebtedness...................................... 61
SECTION 14.02 Payment Over of Proceeds of Debentures............ 61
SECTION 14.03 Priority of Senior Indebtedness................... 62
SECTION 14.04 Subrogation....................................... 63
SECTION 14.05 Trustee as Attorney-In-Fact of
Debentureholders for Subordination................ 64
SECTION 14.06 Notice to Trustee to Effectuate
Subordination..................................... 64
SECTION 14.07 Trustee as Holder of Senior Indebtedness;
No Fiduciary Duty to Other Holders
of Senior Indebtedness............................ 65
SECTION 14.08 Rights of Holders of Senior
Indebtedness Not Impaired......................... 66
<PAGE>
THIS INDENTURE, dated as of the first day of May, 1997,
between CENTRAL POWER AND LIGHT COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (hereinafter sometimes referred to
as the "Company"), and THE BANK OF NEW YORK, a New York banking corporation
organized and existing under the laws of the State of New York, as trustee
(hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the
issuance of debentures (hereinafter referred to as the "Debentures"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication
to be borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture; and
WHEREAS, all acts and things necessary to make the Debentures
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed or
will be done and performed prior to the issuance of the Debentures, and the
execution of this Indenture and the issuance hereunder of the Debentures have
been or will be prior to issuance in all respects duly authorized, and the
Company, in the exercise of the legal right and power in it vested, executes
this Indenture and proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar ($1.00) to it duly paid by
the Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee, for the equal
and proportionate benefit (subject to the provisions of this Indenture) of the
respective holders from time to time of the Debentures, without any
discrimination, preference or priority of any one Debenture over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. The terms defined in this Section (except
as in this Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture, any resolution of the
Board of Directors of the Company and of any indenture supplemental hereto shall
have the respective meanings specified in this Section. All other terms used in
this Indenture which are defined in the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") or which are by reference in the Trust Indenture Act
defined in the Securities Act of 1933, as amended (the "Securities Act"),
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in the Trust Indenture
Act and in the Securities Act as in force at the date of the execution of this
instrument.
"Authenticating Agent" shall mean an authenticating agent with
respect to all or any of the series of Debentures, as the case may be, appointed
with respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
"Board of Directors" shall mean the Board of Directors of the
Company, or any committee of such Board duly authorized to act on behalf thereof
hereunder.
"Board Resolution" shall mean 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 and to be in full force and effect on the date
of such certification.
"Business Day" shall mean, with respect to any series of
Debentures, any day other than (i) a Saturday or Sunday or (ii) a day on which
banking institutions in the Borough of Manhattan, the City and State of New York
or any city in which the Trustee's Corporate Trust Office is located, are
authorized or required to close.
"Certificate" shall mean a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company. The Certificate need not comply with the provisions of Section
13.05.
"Corporate Trust Office" shall mean the office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office at the date of the execution of this
Indenture is located at 101 Barclay Street, New York, NY 10286, Attention:
Corporate Trust Trustee Administration.
"Company" shall mean Central Power and Light Company, a
corporation duly organized and existing under the laws of the State of Texas,
and, subject to the provisions of Article Ten, also includes its successors and
assigns.
"Debenture" or "Debentures" shall mean any Debenture or
Debentures, as the case may be, authenticated and delivered under this
Indenture.
"Debentureholder," "holder of Debentures," "registered holder"
or other similar term shall mean the person or persons in whose name or names a
particular Debenture shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debentures of any
series for which the Company shall determine that such Debentures will be issued
as a Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" shall mean, with respect to Debentures of a
particular series, any event specified in Section 6.01, continued for the period
of time, if any, therein designated.
"Fixed Maturity" shall mean when used with respect to any
Debenture or any installment of principal thereof, the date specified pursuant
to the terms of such Debenture as the fixed date on which principal of such
Debenture or such installment of principal is due and payable, as such date may
be shortened as provided pursuant to the terms of such Debenture and this
Indenture.
"Global Debenture" shall mean, with respect to any series of
Debentures, a Debenture executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Governmental Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the specific payment of principal of or interest on the Governmental
Obligation evidenced by such depository receipt.
"Indenture" shall mean this instrument as originally executed,
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Interest Payment Date," when used with respect to any
installment of interest on a Debenture of a particular series, shall mean the
date specified in such Debenture, a Board Resolution or an indenture
supplemental hereto with respect to that series as the fixed date on which an
installment of interest with respect to Debentures of that series is due and
payable.
"Officer's Certificate" shall mean a certificate signed by the
President, General Manager, Treasurer or an Assistant Treasurer, Controller or
an Assistant Controller or the Secretary or an Assistant Secretary of the
Company. Each such certificate shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
"Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be counsel for the Company, reasonably acceptable to
the Trustee. Each such opinion shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
"outstanding", when used with reference to Debentures of any
series, shall mean, subject to the provisions of Section 8.04, as of any
particular time, all Debentures of that series theretofore authenticated and
delivered by the Trustee under this Indenture, except (a) Debentures theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or which have previously been canceled; (b)
Debentures or portions thereof for the payment or redemption of which moneys or
Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent); provided, however, that if such Debentures
or portions of such Debentures are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for giving such
notice; (c) Debentures in lieu of or in substitution for which other Debentures
shall have been authenticated and delivered pursuant to the terms of Section
2.07; and (d) Debentures paid pursuant to Section 2.07.
"Predecessor Debenture" of any particular Debenture shall mean
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by that particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Responsible Officer," when used with respect to the Trustee,
shall mean the chairman of the board of directors, president, any vice
president, secretary, treasurer, any trust officer, any corporate trust officer
or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Senior Indebtedness" of the Company shall mean the principal
of, and premium, if any, and interest on and any other payment due pursuant to
any of the following, whether outstanding at the date of execution of this
Indenture or thereafter incurred, created or assumed: (a) all indebtedness of
the Company evidenced by notes, debentures, bonds or other securities sold by
the Company for money, (b) all indebtedness of others of the kinds described in
the preceding clause (a) assumed by or guaranteed in any manner by the Company
or in effect guaranteed by the Company through an agreement to purchase,
contingent or otherwise, (c) all renewals, extensions or refundings of
indebtedness of the kinds described in either of the preceding clauses (a) and
(b) and (d) any payment of money relating to any lease which is capitalized on
the balance sheet or consolidated balance sheet, as the case may be, of the
Company, in accordance with generally accepted accounting principles as in
effect from time to time, unless, in the case of any particular indebtedness,
renewal, extension, refunding or lease payment, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension, refunding or lease payment
is not superior in right of payment to or is pari passu with the Debentures.
Such Senior Indebtedness shall continue to be Senior Indebtedness and entitled
to the benefits of the subordination provisions set forth in Article Fourteen of
this Indenture irrespective of any amendment, modification or waiver of any term
of such Senior Indebtedness.
"Trustee" shall mean The Bank of New York and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and
if at any time there is more than one person acting in such capacity hereunder,
"Trustee" means each such person. The term "Trustee" as used with respect to a
particular series of the Debentures means the trustee with respect to that
series.
"Trust Indenture Act," subject to the provisions of Sections
9.01, 9.02 and 10.01, shall mean the Trust Indenture Act of 1939, as amended and
in effect at the date of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
SECTION 2.01. The aggregate principal amount of Debentures
which may be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the
aggregate principal amount of Debentures of that series from time to time
authorized by or pursuant to a Board Resolution or pursuant to one or more
indentures supplemental hereto, prior to the initial issuance of Debentures of a
particular series. Prior to the initial issuance of Debentures of any series,
there shall be established in or pursuant to a Board Resolution delivered to the
Trustee, and set forth in an Officer's Certificate delivered to the Trustee, or
established in one or more indentures supplemental hereto:
(1) the title of the Debentures of the series (which
shall distinguish the Debentures of that series from all other
Debentures);
(2) any limit upon the aggregate principal amount of the
Debentures of that series which may be authenticated and delivered
under this Indenture (except for Debentures authenticated and delivered
upon registration of transfer of, in exchange for or in lieu of other
Debentures of that series);
(3) the date or dates on which the principal of the
Debentures of that series is payable or the method of determination
thereof (including any provision for shortening thereof);
(4) the rate or rates at which the Debentures of that
series shall bear interest, if any, or the manner of calculation of
such rate or rates;
(5) the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest will be payable or
the manner of determination of such Interest Payment Dates and the
record dates for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right of the Company, if any, to extend or defer
the interest payment periods and the duration of such extension or
deferral;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Debentures of that series
may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or
purchase Debentures of that series pursuant to any sinking fund or
analogous provisions (including payments made in cash in anticipation
of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which, Debentures of that
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(9) the form of the Debentures of that series, including the
form of the Certificate of Authentication for that series;
(10) if denominations of other than $25 or any integral
multiple thereof, the denominations in which Debentures of that series
shall be issuable;
(11) whether the Debentures are issuable as a Global Debenture
and, in such case, the identity of the Depositary for that series; and
(12) any and all other terms with respect to that series
(which terms shall not be inconsistent with the terms of this
Indenture).
All Debentures of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of that 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 prior to the delivery of the
Officer's Certificate setting forth the terms of that series.
SECTION 2.02. The Debentures of any series and the
Certificate of Authentication to be borne by such Debentures shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution and as set forth in an
Officer's Certificate, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Debentures of that series
may be listed, or to conform to usage.
SECTION 2.03. The Debentures shall be issuable as registered
Debentures and in denominations of $25 or any integral multiple thereof,
subject to Section 2.01(10). The Debentures of a particular series shall bear
interest payable on the dates and at the rate or rates specified with respect to
that series. The principal of and the interest on the Debentures of any series,
as well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America which
at the time is legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, the City
and State of New York (which, unless changed, shall be a Corporate Trust Office
or agency of the Trustee). At the Company's option, payments on the Debentures
of any series may also be made (i) by checks mailed by the Trustee to the
holders entitled thereto at their registered addresses or (ii) to a holder of
$1,000,000 or more in aggregate principal amount of the Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account; provided that, in either case, the
payment of principal with respect to any Debenture will be made only upon
surrender of that Debenture to the Trustee. Each Debenture shall be dated the
date of its authentication. Interest on the Debentures shall be computed on the
basis of a 360-day year composed of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period.
The interest installment on any Debenture which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on that Debenture will be paid upon presentation and surrender of that
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of the same 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
shall be paid by the Company, at its election, as provided in clause (1) or
clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) 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 such Debenture 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
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 not be more than
15 nor 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 Debentureholder at his or her address as it
appears in the Debenture Register (as hereinafter defined), not less
than 10 days prior to 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 such Debentures (or their respective
Predecessor Debentures) are registered on such special record date and
shall be no longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
any Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or
more indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for that series shall mean either the 15th day of the
month immediately preceding the month in which an Interest Payment Date
established for that series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the 15th day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each
Debenture of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Debenture of such series shall carry the
rights to interest accrued and unpaid, and to accrue, that were carried by such
other Debenture.
SECTION 2.04. The Debentures shall, subject to the
provisions of Section 2.06, be printed on steel engraved borders or fully
or partially engraved, or legibly typed, as the proper officers of the Company
may determine, and shall be signed on behalf of the Company by its President or
General Manager, under its corporate seal attested by its Secretary or one of
its Assistant Secretaries. The signature of the President or General Manager
and/or the signature of the Secretary or an Assistant Secretary in attestation
of the corporate seal, upon the Debentures, may be in the form of a facsimile
signature of a present or any future President or General Manager and of a
present or any future Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Debentures and for that purpose the Company may use
the facsimile signature of any person who shall have been a President or General
Manager, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of that person shall have ceased to be
the President or General Manager, or the Secretary or an Assistant Secretary, of
the Company, as the case may be. The seal of the Company may be in the form of a
facsimile of the seal of the Company and may be impressed, affixed,
imprinted or otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and made available for delivery hereunder and that the
holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company for the authentication and delivery of such
Debentures, signed by its President or General Manager and its Treasurer or any
Assistant Treasurer, and the Trustee in accordance with such written order shall
authenticate and make available for delivery such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, (i) an Opinion of Counsel and (ii) an Officer's
Certificate, each stating that the form and terms thereof have been established
in conformity with the provisions of this Indenture. Each Opinion of Counsel and
Officer's Certificate delivered pursuant to this Section 2.04 shall include all
statements prescribed by Section 13.05(b) hereof.
The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this Indenture will, in
the good faith judgment of the Trustee, affect the Trustee's own rights, duties
or immunities under the Debentures and this Indenture or otherwise in a manner
that is not reasonably acceptable to the Trustee.
SECTION 2.05. (a) Debentures of any series may be exchanged
upon presentation thereof at the office or agency of the Company designated
for such purpose in the Borough of Manhattan, the City and State of New York,
for other Debentures of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, all as provided in this Section.
In respect of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall make
available for delivery in exchange therefor the Debenture or Debentures of the
same series which the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office
or agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company, a register
or registers (herein referred to as the "Debenture Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or
agency of the Company designated for such purpose in the Borough of Manhattan,
the City and State of New York, the Company shall execute, the Trustee shall
authenticate and such office or agency shall make available for delivery in the
name of the transferee or transferees a new Debenture or Debentures of the same
series as the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Debenture Registrar) by a written instrument
or instruments of transfer, in form satisfactory to the Company and the
Debenture Registrar, duly executed by the registered holder or by his duly
authorized attorney in writing.
(c) Except as provided in the first paragraph of Section 2.07,
no service charge shall be made for any exchange or registration of transfer of
Debentures, or issue of new Debentures in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
involving any transfer.
(d) The Company shall neither be required (i) to issue,
exchange or register the transfer of any Debentures of any series during a
period beginning at the opening of business 15 days before the day of selection
for redemption of Debentures of that series and ending at the close of business
on the earliest date on which the relevant notice of redemption is deemed to
have been given to all holders of Debentures of that series to be redeemed, nor
(ii) to register the transfer of or exchange any Debentures of any series or
portions thereof called for redemption, except the unredeemed portion of any
Debentures being redeemed in part. The provisions of this Section 2.05 are, with
respect to any Global Debenture, subject to Section 2.11 hereof.
SECTION 2.06. Pending the preparation of definitive
Debentures of any series, the Company may execute, and the Trustee shall
authenticate and make available for delivery, temporary Debentures (printed,
lithographed or typewritten) of any authorized denomination, and substantially
in the form of the definitive Debentures in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company. Every temporary
Debenture of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures of that series in accordance with
the terms of Section 2.04 hereof. Without unnecessary delay the Company will
execute and will furnish definitive Debentures of such series and thereupon any
or all temporary Debentures of that series may be surrendered in exchange
therefor (without charge to the holders), at the office or agency of the Company
designated for the purpose in the Borough of Manhattan, the City and State of
New York, and the Trustee shall authenticate and such office or agency shall
make available for delivery in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures of that series, unless the
Company advises the Trustee to the effect that definitive Debentures need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Debentures of that series shall be entitled to the same
benefits under this Indenture as definitive Debentures of that series
authenticated and made available for delivery hereunder.
SECTION 2.07. In cas e any temporary or definitive Debenture
shall become mutilated or be destroyed, lost or stolen, the Company
(subject to the next succeeding sentence) shall execute, and upon its request
the Trustee (subject as aforesaid) shall authenticate and make available for
delivery, a new Debenture of the same series bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Debenture, or in lieu of and in substitution for the Debenture so destroyed,
lost or stolen. In every case the applicant for a substituted Debenture shall
furnish to the Company and to the Trustee such security or indemnity as may be
required by them to save each of them harmless and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
to the Trustee evidence to their satisfaction of the destruction, loss or theft
of the applicant's Debenture and of the ownership thereof. The Trustee may
authenticate any such substituted Debenture and make available for delivery the
same upon the written order of the Company. Upon the issuance of any substituted
Debenture, 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 the fees and expenses of the Trustee) connected
therewith. In case any Debenture which has matured or is about to mature or has
been called for redemption shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debenture) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as they may require to
save them harmless and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this
Section in substitution for any Debenture which is mutilated, destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the mutilated, destroyed, lost or stolen Debenture shall be found
at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Debentures of the same series duly issued hereunder. All Debentures shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debentures, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.08. All Debentures surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be canceled by it, and no
Debentures shall be issued in lieu thereof except as expressly required or
permitted by any of the provisions of this Indenture. On request of the Company,
the Trustee shall deliver to the Company canceled Debentures held by the
Trustee. In the absence of such request the Trustee may dispose of canceled
Debentures in accordance with its standard procedures. If the Company shall
otherwise acquire any of the Debentures, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.09. Nothing in this Indenture or in the
Debentures, express or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and the holders of
the Debentures, any legal or equitable right, remedy or claim under or in
respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole
benefit of the parties hereto and of the holders of the Debentures.
SECTION 2.10. So long as any of the Debentures of any series
remain outstanding there may be an Authenticating Agent for any or all such
series of Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or partial
redemption thereof, and Debentures 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. All references in this Indenture to
the authentication of Debentures of any series by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently reported
or determined by it, of $50 million, and which is otherwise authorized under
such laws to conduct a trust business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. (a) If the Company shall establish pursuant to
Section 2.01 that the Debentures of a particular series are to be issued as
a Global Debenture, then the Company shall execute and the Trustee shall, in
accordance with Section 2.04, authenticate and make available for delivery, a
Global Debenture which (i) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, all of the Outstanding
Debentures of that series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be made available for delivery by the
Trustee to the Depositary or pursuant to the Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Debenture may be transferred, in
whole but not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05 and except
as set forth in Section 2.11(c) or (d), the Global Debenture of a series may be
transferred, in whole but not in part and in the manner provided in Section
2.05, only to another nominee of the Depositary for that series, a successor
Depositary for that series selected or approved by the Company or a nominee of
that successor Depositary.
(c) (i) Subject to the terms established in one or more
indentures supplemental to this Indenture, an
interest in any Global Debenture shall be
exchangeable at the option of the beneficial owner of
such interest in such Global Debenture for a
definitive Debenture or Debentures registered in the
name of any holder other than the Depositary or its
nominee at any time following issuance of such Global
Debenture.
(ii) A beneficial owner of an interest in any Global
Debenture desiring to exchange such beneficial
interest for a definitive Debenture or Debentures
shall instruct the Depositary, through the
Depositary's direct or indirect participants or
otherwise, to request such exchange on such
beneficial owner's behalf and to provide a written
order containing registration instructions to the
Trustee. Upon receipt by the Trustee of electronic or
written instructions from the Depositary on behalf of
such beneficial owner, the Trustee shall cause, in
accordance with the standing instructions and
procedures existing between the Trustee and the
Depositary, the aggregate principal amount of such
Global Debenture to be reduced by the principal
amount of such beneficial interest so exchanged and
shall appropriately reflect such reduction of the
aggregate principal amount of this Global Debenture
as described in paragraph (iii) of this Section
2.11(c). Following such reduction, the Trustee shall
authenticate and make available for delivery to such
beneficial owner of the transferee, as the case may
be, a definitive Debenture or Debentures previously
executed by the Company as described in Section
2.05(a) and registered in such names and authorized
denominations as the Depositary, pursuant to such
instructions of the beneficial owner, shall instruct
the Trustee.
(iii) Upon any exchange of a portion of any Global
Debenture for a definitive Debenture or Debentures,
the Debenture Registrar shall reflect the reduction
of the principal amount of such Global Debenture by
the principal amount of such beneficial interest so
exchanged on the Debenture Register. Until exchanged
in full for definitive Debentures, such Global
Debenture shall in all respects be entitled to the
same benefits under the Indenture as the definitive
Debentures authenticated and delivered hereunder.
(d) (i) Subject to the terms established in one or more
indentures supplemental to this Indenture, if and so
long as the Debentures of any series are issued as a
Global Debenture, any definitive Debenture or
Debentures of such series shall be exchangeable at
the option of the registered holder thereof for a
beneficial interest in such Global Debenture at any
time following the exchange of such Global Debenture
for such definitive Debenture or Debentures pursuant
to Section 2.11(c).
(ii) A registered holder of a definitive Debenture or
Debentures desiring to exchange such definitive
Debenture or Debentures for a beneficial interest in
such Global Debenture shall instruct the Depositary,
through the Depositary's direct or indirect
participants or otherwise, to request such exchange
on such registered holder's behalf and to provide a
written order containing registration instructions to
the Trustee. Upon receipt by the Trustee of
electronic or written instructions from the
Depositary, and upon presentation to the Trustee of
such definitive Debenture or Debentures, the Trustee
shall cause, in accordance with the standing
instructions and procedures existing between the
Trustee and the Depositary, the aggregate principal
amount of such Global Debenture to be increased by
the principal amount of such definitive Debenture or
Debentures so exchanged and shall appropriately
reflect such increase of the aggregate principal
amount of the Global Debenture as described in
paragraph (iii) of this Section 2.11(d).
(iii) Upon any exchange of a definitive Debenture or
Debentures for a beneficial interest in such Global
Debenture, the Debenture Registrar shall reflect the
increase of the principal amount of such Global
Debenture by the principal amount of such definitive
Debenture or Debentures so exchanged on the Debenture
Register.
(e) If at any time the Depositary for a series of Debentures
notifies the Company that it is unwilling or unable to continue as Depositary
for that series or if at any time the Depositary for that series shall no longer
be registered or in good standing under the Exchange Act or other applicable
statute or regulation and a successor Depositary for that series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer apply to the Debentures of that series and the Company will execute
and, subject to Section 2.05, the Trustee will authenticate and make available
for delivery Debentures of that series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture of that series in exchange for
such Global Debenture. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by a Global
Debenture and that the provisions of this Section 2.11 shall no longer apply to
the Debentures of that series. In that event the Company will execute and,
subject to Section 2.05, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery Debentures of that series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture of such series in
exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture pursuant to this Section 2.11(e) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Debenture Registrar. The Trustee shall make available for delivery such
Debentures to the Depositary for delivery to the persons in whose names such
Debentures are so registered.
SECTION 2.12. If specified as contemplated by Section 2.01
with respect to the Debentures of a particular series, the Company shall
have the right to shorten the maturity of the principal of the Debentures of
such series at any time to any date, provided that, if the Company elects to
exercise its right to shorten the maturity of the principal of the Debentures of
such series, at the time such election is made and at the time of such
shortening, such conditions as may be specified in such Debentures shall have
been satisfied.
SECTION 2.13. The Company in issuing the Debentures 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 Debentures or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debentures, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance with the
terms established for that series pursuant to Section 2.01 hereof.
SECTION 3.02. (a) In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a portion of the
Debentures of any series in accordance with the right reserved so to do, it
shall give notice of such redemption to holders of the Debentures of the series
to be redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before the date fixed
for redemption of that series to such holders at their last addresses as they
shall appear upon the Debenture Register. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any case, failure
duly to give such notice to the holder of any Debenture of any series designated
for redemption in whole or in part, or any defect in the notice, shall not
affect the validity of the proceedings for the redemption of any other
Debentures of that series or any other series. In the case of any redemption of
Debentures prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officer's Certificate evidencing
compliance with any such restriction.
Each such notice of redemption shall specify the CUSIP number,
if any, of Debentures being redeemed, the date fixed for redemption and the
redemption price at which Debentures of that series are to be redeemed, and
shall state that payment of the redemption price of the Debentures to be
redeemed will be made at the office or agency of the Company in the Borough of
Manhattan, the City and State of New York, upon presentation and surrender of
such Debentures, that interest accrued to the date fixed for redemption will be
paid as specified in that notice, that from and after that date interest will
cease to accrue, and that the redemption is for a sinking fund, if such is the
case. If less than all the Debentures of a series are to be redeemed, the notice
to the holders of Debentures of that series to be redeemed shall specify the
particular Debentures to be so redeemed. In case any Debenture is to be redeemed
in part only, the notice which relates to such Debenture shall state the portion
of the principal amount thereof to be redeemed, and shall state that on and
after the redemption date, upon surrender of such Debenture, a new Debenture or
Debentures of that series in principal amount equal to the unredeemed portion
thereof will be issued.
(b) The Company shall give the Trustee at least 45 days'
advance notice of the date fixed for redemption (unless shorter notice shall be
required by the Trustee) as to the aggregate principal amount of Debentures of
the series to be redeemed, and if less than the entire aggregate principal
amount of such series is to be redeemed, thereupon the Trustee shall select, by
lot or in such other manner as it shall deem appropriate and fair in its
discretion and which may provide for the selection of a portion or portions
(equal to $25 or any integral multiple thereof) of the principal amount of such
Debentures of a denomination larger than $25, the Debentures to be redeemed and
shall thereafter promptly notify the Company in writing of the numbers of the
Debentures to be redeemed.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or General
Manager, instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. (a) If the giving of notice of redemption
shall have been completed as above provided, the Debentures or portions of
Debentures of the series to be redeemed specified in such notice shall become
due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for redemption, and interest on such Debentures or portions of Debentures shall
cease to accrue on and after the date fixed for redemption, unless the Company
shall default in the payment of such redemption price and accrued interest with
respect to any such Debenture or portion thereof. On presentation and surrender
of such Debentures on or after the date fixed for redemption at the place of
payment specified in the notice, such Debentures shall be paid and redeemed at
the applicable redemption price for such series, together with interest accrued
thereon to the date fixed for redemption (but if the date fixed for redemption
is an interest payment date, the interest installment payable on such date shall
be payable to the registered holder at the close of business on the applicable
record date pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is
to be redeemed in part only, the Company shall execute, the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Debenture or Debentures of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Debenture so presented.
SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall apply to any sinking fund for the retirement of Debentures of a
series, except as otherwise specified as contemplated by Section 2.01 for
Debentures of that series.
The minimum amount of any sinking fund payment provided for by
the terms of Debentures of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Debentures of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Debentures of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.05. Each sinking fund payment shall be
applied to the redemption of Debentures of any series as provided for by the
terms of Debentures of that series.
SECTION 3.05. The Company (i) may deliver Outstanding
Debentures of a series (other than any previously called for redemption)
and (ii) may apply as a credit Debentures of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Debentures
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Debentures, in each case in satisfaction of all or any part
of any sinking fund payment with respect to the Debentures of such series
required to be made pursuant to the terms of such Debentures as provided for by
the terms of that series; provided that such Debentures have not been previously
so credited. Such Debentures shall be received and credited for such purpose by
the Trustee at the redemption price specified in such Debentures for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking
fund payment date for any series of Debentures, the Company will deliver to
the Trustee an Officer's Certificate specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by delivering and crediting
Debentures of that series pursuant to Section 3.05 and the basis for such credit
and will, together with such Officer's Certificate, deliver to the Trustee any
Debentures to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Debentures to be redeemed upon
such sinking fund payment date in the manner specified in Section 3.02 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 3.02. Such notice having been
duly given, the redemption of such Debentures shall be made upon the terms and
in the manner stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the
Debentures as follows:
SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any) and interest on the
Debentures (subject to the Company's right to extend or defer an Interest
Payment Date) of that series at the time and place and in the manner provided
herein and established with respect to such Debentures.
SECTION 4.02. So long as any series of the Debentures
remains outstanding, the Company agrees to maintain an office or agency in
the Borough of Manhattan, the City and State of New York (which, unless changed,
shall be a corporate trust office or agency of the Trustee), with respect to
each such series and at such other location or locations as may be designated as
provided in this Section 4.02, where (i) Debentures of that series may be
presented for payment, (ii) Debentures of that series may be presented as
hereinabove authorized for registration of transfer and exchange and (iii)
notices and demands to or upon the Company in respect of the Debentures of that
series and this Indenture may be given or served, such designation to continue
with respect to such office or agency until the Company shall, by written notice
signed by its President or General Manager and delivered to the Trustee,
designate some other office or agency for such purposes or any of them. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, 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, notices and demands.
SECTION 4.03. (a) If the Company shall appoint one or more
paying agents, other than the Trustee, for all or any series of the
Debentures, the Company will cause each such paying agent to execute and deliver
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section, that it will:
(1) hold all sums held by it as such agent for the payment of
the principal of (and premium, if any) or interest on the Debentures of
that series (whether such sums have been paid to it by the Company or
by any other obligor of such Debentures) in trust for the benefit of
the persons entitled thereto;
(2) give the Trustee notice of any failure by the Company (or
by any other obligor of such Debentures) to make any payment of the
principal of (and premium, if any) or interest on the Debentures of
that series when the same shall be due and payable;
(3) at any time during the continuance of any failure referred
to in the preceding paragraph (a)(2) above, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by
such paying agent; and
(4) perform all other duties of paying agent as set forth in
in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to any series of the Debentures, it will, on or before each due date of
the principal of (and premium, if any) or interest on Debentures of that series,
set aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding,
(i) the agreement to hold sums in trust as provided in this Section is subject
to the provisions of Section 11.06 and (ii) 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 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 terms and conditions as those upon which 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 sums.
SECTION 4.04. The company, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the manner
provided in Section 7.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
SECTION 4.05. The Company will not, while any of the
Debentures remain outstanding, consolidate with, merge into, merge into
itself or sell or convey all or substantially all of its property to any other
company, unless the provisions of Article Ten hereof are complied with.
SECTION 4.06. If there shall have occurred any event that
would, with the giving of notice or the passage of time, or both,
constitute an Event of Default under the Indenture, or the Company shall have
given notice of its selection of an extended interest payment period as provided
in the Indenture and such period, or any extension thereof, shall be continuing,
the Company will not, until all defaulted interest on the Debentures and all
interest accrued on the Debentures during an extended interest payment period
and all principal and premium, if any, then due and payable on the Debentures
shall have been paid in full, (i) declare, set aside or pay any dividend or
distribution on any capital stock of the Company, except for dividends or
distributions in shares of its capital stock or in rights to acquire shares of
its capital stock, or (ii) repurchase, redeem or otherwise acquire, or make any
sinking fund payment for the purchase or redemption of, any shares of its
capital stock (except by conversion into or exchange for shares of its capital
stock and except for a redemption, purchase or other acquisition of shares of
its capital stock made for the purpose of an employee incentive plan or benefit
plan of the Company or any of its subsidiaries, if any, and except for mandatory
redemption or sinking fund payments with respect to any series of preferred
stock of the Company that are subject to mandatory redemption or sinking fund
requirements, provided that the aggregate stated value of all such series
outstanding at the time of any such payment does not exceed five percent of the
aggregate of (1) the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by the Company and then
outstanding and (2) the capital and surplus of the Company to be stated on the
books of account of the Company after giving effect to such payment); provided,
however, that any moneys deposited in any sinking fund and not in violation of
this provision may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund without regard
to the restrictions contained in this Section.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) on a quarterly basis on each regular record
date (as defined in Section 2.03) a list, in such form as the Trustee may
reasonably require, of the names and addresses of the holders of each series of
Debentures as of such regular record date; provided that the Company shall not
be obligated to furnish or cause to furnish such list at any time that the list
shall not differ in any respect from the most recent list furnished to the
Trustee by the Company 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; provided, however, no such list need be furnished
for any series for which the Trustee shall be the Debenture Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the names and
addresses of the holders of Debentures contained in the most recent list
furnished to it as provided in Section 5.01 and as to the names and addresses of
holders of Debentures received by the Trustee in its capacity as Debenture
Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant owns and has
owned a Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of that series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of Section 5.02(a); or
(2) inform such applicants as to the approximate number of
holders of Debentures of such series or of all Debentures, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee, in accordance with the provisions of
Section 5.02(a), and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other communication, if any,
specified in such application.
(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of that series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of Section 5.02(a), a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Debentures of that series or
of all Debentures, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise, the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent nor any Debenture Registrar shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the holders of Debentures in accordance with the
provisions of Section 5.02(c), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 5.02(c).
SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations. Delivery of such reports, documents and information
to the Trustee under this subsection (b) and Section 5.03(a) 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 the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officer's Certificate).
(c) The Company covenants and agrees to transmit by mail,
first-class postage prepaid, or reputable overnight delivery service which
provides for evidence of receipt, to the Debentureholders, as their names and
addresses appear upon the Debenture Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to Section 5.03(a) and (b)
as may be required by rules and regulations prescribed from time to time by the
Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, on or before September 1 in each calendar year in which any of the
Debentures are outstanding, or on or before such other day in each calendar year
as the Company and the Trustee may from time to time agree upon, a Certificate
as to his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this subsection (d), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
(e) The Company covenants and agrees, during any calendar year
in which original issue discount has accrued on Outstanding Debentures, to file
with the Trustee promptly at the end of each such calendar year a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Debentures as of the end of such year.
SECTION 5.04. (a) On or before November 1 in each year in
which any of the Debentures are outstanding, the Trustee shall transmit by mail,
first-class postage prepaid, to the Debentureholders, as their names and
addresses appear upon the Debenture Register, a brief report dated as of the
preceding September 1, with respect to any of the following events which may
have occurred within the previous 12 months (but if no such event has occurred
within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in paragraphs (1) through (10) of Section 7.08(c);
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debentures, on any
property or funds held or collected by it as Trustee if such advances
so remaining unpaid aggregate more than 1/2 of 1% of the principal
amount of the Debentures outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company, or by any other obligor
on the Debentures, to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held as
collateral security therefor, except any indebtedness based upon a
creditor relationship arising in any manner described in paragraphs
(2), (3), (4) or (6) of Section 7.13(b);
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any release, or release and substitution, of property
subject to the lien, if any, of this Indenture (and the consideration
thereof, if any) which it has not previously reported;
(7) any additional issue of Debentures which the Trustee has
not previously reported; and
(8) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and
which in its opinion materially affects the Debentures or the
Debentures of any series, except any action in respect of a default,
notice of which has been or is to be withheld by it in accordance with
the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first-class postage
prepaid, to the Debentureholders, as their names and addresses appear upon the
Debenture Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Debentures of any series on property
or funds held or collected by it as Trustee, and which it has not previously
reported pursuant to this subsection if such advances remaining unpaid at any
time aggregate more than 10% of the principal amount of Debentures of such
series outstanding at such time, such report to be transmitted within 90 days
after such time.
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Debentures are listed (if so listed) and also
with the Commission. The Company agrees to notify the Trustee when any
Debentures become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. (a) Whenever used herein with respect to
Debentures of a particular series, "Event of Default" means any one or more of
the following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon
any of the Debentures of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 60
days (subject to the Company's right, if any, to extend or defer an
Interest Payment Date pursuant to Section 2.01 hereof);
(2) default in the payment of the principal of (or premium, if
any, on) any of the Debentures of that series as and when the same
shall become due and payable, whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series, and continuance
of such default for a period of 3 days;
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company with respect to that series contained in such Debentures or
otherwise established with respect to that series of Debentures
pursuant to Section 2.01 hereof or contained in this Indenture (other
than a covenant or agreement which has been expressly included in this
Indenture solely for the benefit of one or more series of Debentures
other than such series) for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied and
stating that such notice is a "Notice of Default" hereunder, shall have
been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 33%
in principal amount of the Debentures of that series at the time
outstanding;
(4) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of the Company under the Federal
Bankruptcy Code or any other similar applicable federal or state law,
and such decree or order shall have continued unvacated and unstayed
for a period of 90 days; an involuntary case shall be commenced under
such Code in respect of the Company and shall continue undismissed for
a period of 90 days or an order for relief in such case shall have been
entered; or a decree or order of a court having jurisdiction in the
premises shall have been entered for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of the Company or of its
property, or for the winding up or liquidation of its affairs, and such
decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated
a voluntary bankrupt, shall consent to the filing of a bankruptcy
proceeding against it, shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy Code
or other similar applicable federal or state law, shall consent to the
filing of any such petition or shall consent to the appointment on the
ground of insolvency or bankruptcy of a receiver or custodian or
liquidator or trustee or assignee in bankruptcy or insolvency of it or
of its property, or shall make an assignment for the benefit of
creditors.
(b) In each and every such case, the Company shall file with
the Trustee written notice of the occurrence of any Event of Default within five
Business Days of the Company's becoming aware of any such Event of Default, and
unless the principal of all the Debentures of that series shall have already
become due and payable, either the Trustee or the holders of not less than 33%
in aggregate principal amount of the Debentures of that series then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Debentureholders), may declare the principal of all the Debentures of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything contained in
this Indenture or in the Debentures of that series or established with respect
to that series pursuant to Section 2.01 hereof to the contrary notwithstanding.
(c) The provisions of subsection (b) of this Section, however,
are subject to the condition that if, at any time after the principal of the
Debentures of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debentures of that series and the principal of (and
premium, if any, on) any and all Debentures of that series which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.06, and any and
all defaults under the Indenture, other than the nonpayment of principal on
Debentures of that series which shall not have become due by their terms, shall
have been remedied or, alternatively, waived as provided in Section 6.06, then
and in every such case the Event or Events of Default giving rise to the
declaration of acceleration will, without further act, be deemed to have been
rescinded and annulled; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission
or annulment or for any other reason or shall have been determined adversely to
the Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of interest on any of
the Debentures of a series, and such default shall have continued for a period
of 60 days, or (2) in case default shall be made in the payment of the principal
of (or premium, if any, on) any of the Debentures of a series when the same
shall have become due and payable, and such default shall continue for a period
of 3 days, whether upon maturity of the Debentures of a series or upon
redemption or upon declaration or otherwise, or in any payment required by any
sinking or analogous fund established with respect to that series as and when
the same shall have become due and payable, then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the
Debentures of that series, the whole amount that then shall have become due and
payable on all such Debentures for principal (and premium, if any) or interest,
or both, as the case may be, with interest upon the overdue principal (and
premium, if any) and (to the extent that payment of such interest is enforceable
under applicable law) upon overdue installments of interest at the rate per
annum expressed in the Debentures of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
other obligor upon the Debentures of that series and collect in the manner
provided by law out of the property of the Company or other obligor upon the
Debentures of that series wherever situated the moneys adjudged or decreed to be
payable.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or other
judicial proceedings affecting the Company, any other obligor on such Debentures
or the creditors or property of either, the Trustee shall have power to
intervene in such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law) be entitled
to file such proofs of claim and other papers and documents as may be necessary
or advisable in order to have the claims of the Trustee and of the holders of
Debentures of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of that
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Debentureholders,
to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debentures of
that series, may be enforced by the Trustee without the possession of any of
such Debentures, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or 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 payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of the
Debentures of that series.
In case of an Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law, in
equity, in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize, consent to, accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures of that series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Debentureholder in any such proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant to
Section 6.02 with respect to a particular series of Debentures shall be applied
in the order following, at the date or dates fixed by the Trustee and, in case
of the distribution of such moneys on account of principal (or premium, if any)
or interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of that series for principal (and premium, if any) and
interest, 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 Debentures for
principal (and premium, if any) and interest, respectively; and
THIRD: To the Company.
SECTION 6.04. No holder of any Debenture of any series
shall have any right by virtue or by availing of any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to Debentures of that series specifying such
Event of Default, as hereinbefore provided, and unless also the holders of not
less than 33% in aggregate principal amount of the Debentures of such series
then outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or proceeding;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Debenture of that series with every other such taker and
holder and the Trustee, that no one or more holders of Debentures of that series
shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debentures, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures of that series. For the protection
and enforcement of the provisions of this Section, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Debenture to receive payment of the
principal of (and premium, if any) and interest on such Debenture, as therein
provided, on or after the respective due dates expressed in such Debenture (or
in the case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder.
SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Debentureholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any others thereof or of any
other powers and remedies available to the Trustee or the holders of the
Debentures, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of
any of the Debentures to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed as a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. The holders of a majority in aggregate principal
amount of the Debentures of any series at the time outstanding, determined in
accordance with Section 8.04, 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 that
series; provided, however, that such direction shall not be in conflict with any
rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time outstanding determined in
accordance with Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed might involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of each series at the time outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of
the holders of all of the Debentures of that series waive any past default in
the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on,
any of the Debentures of that series as and when the same shall become due by
the terms of such Debentures or a call for redemption of Debentures of that
series, which default may be waived by the unanimous consent of the holders of
that series so affected. Upon any such waiver, the default covered thereby shall
be deemed to be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debentures of that series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first class postage prepaid, to the holders of Debentures of that series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to that series known to the Trustee, unless such defaults
shall have been cured or waived before the giving of such notice (the term
"defaults" for the purposes of this Section being hereby defined to be the
events specified in subsections (1), (2), (3), (4) and (5) of Section 6.01(a),
not including any grace periods provided for therein and irrespective of the
giving of notice provided for by subsection (3) of Section 6.01(a)); provided,
that, except in the case of default in the payment of the principal of (or
premium, if any) or interest on any of the Debentures of that series or in the
payment of any sinking fund installment established with respect to that series,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
that series; provided further, that in the case of any default of the character
specified in Section 6.01(a)(3) with respect to Debentures of that series, no
such notice to the holders of the Debentures of that series shall be given until
at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under Section 6.01(a)(1) or (a)(2) as long as the
Trustee is acting as paying agent for such series of Debentures or (ii) any
default as to which the Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Indenture shall have
actual knowledge or obtained written notice.
SECTION 6.08. All parties to this Indenture agree, and each
holder of any Debentures by his or her 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 any 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, 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, any suit instituted by any Debentureholder, or group
of Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of
an Event of Default with respect to Debentures of a series and after the curing
of all Events of Default with respect to Debentures of that series which may
have occurred, shall undertake to perform with respect to Debentures of that
series such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a series
has occurred (which has not been cured or waived), the Trustee shall exercise
with respect to Debentures of that series 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 individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) 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) prior to the occurrence of an Event of Default with
respect to Debentures of a series and after the curing and waiving of
all such Events of Default with respect to that series which may have
occurred:
(i) the duties and obligations of the Trustee shall
with respect to Debentures of that series be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable with respect to Debentures of that series except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to Debentures of that series
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 Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision 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 to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(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 the holders of not less than a majority in principal
amount of the Debentures of any series at the time outstanding 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 Trustee under this Indenture with respect to the
Debentures of that series; and
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
or risk personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it.
(c) 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 7.01.
SECTION 7.02. Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, 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;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the President or General
Manager, the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer (unless other evidence in respect thereof is specifically
prescribed herein);
(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) is entitled to receive and may, in
the absence of bad faith on its part, rely upon an Officer's 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 or suffered or
omitted 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, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Debentures (which has not been cured
or waived) to exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) If an Event of Default shall have occurred and be
continuing, the Trustee shall be under no obligation to follow any request,
order or direction of the Company if in the reasonable judgment of the Trustee
the following of such request, order or direction would not be in the best
interests of all the holders;
(g) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
(h) 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, consent, order, approval, bond,
security, or other papers or documents, unless requested in writing to do so by
the holders of not less than a majority in principal amount of the outstanding
Debentures of the particular series affected thereby (determined as provided in
Section 8.04); provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand;
(i) 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; and
(j) Any application by the Trustee for written instructions
from the Company may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action or omission of the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than three
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
SECTION 7.03. (a) The recitals contained herein and in the
Debentures (other than the Certificate of Authentication on the Debentures)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the proceeds of the
Debentures, or for the use or application of any moneys paid over by the Trustee
in accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any paying
agent other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Debenture
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent or Debenture Registrar.
SECTION 7.05. Subject to the provisions of Section 11.06,
all moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
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 moneys received by
it hereunder except such as it may agree with the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, such
compensation as the Company and the Trustee may agree upon in writing (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, damage, claim, liability or expense including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee) incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the termination of this Indenture. Such additional
indebtedness shall be a senior lien to that of the Debentures upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debentures, and the Debentures are
hereby subordinated to each such senior lien.
(c) When the Trustee incurs expenses or renders services in
connection with an Event of Default, the expenses (including the reasonable
charges and expenses of its counsel) and compensation for its services are
intended to constitute expenses of administration under applicable federal or
state bankruptcy, insolvency or similar law.
SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting to take any action hereunder, it shall
be entitled to receive, and such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively provided and
established by an Officer's Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted to be taken by it under the provisions of this Indenture upon the faith
thereof.
SECTION 7.08. If the Trustee has acquired or shall acquire
a conflicting interest within the meaning of the Trust Indenture Act, the
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 Indenture.
SECTION 7.09. There shall at all times be a Trustee with
respect to the Debentures issued hereunder which shall at all times be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or other person permitted to act as trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million dollars, and subject to supervision
or examination by Federal, State, Territorial or District of Columbia 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. The
Company may not, nor may any person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Debentures of one or more
series by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first-class postage prepaid, to the
Debentureholders of that series, as their names and addresses appear upon the
Debenture Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures of that series
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee with
respect to Debentures of that series, or any Debentureholder of that series who
has been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 6.08, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
Section 7.08 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, shall be
adjudged a bankrupt or insolvent, 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, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 6.08, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who has been a bona
fide holder of a Debenture or Debentures 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 and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to that series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Debentures of a series pursuant to
any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Debentures of one or more series or all of
such series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. (a) In case of the appointment hereunder of
a successor trustee with respect to all Debentures, 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, subject
to any prior lien provided for in Section 7.06(b).
(b) In case of the appointment hereunder of a successor
trustee with respect to the Debentures of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Debentures of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which shall (1) 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 Trustee with respect to the
Debentures of that or those series to which the appointment of such successor
trustee relates, (2) 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 Debentures 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) 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, 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 that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; 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, such retiring Trustee shall with respect to the Debentures of that or
those series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, 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 Debentures 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, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee or retiring
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all such 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.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the succession of
such trustee hereunder by mail, first-class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Company fails to transmit such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified under the
provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. In
case any Debentures 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
Debentures so authenticated with the same effect as if such successor Trustee
had itself authenticated such Debentures.
SECTION 7.13. If and when the Trustee shall become a
creditor of the Company (or any other obligor upon the Debentures), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any other obligor upon the
Debentures).
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or specified percentage in aggregate principal amount
of the Debentures of a particular series may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver or
the taking of any other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of that series have
joined therein may be evidenced by any instrument or any number of instruments
of similar tenor executed by such holders of Debentures of that series in person
or by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any
series any request, demand, authorization, direction, notice, consent, waiver or
other action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for that series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01,
proof of the execution of any instrument by a Debentureholder (such proof will
not require notarization) or his, her or its agent or proxy and proof of the
holding by any person of any of the Debentures shall be sufficient if made in
the following manner:
(a) the fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable to
the Trustee;
(b) the ownership of Debentures shall be proved by the
Debenture Register of such Debentures or by a certificate of the
Debenture Registrar thereof; or
(c) the Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal of and premium, if any, and (subject to Section 2.03) interest on
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
SECTION 8.04. At any time the Debentures are held by any
holder other than CPL Capital [I], a Delaware statutory business trust, in
determining whether the holders of the requisite aggregate principal amount of
Debentures of a particular series have concurred in any direction, consent or
waiver under this Indenture, Debentures of that series which are owned by the
Company or any other obligor on the Debentures of that series or by any person
directly or indirectly controlling or controlled by or under common control with
the Company or any other obligor on the Debentures of that series shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Debentures of such series which the Trustee actually knows are so owned shall be
so disregarded. Debentures so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the taking of any
action by the holders of the majority or percentage in aggregate principal
amount of the Debentures of a particular series specified in this Indenture in
connection with such action, any holder of a Debenture of that series which is
shown by the evidence to be included in the Debentures the holders of which have
consented to such action may, by filing written notice with the Trustee, and
upon proof of holding as provided in Section 8.02, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures of a particular
series specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Debentures of that series.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of
the Company contained herein or otherwise established with respect to
the Debentures;
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the holders of the Debentures of all or any series as the Board of
Directors and the Trustee shall consider to be for the protection of
the holders of Debentures of all or any series, and to make the
occurrence, or the occurrence and continuance, of a default in any of
such additional covenants, restrictions, conditions or provisions a
default or an Event of Default with respect to that series permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, however, that in respect of
any such additional covenant, restriction, condition or provision, such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults), may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the holders of
a majority in aggregate principal amount of the Debentures of such
series to waive such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this indenture as shall
not be inconsistent with the provisions of this Indenture and shall not
adversely affect the interests of the holders of the Debentures of any
series; or
(d) 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 Debenture outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee 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.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in
Section 8.01) of the holders of not less than a majority in aggregate principal
amount of the Debentures of each series affected by such supplemental indenture
or indentures at the time outstanding, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debentures of that series under
this Indenture; provided, however, that no such supplemental indenture shall (i)
extend the Fixed Maturity of any Debentures of any series, reduce the principal
amount thereof, reduce the rate or extend the time of payment of interest
thereon or reduce any premium payable upon the redemption thereof, without the
consent of the holder of each Debenture so affected or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each
Debenture then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debentureholders
required to consent thereto as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion but
shall not be obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the
Debentureholders of any series affected thereby under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first-class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to that series, be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Debentures of any series, affected by a
supplemental indenture, authenticated and delivered after the execution of such
supplemental indenture pursuant to the provisions of this Article or of Section
10.01, may bear a notation in form approved by the Company, provided such form
meets the requirements of any exchange upon which such series may be listed, as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
SECTION 9.05. The Trustee, subject to the provisions of
Section 7.01, is entitled to receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof.
ARTICLE TEN
Consolidation, Merger and Sale
SECTION 10.01. Nothing contained in this Indenture or in
any of the Debentures shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or not affiliated
with the Company), or successive consolidations or mergers in which the Company
or its successor or successors shall be a party or parties, or shall prevent any
sale, conveyance, transfer or other disposition of the property of the Company
or its successor or successors as an entirety, or substantially as an entirety,
to any other corporation (whether or not affiliated with the Company or its
successor or successors) authorized to acquire and operate the same; provided,
however, the Company hereby covenants and agrees that, upon any such
consolidation, merger, sale, conveyance, transfer or other disposition, the due
and punctual payment of the principal of (premium, if any) and interest on all
of the Debentures of all series in accordance with the terms of each series,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture with respect to each series
or established with respect to each series pursuant to Section 2.01 to be kept
or performed by the Company, shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act as
then in effect) satisfactory in form to the Trustee executed and delivered to
the Trustee by the entity formed by such consolidation, or into which the
Company shall have been merged, or by the entity which shall have acquired such
property.
SECTION 10.02. (a) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures
of all series outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture or established with respect to each
series of the Debentures pursuant to Section 2.01 to be performed by the Company
with respect to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and thereupon the predecessor corporation shall
be relieved of all obligations and covenants under this Indenture and the
Debentures, except the provisions of Section 7.06 to the extent such provisions
relate to matters occurring before any such consolidation, merger, sale,
conveyance, transfer or other disposition. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Debentures, any or all of
the Debentures issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
successor company, 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 Debentures which previously shall have been
signed and delivered by the officers of the predecessor Company to the Trustee
for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition, such changes in phraseology and form
(but not in substance) may be made in the Debentures thereafter to be issued as
may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other corporation
(whether or not affiliated with the Company).
SECTION 10.03. The Trustee, subject to the provisions of
Section 7.01, is entitled to receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. This Indenture shall upon Company request
cease to be of further effect (except as hereinafter expressly provided), and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(a) both
(1) all Debentures theretofore authenticated and
delivered (other than Debentures which have been destroyed,
lost or stolen and which have been replaced or paid as
provided in Section 2.07 have been delivered to the Trustee
for cancellation; and
(2) all Debentures not theretofore delivered to the
Trustee for cancellation shall be deemed to have been paid in
accordance with Section 11.03;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) 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.
In the event there shall be Debentures of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Debentures of all series as to which it is Trustee and if
the other conditions thereto are met. In the event there shall be two or more
Trustees hereunder, then the effectiveness of each such instrument from each
Trustee hereunder shall be conditioned upon receipt of such instruments from
each other Trustee hereunder.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company under Sections 2.05,
2.06, 2.07, 4.02, 4.03 and 7.06 and this Article Eleven shall survive.
Upon satisfaction and discharge of this Indenture as provided
in this Section, the Trustee shall assign, transfer and turn over to the
Company, subject to the lien provided by Section 7.06, any and all money,
securities and other property then held by the Trustee for the benefit of the
holders of the Debentures other than money and Government Obligations held by
the Trustee pursuant to Section 11.04.
SECTION 11.02. If at any time all such Debentures of a
particular series not heretofore delivered to the Trustee for cancellation or
which have not become due and payable as described in Section 11.01 shall have
been paid by the Company by depositing irrevocably with the Trustee as trust
funds moneys or an amount of Governmental Obligations sufficient to pay at
maturity or upon redemption all such Debentures of that series not theretofore
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity or date fixed
for redemption, as the case may be, and if the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company with respect to that
series, then after the date such moneys or Governmental Obligations, as the case
may be, are deposited with the Trustee: (a) the Company shall be released from
its covenants and other obligations contained in Sections 4.05, 5.03, 10.01,
10.02, and 10.03 and may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant or
obligation, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or obligation or by reason of any reference in any
such covenant or obligation to any other provision of this Indenture or any
other document, and any failure to comply with any such covenant or obligation
shall not constitute a Default or an Event of Default with respect to the
Debentures of such series; (b) the occurrence of any event specified in Section
6.01(a)(3) shall not constitute a Default or an Event of Default with respect to
the Debentures of such series; (c) the Debentures of such series shall
thereafter be deemed not to be "outstanding" solely for purposes of determining
whether the Debentureholders of the requisite aggregate principal amount of
Debentures have concurred in any act under this Indenture with respect to any
covenant or obligation from which the Company has been released pursuant to (a)
above or with respect to any event that shall have ceased to constitute a
Default or Event of Default with respect to Debentures of such series pursuant
to (b) above (or the consequences thereof) provided that the provisions of this
Section 11.02 shall not be deemed to relieve the Company of its obligations with
respect to the payment of the principal of (and premium, if any) or interest on
the outstanding Debentures of such series. The release of the Company from its
obligations under this Indenture, as provided for in this Section 11.02, shall
be subject to the further condition that the Company first shall have caused to
be delivered to the Trustee an Opinion of Counsel to the effect that
Debentureholders of a series with respect to which a deposit has been made in
accordance with this Section 11.02 will not realize income, gain or loss for
federal income tax purposes as a result of such deposit and release, and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and release had not
occurred.
SECTION 11.03. If, in addition to satisfying the conditions
set forth in Section 11.01 or 11.02 (except for the requirement of an Opinion of
Counsel), the Company delivers to the Trustee an Opinion of Counsel to the
effect that (a) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (b) since the date of this Indenture
there has been a change in applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Debentureholders of a series with respect to which a deposit has been made
in accordance with Section 11.01 or 11.02 will not realize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (c) the deposit shall not result
in the Company, the Trustee or the trust being deemed an "investment company"
under the Investment Company Act of 1940, as amended, then, in such event, the
Company will be deemed to have paid and discharged the entire indebtedness on
that series and the holder thereof shall thereafter be entitled to receive
payment solely from the trust fund described above. Notwithstanding the
satisfaction and discharge of any Debentures as aforesaid, the obligations of
the Company in respect of such Debentures under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article Eleven shall survive.
SECTION 11.04. All moneys or Governmental Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in
trust and shall be available for payment as due, either directly or through any
paying agent (including the Company acting as its own paying agent), to the
holders of the particular series of Debentures for the payment or redemption of
which such moneys or Governmental Obligations have been deposited with the
Trustee.
SECTION 11.05. In connection with the satisfaction and
discharge of this Indenture all moneys or Governmental Obligations then held by
any paying agent under the provisions of this Indenture shall, upon demand of
the Company, be paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys or Governmental
Obligations.
SECTION 11.06. Any moneys or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by the Company, in
trust for payment of principal of or premium or interest on the Debentures of a
particular series that are not applied but remain unclaimed by the holders of
such Debentures for at least two years after the date upon which the principal
of (and premium, if any) or interest on such Debentures shall have respectively
become due and payable, shall, upon written notice from the Company, be repaid
to the Company on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Debenture, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such,
of the Company or of any predecessor or successor corporation, either directly
or through the Company or any such predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Debentures or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law, in equity or
by constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
SECTION 13.03. Except as otherwise expressly provided herein,
any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first-class
postage prepaid in a post-office letter box addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Central and South
West Corporation, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202, Attention:
Director, Finance. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 13.04. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of that State,
without regard to the conflicts of laws principles thereof.
SECTION 13.05. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent 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 have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a condition or
covenant in this Indenture (other than the certificate provided pursuant to
Section 5.03(d) of this Indenture) shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (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 such person, he has 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 or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.06. Simultaneously with the execution of this
Indenture, the Company shall deliver to the Trustee an Opinion of Counsel
stating that, in the opinion of such counsel, (a) this Indenture has been duly
authorized by and lawfully executed and delivered on behalf of the Company, is
in full force and effect and is legal, valid and binding upon the Company in
accordance with its terms, except to the extent limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights and (b) the
Debentures have been authorized, executed and delivered by the Company and
constitute legal, valid and binding obligations of the Company in accordance
with their terms.
SECTION 13.07. Except as provided pursuant to Section 2.01
pursuant to a Board Resolution, and as set forth in an Officer's Certificate, or
established in one or more indentures supplemental to this Indenture, in any
case where the date of maturity of interest or principal of any Debenture or the
date of redemption of any Debenture shall not be a Business Day then payment of
interest or principal (and premium, if any) may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.
SECTION 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 3.18(c) of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Debentures of any series shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or of such Debentures, but this Indenture and such Debentures
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
SECTION 13.11. The Company will have the right at all times to
assign any of its rights or obligations under this Indenture to a direct or
indirect wholly-owned subsidiary of the Company; provided that, in the event of
any such assignment, the Company will remain liable for all such obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns. The
Indenture may not otherwise be assigned by the parties thereto.
SECTION 13.12. The parties intend that, for each holder of a
Debenture and each person that acquires a beneficial ownership interest in a
Debenture, such Debentures shall constitute indebtedness for purposes of United
States federal, state and local taxes.
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. The Company covenants and agrees, and each
holder of Debentures issued hereunder by his acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article Fourteen; and each holder of a Debenture, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to be bound by such provisions.
The payment of the principal of and premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 14.02. In the event and during the continuation of
any default in the payment of principal, premium, interest or any payment due on
any Senior Indebtedness continuing beyond the period of grace, if any, specified
in the instrument evidencing such Senior Indebtedness (and the Trustee has
received written notice thereof from the Company or one or more holders of
Senior Indebtedness or their representative or representatives or a trustee),
unless and until such default shall have been cured or waived or shall have
ceased to exist, and in the event that the maturity of any Senior Indebtedness
has been accelerated because of a default (and the Trustee has received written
notice thereof from the Company or one or more holders of Senior Indebtedness or
their representative or representatives or a trustee), then no payment shall be
made by the Company with respect to the principal (including redemption and
sinking fund payments) of or premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any holder when such payment is prohibited
by the preceding paragraph of this Section 14.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
SECTION 14.03. Upon any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution, winding-up,
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all amounts due
or to become due upon all Senior Indebtedness shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before any
payment is made on account of the principal (and premium, if any) or interest on
the Debentures; and upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article Fourteen, shall be paid by the Company, by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, by the holders of the Debentures or by the
Trustee under this Indenture if received by them or it directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee or the holders of the Debentures before all Senior Indebtedness is
paid in full, or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Fourteen, the words, "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, the
payment of which is subordinated at least to the extent provided in this Article
Fourteen with respect to the Debentures to the payment of all Senior
Indebtedness which may at the time be outstanding; provided that (i) the Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article Ten hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 14.03 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article Ten
hereof. Nothing in Section 14.02 or in this Section 14.03 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.06.
SECTION 14.04. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Debentures shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article Fourteen,
and no payment over pursuant to the provisions of this Article Fourteen, to or
for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article Fourteen are
and are intended solely for the purposes of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness on the other hand.
Nothing contained in this Article Fourteen or elsewhere in
this Indenture or in the Debentures is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the holders of the Debentures, the obligation of the Company, which is absolute
and unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article Fourteen, the Trustee, subject to the provision of
Section 7.01, and the holders of the Debentures shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Indebtedness 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 Fourteen.
SECTION 14.05. Each holder of a Debenture by acceptance
thereof authorizes and directs the Trustee in his, her or its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Fourteen and appoints the Trustee his attorney-in-fact
for any and all such purposes.
SECTION 14.06. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
which would prohibit the making of any payment of monies to or by the Trustee or
paying agent in respect of the Debentures pursuant to the provisions of this
Article Fourteen. Notwithstanding the provisions of this Article Fourteen 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 of monies to or by the Trustee or paying agent in respect of the
Debentures pursuant to the provisions of this Article Fourteen, unless and until
a Responsible Officer of the Trustee shall have received written notice thereof
at the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such facts
exist; provided that if the Trustee shall not have received the notice provided
for in this Section 14.06 at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes 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.
The Trustee, subject to the provisions of Section 7.01, shall
be entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
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 Fourteen, 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 14.07. The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Fourteen in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee or any Authenticating Agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Fourteen, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and, subject to the provisions of Section 7.01, the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to holders of Debentures, the Company or any other person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue of
this Article Fourteen or otherwise.
SECTION 14.08. No right of any present or future holder of
any Senior Indebtedness 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 which any such
holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the holders of the Debentures to the holders of
Senior Indebtedness, 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 Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other person.
The Bank of New York, as Trustee, hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions hereinabove
set forth.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:
Wendy G. Hargus, Treasurer
Attest:
By:
Brenda Snider, Secretary
THE BANK OF NEW YORK
as Trustee
By:
Its:
Attest:
By:
Its:
<PAGE>
STATE OF )
) ss.
COUNTY OF )
On May 14, 1997 before me personally appeared Wendy G. Hargus,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument and acknowledged
to me that she executed the same in her authorized capacity, and that by her
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
Witness my hand and official seal.
------------------------------
Signature of Notary Public
My Commission Expires:
<PAGE>
STATE OF )
) ss.
COUNTY OF )
On this day of before me personally appeared proved to me on
the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
Witness my hand and official seal.
---------------------------
Signature of Notary Public
My Commission Expires:
CENTRAL POWER AND LIGHT COMPANY
AND
THE BANK OF NEW YORK,
as Trustee
--------------------
First Supplemental Indenture
Dated as of May 1, 1997
TO
INDENTURE
Dated as of May 1, 1997
--------------------
8.00% Junior Subordinated Deferrable Interest Debentures, Series A
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of the first day of
May, 1997 (the "First Supplemental Indenture"), between CENTRAL POWER AND LIGHT
COMPANY, a corporation duly organized and existing under the laws of the State
of Texas (hereinafter sometimes referred to as the "Company" or "CPL"), and THE
BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter
sometimes referred to as the "Trustee") (under the Indenture dated as of May 1,
1997 between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior subordinated
debentures (the "Debentures"), which Debentures are to be issued from time to
time in such series as may be determined by the Company under the Indenture, in
an unlimited aggregate principal amount which may be authenticated and delivered
thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to be
known as its 8.00% Junior Subordinated Deferrable Interest Debentures, Series A
(such series being hereinafter referred to as the "Series A Debentures"), which
Series A Debentures will be issued to evidence a loan made to the Company of the
proceeds from the issuance by CPL Capital I, a Delaware business trust (the
"Trust"), of preferred undivided beneficial interests in the assets of the Trust
(the "Preferred Securities") and common undivided beneficial interests in the
assets of the Trust (the "Common Securities") pursuant to the terms of an
Amended and Restated Trust Agreement (the "Trust Agreement") dated as of May 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 (the "Administrative Trustees"), which Trust Agreement
shall be substantially in the form attached hereto as Annex A, the form and
substance of such Series A Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this First Supplemental
Indenture; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture,
and all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series A Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form and substance
of the Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
Additional Definitions
SECTION 1.01. For all purposes of this First Supplemental
Indenture, capitalized terms used herein without definition shall have the
meanings specified in the Indenture.
SECTION 1.02. The terms defined in this Section, for all
purposes of this First Supplemental Indenture, shall have the respective
meanings specified in this Section.
"Additional Sums" has the meaning specified in Section 5.05 of
this First Supplemental Indenture.
"Additional Taxes" means the sum of any additional taxes,
duties and other governmental charges to which the Trust has become subject from
time to time as a result of a Tax Event.
"Common Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Distributions" means amounts payable in respect of the
Preferred Securities and Common Securities as provided in the Trust Agreement.
"Extension Period' has the meaning specified in Section 4.01
of this First Supplemental Indenture.
"Guarantee" means the guarantee by the Company of
Distributions on the Preferred Securities of the Trust to the extent provided in
the Guarantee Agreement, substantially in the form attached hereto as Annex B.
"Investment Company Event" means, in respect of the Trust, the
receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a
recognized national tax and securities practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law), the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities of the Trust.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Preferred Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Property Trustee" means, in respect of the Trust, the
commercial bank or trust company identified as the Property Trustee in the Trust
Agreement, solely in its capacity as Property Trustee of the Trust under the
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.
"Special Event" means a Tax Event or an Investment Company
Event.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities of the Trust, there is more than an insubstantial risk that (i) the
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 A Debentures, (ii) interest payable by the
Company on the Series A Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by CPL, in whole or in part, for
United States federal income tax purposes or (iii) the Trust 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" has the meaning specified in the second recital of
this First Supplemental Indenture.
"Trust Agreement" has the meaning specified in the second
recital of this First Supplemental Indenture.
ARTICLE TWO
General Terms and Conditions of
the Series A Debentures
SECTION 2.01. There shall be and is hereby authorized a series
of Debentures designated the "8.00% Junior Subordinated Deferrable Interest
Debentures, Series A," limited in aggregate principal amount to $154,639,200,
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series A Debentures. The Series A Debentures
shall mature and the principal shall be due and payable, together with all
accrued and unpaid interest thereon, on April 30, 2037, provided that the
Company may shorten such maturity date at any time and from time to time at the
election of the Company, but in no event shall such maturity date be earlier
than April 30, 2002, and further provided that if the Company exercises its
right to liquidate the Trust and distribute the Debentures to holders of the
Preferred Securities pursuant to Section 904 of the Trust Agreement, the
maturity date of such Debentures may be shortened to any date selected by the
Company that is (i) no earlier than the date five years after the initial
issuance of the Preferred Securities and (ii) no later than April 30, 2037. The
Series A Debentures shall be issued in the form of registered Series A
Debentures without coupons.
SECTION 2.02. The Series A Debentures shall be issued in
certificated form and registered in the name of the Property Trustee or its
nominee, subject to the exchange of such certificated Series A Debentures for a
Global Debenture as provided in the Trust Agreement. Series A Debentures
represented by a Global Debenture will not be exchangeable for, and will not
otherwise be issuable as, Series A Debentures in certificated form, except as
provided in this First Supplemental Indenture. Principal and interest on the
Series A Debentures will be payable, the transfer of such Series A Debentures
will be registrable and such Series A Debentures will be exchangeable for Series
A Debentures bearing identical terms and provisions at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register or, with respect to a registered holder of
$1,000,000 or more in aggregate principal amount of Series A Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date (as defined in Section 2.03 below) electing to
have payments made by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such designated
account. The Company and the Trustee will act as co-paying agents for the Series
A Debentures. Payments of principal of and interest on the Series A Debentures
issued as a Global Debenture will be made to the Depositary. The Depository
Trust Company (55 Water Street, New York) will initially act as the Depositary
for the Global Debenture.
A Global Debenture shall be exchangeable for Series A
Debentures registered in the names of persons other than the Depositary or its
nominee only if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Debenture and no successor
depositary shall have been appointed, or if at any time the Depositary ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
Global Debenture shall be so exchangeable or (iii) the Global Debenture was
issued pursuant to Section 904 of the Trust Agreement and there shall have
occurred and be continuing an Event of Default with respect to such Global
Debenture and the holders of at least a majority of the beneficial interests in
such Global Debenture advise the Trustee in writing that the continuation of a
book-entry system through the Depositary is no longer in their best interest,
then the Trustee shall notify the Depositary and the Depositary shall notify all
holders of beneficial interests in the Global Debenture of the occurrence of
such event and the availability of Series A Debentures to such holders. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as the
Depositary shall direct.
SECTION 2.03. Each Series A Debenture will bear interest at
the rate of 8.00% per annum from and including the original date of issuance or
from the most recent Interest Payment Date referred to below to which interest
has been paid or duly provided for until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing on June 30, 1997, to the person in whose name such Series A
Debenture or any predecessor Series A Debenture is registered at the close of
business on the Business Day next preceding that Interest Payment Date (each, a
"Record Date"); provided, however, that if the Series A Debentures shall not be
in the form of a Global Debenture, the record date shall be the 15th day of the
month in which the relevant Interest Payment Date occurs. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series A
Debenture (or one or more predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Series A Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Series A
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture; provided, however, that
interest (other than interest described in the next sentence) shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period, unless the Company has elected to make a full or partial
payment of interest accrued on the Series A Debentures on that Interest Payment
Date. Any partial payment of interest accrued on the Series A Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to such registered holders based upon the principal amount of Series A
Debentures then held by such registered holders.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period. In the event that any date on which interest is payable
on the Series A Debentures is not a Business Day, then payment of interest
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 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.
ARTICLE THREE
Redemption of the Series A Debentures
SECTION 3.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A Debentures,
in whole, at any time, or in part, from time to time, on or after April 30,
2002, at a redemption price equal to 100% of the principal amount of Series A
Debentures to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption. If the Series A Debentures are only partially redeemed
pursuant to this Section, the Series A Debentures will be redeemed by lot or by
any other method utilized by the Trustee, such method to be determined solely in
the discretion of the Trustee. The Company may not redeem the Series A
Debentures in part unless all accrued and unpaid interest has been paid in full
on all outstanding Series A Debentures for all interest periods terminating on
or prior to the date of redemption.
SECTION 3.02. If a Special Event in respect of the Trust shall
occur and be continuing, the Company may, at its option, redeem the Series A
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole, but not in part, subject to the provisions of the Indenture. The
redemption price for any Series A Debenture so redeemed shall be equal to 100%
of the principal amount of the Series A Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of redemption.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Subject to Section 4.06 of the Indenture and
Section 5.06 of this First Supplemental Indenture, the Company shall have the
right, at any time during the term of the Series A Debentures, to defer the
payment of interest on such Series A Debentures at any time and from time to
time for a period not to exceed 20 consecutive calendar quarters from the last
Interest Payment Date to which interest was paid in full (but in no event beyond
the maturity of the Series A Debentures) (each, an "Extension Period"), during
which periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of such Extension Period
the Company shall pay all interest then accrued and unpaid thereon. Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions of such Extension Period shall not exceed
20 consecutive quarters or extend beyond the maturity of the Series A
Debentures. No such Extension Period shall end on a date other than an Interest
Payment Date. Upon termination of any such Extension Period and upon the payment
of all accrued and unpaid 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.
SECTION 4.02. The Company shall give the Trustee and the
Administrative Trustees written notice of (i) any election by the Company to
initiate an Extension Period and the duration thereof, (ii) any election by the
Company to extend an Extension Period beyond the Interest Payment Date on which
that Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full or partial
payment of interest accrued on the Series A Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment. In no event
shall such notice by the Company be given less than one Business Day prior to
the earlier of (A) the date the Administrative Trustees are required to give
notice to The New York Stock Exchange or other applicable self-regulatory
organization or to the holders of the Preferred Securities of the record date or
the date Distributions are payable but in any event not less than one Business
Day prior to such record date or (B) one Business Day prior to such date the
Distributions on the Preferred Securities would have been payable except for the
election to begin such Extension Period. Upon receipt of any such notice, the
Trustee shall give written notice of the Company's election by mail to the
Series A Debentureholders within five Business Days. The Company shall make a
public announcement of any such election in accordance with New York Stock
Exchange rules not less than five Business Days prior to such Record Date.
ARTICLE FIVE
Additional Terms Relating to the Preferred Securities
SECTION 5.01. (a) For so long as any Preferred Securities
remain outstanding, if, upon an Event of Default, the Trustee fails or the
holders of not less than 33% in aggregate principal amount of the outstanding
Series A Debentures fail to declare the principal of all of the Series A
Debentures to be immediately due and payable, the holders of at least 33% in
aggregate liquidation preference of the Preferred Securities then outstanding
(determined in accordance with the Trust Agreement) shall have such right by a
notice in writing to the Company and the Trustee; and upon any such declaration
such principal amount of and the accrued interest on all of the Series A
Debentures shall become immediately due and payable (subject to Section 6.01(c)
of the Indenture), provided that the payment of principal and interest on such
Series A Debentures shall remain subordinated to the extent provided in the
Indenture.
(b) For so long as any Preferred Securities remain
outstanding, if, upon an Event of Default, the Trustee fails to proceed to
enforce any right available to the holders of the Series A Debentures for 60
days, the holders of at least 33% in aggregate liquidation preference of the
Preferred Securities then outstanding (determined in accordance with the Trust
Agreement) shall have the right, to the fullest extent permitted by law, to
directly institute proceedings for enforcement of such rights.
(c) For so long as any Preferred Securities remain
outstanding, to the fullest extent permitted by law, upon the occurrence of an
Event of Default described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture,
any holder of Preferred Securities shall have the right to institute a
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on the Series A Debentures having a
principal amount equal to the aggregate liquidation preference of the related
Preferred Securities held by such holder after the due date specified for such
payment in the Series A Debentures.
SECTION 5.02. For so long as any Preferred Securities remain
outstanding, if the holders of a majority in aggregate principal amount of the
Series A Debentures fail to waive an Event of Default in accordance with Section
6.06 of the Indenture, the holders of a majority in aggregate liquidation
preference of the Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) have such right.
SECTION 5.03. For so long as any Preferred Securities remain
outstanding, the Company shall not consolidate with or merge into any other
corporation 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 such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Guarantee and
does not give rise to any breach or violation of the Trust Agreement or the
Guarantee.
SECTION 5.04. For so long as any Preferred Securities remain
outstanding, the Company shall not terminate the Indenture or amend or
supplement the Indenture in any manner that materially adversely affects the
interests of the holders of the Preferred Securities, and subject to Section
6.01(c) of the Indenture, no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective without the prior consent to
such waiver of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) unless and until the principal of the
Series A Debentures and all accrued and unpaid interest thereon have been paid
in full.
SECTION 5.05. In the event that (i) the Trust is the holder of
all of the Outstanding Series A Debentures, (ii) a Tax Event in respect of the
Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Series A Debentures pursuant to Section 3.02 of this First
Supplemental Indenture or (b) terminated the Trust pursuant to Section 902(b) of
the Trust Agreement, the Company shall pay to the Trust (and its permitted
successors or assigns under the Trust Agreement) for so long as the Trust (or
its permitted successor or assignee) is the registered holder of any Series A
Debentures, such additional amounts as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by the Trust on the related Preferred
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 the Indenture or the
Series A Debentures there is a reference in any context to the payment of
principal of or interest on the Series A Debentures, 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 interest pursuant to Section 4.01 of this
First Supplemental Indenture or the Series A Debentures shall not defer the
payment of any Additional Sums that may be due and payable during such interest
payment period.
SECTION 5.06. For so long as any Preferred Securities remain
outstanding, the Company covenants and agrees with each holder of Series A
Debentures issued to the Trust that it will not, and it will not permit any
Subsidiary of the Company to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or junior in
interest to the Series A Debentures or make any guarantee payments with respect
to the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of the Company or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of the Company that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
the Company and then outstanding and (2) the capital and surplus of the Company
to be stated on the books of account of the Company after giving effect to such
payment, provided, however, that any moneys deposited in any sinking fund and
not in violation of this provision may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by the Company with respect to any securities of a
subsidiary of the Company, provided that the proceeds from the issuance of such
securities were used to purchase Debentures of any series) if at such time (i)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) the Company shall have given notice of its election to begin an Extension
Period as provided herein and shall not have rescinded such notice, or such
period, or any extension thereof, shall be continuing.
SECTION 5.07. For so long as any Preferred Securities remain
outstanding, the Company also covenants with each holder of Series A Debentures
issued to the Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
the Trust, except (a) in connection with a distribution of the Series A
Debentures to the holders of Preferred Securities in liquidation of the Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to remain classified as a "grantor trust" and not to be classified as an
association taxable as a corporation for United States federal income tax
purposes.
ARTICLE SIX
Form of Series A Debenture
The Series A Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be issued as a Global Debenture,
insert--This Debenture is a Global Debenture 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 Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture 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, or to a successor Depositary or
to a nominee of such successor Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture 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.]
No.___________ $__________
CENTRAL POWER AND LIGHT COMPANY
8.00%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
CENTRAL POWER AND LIGHT COMPANY, a corporation duly organized
and existing under the laws of the State of Texas (herein referred to as the
"Company", which term includes any successor corporation under the Indenture),
for value received, hereby promises to pay to _____________________ or
registered assigns, the principal sum of $154,639,200, on April 30, 2037, or on
such earlier date as the Company may elect subject to the terms of Section 2.01
of the First Supplemental Indenture and to pay interest on such principal sum
from and including May 14, 1997 or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing on June 30, 1997, at the rate of
8.00% per annum, until the principal hereof shall have become due and payable,
and on any overdue principal and premium, if any, and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months and, for any period shorter than a full calendar
month, on the basis of the actual number of days elapsed in such period. In the
event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of 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 such date. 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 Debenture (or one or more Predecessor
Debentures, as defined in the Indenture) is registered at the close of business
on the Business Day next preceding that Interest Payment Date (each a "Record
Date"); provided, however, that if this Debenture shall not be in the form of a
Global Debenture the record date shall be the 15th day of the month in which the
relevant Interest Payment Date occurs. Any such interest installment not
punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the registered holder on the relevant Record
Date, and may be paid to the person in whose name this Debenture (or one or more
Predecessor Debentures) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered holders of this series
of Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may then be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture hereinafter referred to; provided, however, that
interest shall not be considered payable by the Company on any Interest Payment
Date falling within an Extension Period (as defined below), unless the Company
has elected to make a full or partial payment of interest accrued on this
Debenture on that Interest Payment Date. Any partial payment of interest accrued
on this series of Debentures on any Interest Payment Date falling within an
Extension Period shall be paid pro rata to the registered holder of this
Debenture based upon the principal amount of this Debenture in relation to the
aggregate principal amount of all Debentures of this series then outstanding.
The principal of (and premium, if any) and the interest on this Debenture shall
be payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, in any coin or currency of the
United States of America which at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the registered
holder at such address as shall appear in the Debenture Register or, with
respect to a registered holder of $1,000,000 or more in aggregate principal
amount of Debentures who has delivered a written request to the Trustee at least
14 days prior to the relevant Interest Payment Date electing to have payments
made by wire transfer to a designated account in the United States, by wire
transfer of immediately available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee its attorney-in-fact for
any and all such purposes. Each holder hereof, by its acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
CENTRAL POWER AND LIGHT COMPANY
By
Wendy G. Hargus, Treasurer
Attest:
Marilyn Kirkland, Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee or as Authenticating Agent
By
Authorized Signatory
<PAGE>
(REVERSE)
8.00% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
(continued)
This Debenture is one of a duly authorized series of
debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture (as defined below), all issued or to be issued in one
or more series under and pursuant to an Indenture dated as of May 1, 1997 duly
executed and delivered between the Company and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (herein referred to as the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of May 1, 1997 between
the Company and the Trustee (such Indenture as so supplemented being hereinafter
referred to as the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. By the terms of the
Indenture, the Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Debentures is limited in aggregate principal amount as
specified in the First Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Debentures of this series at the
option of the Company, without premium or penalty, in whole or in part at any
time and from time to time on or after April 30, 2002 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount of the
Debentures of this series to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption. If the Debentures of this series are
only partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures of this series will be redeemed by lot or by any other method
utilized by the Trustee, such method to be determined solely in the discretion
of the Trustee.
If a Special Event in respect of the Trust shall occur and be
continuing, the Company may, at its option, redeem this Debenture at any time
within 90 days of the occurrence of such Special Event, in whole, but not in
part, subject to the provisions of the Indenture. The redemption price for any
Debenture of this series so redeemed shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such redemption.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Debentures of
this series shall have occurred and be continuing, the principal of all of the
Debentures of this series may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of the Debentures of this series upon compliance by
the Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails or the holders of not less than
33% in principal amount of the outstanding Debentures of this series fail to
declare the principal of all of the Debentures of this series to be immediately
due and payable, the holders of at least 33% in aggregate liquidation preference
of the Preferred Securities then outstanding (determined in accordance with the
related Trust Agreement) shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures of this series shall become
immediately due and payable (subject to Section 6.01(c) of the Indenture),
provided that the payment of principal and interest on such Debentures shall
remain subordinated to the extent provided in the Indenture.
For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
For so long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series A Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series A
Debentures.
No reference herein to the Indenture and no provision of this
Debenture 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 Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to the provisions of the Indenture, the Company shall
have the right, at any time during the term of this series of Debentures, to
defer the payment of interest on this series of Debentures at any time and from
time to time for a period not to exceed 20 consecutive calendar quarters from
the last Interest Payment Date to which interest was paid in full (but in no
event beyond the maturity of the Series A Debentures) (each, an "Extension
Period") during which periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of such
Extension Period the Company shall pay all interest then accrued and unpaid
thereon. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions of such Extension Period
shall not exceed 20 consecutive quarters or extend beyond the maturity of the
Series A Debentures. Upon termination of any such Extension Period and upon the
payment of all accrued and unpaid interest then due, the Company may select 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.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If the Debenture is to be issued as a Global Debenture,
insert--This Global Debenture is exchangeable for Debentures in certificated
form only under certain limited circumstances set forth in the Indenture.] The
Debentures of this series are issuable in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE SEVEN
Original Issue of Series A Debentures
Series A Debentures in the aggregate principal amount of
$154,639,200 may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Debentures to or upon the written order of the Company, signed by its
Chairman, President, Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
the form of Series A Debenture that are defined in the Indenture shall have the
several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:
Wendy G. Hargus, Treasurer
THE BANK OF NEW YORK, as Trustee
By:
Its:
AMENDED AND RESTATED
TRUST AGREEMENT
among
CENTRAL POWER AND LIGHT 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 May 1, 1997
CPL CAPITAL I
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
Section 101. Definitions...................................... 2
ARTICLE II
Establishment of the Trust
Section 201. Name............................................. 11
Section 202. Office of the Delaware Trustee; Principal
Place of Business................................ 11
Section 203. Initial Contribution of Trust Property;
Organizational Expenses.......................... 11
Section 204. Issuance of the Preferred Securities............. 12
Section 205. Issuance of the Common Securities; Subscription
and Purchase of Debentures....................... 12
Section 206. Declaration of Trust............................. 12
Section 207. Authorization to Enter into Certain Transactions. 13
Section 208. Assets of Trust.................................. 17
Section 209. Title to Trust Property.......................... 17
ARTICLE III
Payment Account
Section 301. Payment Account.................................. 17
ARTICLE IV
Distributions; Redemption
Section 401. Distributions.................................... 17
Section 402. Redemption....................................... 18
Section 403. Subordination of Common Securities............... 20
Section 404. Payment Procedures............................... 21
Section 405. Tax Returns and Reports.......................... 21
Section 406. Payment of Taxes, Duties, Etc. of the Trust...... 22
ARTICLE V
Trust Securities Certificates
Section 501. Initial Ownership................................ 22
Section 502. The Trust Securities Certificates................ 22
Section 503. Execution and Delivery of Trust Securities
Certificates..................................... 22
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.......................... 24
Section 506. Persons Deemed Securityholders................... 24
Section 507. Access to List of Securityholders' Names and
Addresses........................................ 24
Section 508. Maintenance of Office or Agency.................. 25
Section 509. Appointment of Paying Agent...................... 25
Section 510. Ownership of Common Securities by Depositor...... 26
Section 511. Book-Entry Preferred Securities Certificates;
Common Securities Certificate.................... 26
Section 512. Notices to Clearing Agency....................... 27
Section 513. Definitive Preferred Securities Certificates..... 27
Section 514. Rights of Securityholders........................ 28
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 601. Limitations on Voting Rights..................... 29
Section 602. Notice of Meetings............................... 30
Section 603. Meetings of Preferred Securityholders............ 30
Section 604. Voting Rights.................................... 31
Section 605. Proxies, etc..................................... 31
Section 606. Securityholder Action by Written Consent......... 31
Section 607. Record Date for Voting and Other Purposes........ 32
Section 608. Acts of Securityholders.......................... 32
Section 609. Inspection of Records............................ 33
ARTICLE VII
Representations and Warranties
Section 701. Representations and Warranties of the Bank and
the Property Trustee............................. 33
Section 702. Representations and Warranties of the Delaware
Bank and the Delaware Trustee.................... 34
Section 703. Representations and Warranties of Depositor...... 35
ARTICLE VIII
The Trustees
Section 801. Certain Duties and Responsibilities.............. 36
Section 802. Certain Notices.................................. 38
Section 803. Certain Rights of Property Trustee............... 38
Section 804. Not Responsible for Recitals or Issuance of
Securities....................................... 40
Section 805. May Hold Securities.............................. 40
Section 806. Compensation; Indemnity; Fees.................... 40
Section 807. Corporate Property Trustee Required; Eligibility
of Trustees...................................... 41
Section 808. Conflicting Interests............................ 42
Section 809. Co-Trustees and Separate Trustee................. 42
Section 810. Resignation and Removal; Appointment of
Successor........................................ 43
Section 811. Acceptance of Appointment by Successor........... 45
Section 812. Merger, Conversion, Consolidation or Succession
to Business...................................... 45
Section 813. Preferential Collection of Claims Against
Depositor or Trust............................... 46
Section 814. Reports by Property Trustee...................... 46
Section 815. Reports to the Property Trustee.................. 46
Section 816. Evidence of Compliance with Conditions Precedent. 47
Section 817. Number of Trustees............................... 47
Section 818. Delegation of Power.............................. 47
Section 819. Voting........................................... 48
ARTICLE IX
Termination, Liquidation and Merger
Section 901. Termination Upon Expiration Date................. 48
Section 902. Early Termination................................ 48
Section 903. Termination...................................... 48
Section 904. Liquidation...................................... 49
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust........................ 50
ARTICLE X
Miscellaneous Provisions
Section 1001. Limitation of Rights of Securityholders.......... 51
Section 1002. Amendment........................................ 52
Section 1003. Separability..................................... 53
Section 1004. Governing Law.................................... 53
Section 1005. Payments Due on Non-Business Day................. 53
Section 1006. Successors....................................... 53
Section 1007. Headings......................................... 54
Section 1008. Reports, Notices and Demands..................... 54
Section 1009. Agreement Not to Petition........................ 54
Section 1010. Trust Indenture Act; Conflict with Trust
Indenture Act.................................... 55
Section 1011. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture.......................... 55
Section 1012. Counterparts..................................... 56
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities
<PAGE>
CPL CAPITAL I
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
ss. 310 (a)(1)........................................... 807
(a)(2)........................................... 807
(a)(3)........................................... 809
(a)(4)........................................... 207(a)(ii)
(b).............................................. 808
ss. 311 (a).............................................. 813
(b).............................................. 813
ss. 312 (a).............................................. 507
(b).............................................. 507
(c).............................................. 507
ss. 313 (a).............................................. 814(a)
(a)(4)........................................... 814(b)
(b).............................................. 814(b)
(c).............................................. 1008
(d).............................................. 814(c)
ss. 314 (a).............................................. 815
(b).............................................. Not Applicable
(c)(1)........................................... 816
(c)(2)........................................... 816
(c)(3)........................................... Not Applicable
(d).............................................. Not Applicable
(e).............................................. 101, 816
ss. 315 (a).............................................. 801(a), 803(a)
(b).............................................. 802, 1008
(c).............................................. 801(a)
(d).............................................. 801, 803
(e).............................................. Not Applicable
ss. 316 (a).............................................. Not Applicable
(a)(1)(A)........................................ Not Applicable
(a)(1)(B)........................................ Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. Not Applicable
(c).............................................. 607
ss. 317 (a)(1)........................................... Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. 509
ss. 318 (a).............................................. 1010
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 1, 1997,
among (i) Central Power and Light Company, a Texas corporation (including any
successors or assigns, the "Depositor"), (ii) The Bank of New York, a New York
banking corporation duly organized and existing under the laws of the State of
New York, as property trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) The Bank of New York (Delaware), a Delaware banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee," and, in its separate corporate capacity and not
in its capacity as Delaware Trustee, the "Delaware Bank") (iv) Wendy G. Hargus,
an individual, and R. Russell Davis, an individual, each of whose address is c/o
Central Power and Light Company (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 (v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee, and Wendy G. Hargus, as Administrative Trustee (the "Prior
Administrative Trustee") have heretofore duly declared and established a
business trust pursuant to the Delaware Business Trust Act by the entering into
of that certain Trust Agreement, dated as of January 23, 1997 (the "Original
Trust Agreement"), and by the execution and filing by the Delaware Trustee, the
Property Trustee and the Prior Administrative Trustee with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on January 24,
1997, the form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property
Trustee and the Prior Administrative Trustee desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of an additional Administrative Trustee;
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 101. 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;
(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 608.
"ADDITIONAL AMOUNT" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of additional
interest accrued on interest in arrears and paid by the Depositor on a Like
Amount of Debentures for such period.
"ADDITIONAL SUMS" has the meaning specified in Section 5.05 of
the First Supplemental Indenture.
"ADMINISTRATIVE TRUSTEE" means each of Wendy G. Hargus and R.
Russell Davis, solely in his capacity as Administrative Trustee of the Trust
formed and continued hereunder and not in his 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 adjudging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of or in respect of such Person under the United States
Bankruptcy Code or any other similar applicable Federal or State law,
and the continuance of any such decree or order unvacated and unstayed
for a period of 90 days; or the commencement of an involuntary case
under the Federal Bankruptcy Code in respect of such Person, which shall
continue undismissed for a period of 90 days or entry of an order for
relief in such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and such
decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such
Person of a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or other similar
applicable Federal or State law, or the consent by such Person to the
filing of any such petition or to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or
trustee or assignee in bankruptcy or insolvency of such Person or of its
property, or shall make a general assignment for the benefit of
creditors.
"BANKRUPTCY LAWS" has the meaning specified in Section 1009.
"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 appropriate Trustee.
"BOOK ENTRY PREFERRED SECURITIES CERTIFICATES" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 511.
"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 Depositor 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.
"CERTIFICATE OF TRUST" means the certificate of trust filed with
the Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. 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 date of execution and delivery of this
Trust Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"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 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.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"CORPORATE TRUST OFFICE" means the principal corporate trust
office of the Property Trustee or Debenture Trustee, as the case may be, at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Amended and Restated
Trust Agreement is located at 101 Barclay Street, 21W, New York, New York 10286.
"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 TAX EVENT" means a "Tax Event" as defined in the
Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, a New York
banking corporation organized under the laws of the State of New York and any
successor thereto, as trustee under the Indenture.
"DEBENTURES" means the $154,639,200 aggregate principal amount of
the Depositor's 8.00% Junior Subordinated Deferrable Interest Debentures, Series
A, 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 511(a)
and (b) Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.
"DELAWARE BANK" has the meaning specified in the preamble to this
Trust Agreement.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (ss.) 3801, ET SEQ., as it may be amended from time to
time.
"DELAWARE TRUSTEE" means the commercial bank or trust company
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.
"DEPOSITOR" has the meaning specified in the preamble to this
Trust Agreement.
"DISTRIBUTION DATE" has the meaning specified in Section 401(a).
"DISTRIBUTIONS" means amounts payable in respect of the Trust
Securities as provided in Section 401.
"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 of which or the breach of which is dealt with in clause (b)
or (c), above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 33% in
aggregate liquidation preference 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
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"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 901.
"EXTENSION PERIOD" has the meaning specified in Section 4.01 of
the First Supplemental Indenture.
"FIRST SUPPLEMENTAL INDENTURE" means the First Supplemental
Indenture dated as of May 1, 1997 between the Depositor and the Debenture
Trustee, as Trustee.
"GLOBAL DEBENTURE" has the meaning specified in the Indenture.
"GUARANTEE" means the Guarantee Agreement executed and delivered
by the Depositor and The Bank of New York, as trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"INDENTURE" means the Indenture, dated as of May 1, 1997, as
supplemented by the First Supplemental Indenture, between the Depositor and the
Debenture Trustee, as trustee, as amended or supplemented from time to time.
"INVESTMENT COMPANY EVENT" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
"investment company" that is required to be registered under the 1940 Act, which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.
"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 and 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 termination or liquidation 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 termination and
liquidation of the Trust pursuant to Section 904(a).
"LIQUIDATION DISTRIBUTION" has the meaning specified in Section
904(d).
"1940 ACT" means the Investment Company Act of 1940, as amended.
"OFFICER'S CERTIFICATE" means a certificate signed by the
President, a General Manager, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the appropriate Trustee. The officer signing an
Officer's Certificate given pursuant to Section 816 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the
Officer's Certificate;
(c) a statement that the 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 the 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, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
"ORIGINAL TRUST AGREEMENT" has the meaning specified in the
recitals to this Trust Agreement.
"OUTSTANDING", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, EXCEPT:
(a) Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Preferred 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 Preferred
Securities; PROVIDED that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(c) Preferred 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 504, 505, 511 and 513;
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 such Trustee 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
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 509 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
trust department 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 shall make payments to the Securityholders in accordance with Sections
401 and 402.
"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
that a Person is a Holder of Preferred Securities, substantially in the form
attached as Exhibit E.
"PROPERTY TRUSTEE" means the commercial bank or trust company
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 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
810.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the
respective meanings specified in Section 504.
"SECURITYHOLDER" or "HOLDER" means a Person in whose name a Trust
Security or Trust Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act. If such Person is the Clearing Agency or its nominee, this shall not
prevent the Owners from having an undivided beneficial interest in the assets of
the Trust.
"TAX EVENT" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under this Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges.
"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 all exhibits hereto, including,
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
amended, 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 Guarantee, (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 trusts 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, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated
as of May 8, 1997, among the Trust, the Depositor and the Underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 201. NAME.
The Trust created and continued hereby shall be known as "CPL
Capital 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.
Section 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
c/o The Bank of New York (Delaware), 23 White Clay Center, Newark, Delaware
19711, Attention: Corporate Trust Administration, 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 c/o Central Power and Light Company, 539 North Carancahua Street, Corpus
Christi, Texas 78401-2802.
Section 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.
The Trustees acknowledge 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.
Section 204. ISSUANCE OF THE PREFERRED SECURITIES.
On April 30, 1997 the Depositor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver in accordance with the
Underwriting Agreement Preferred Securities Certificates, registered in the name
of the nominee of the initial Clearing Agency, in an aggregate amount of
6,000,000 Preferred Securities having an aggregate Liquidation Amount of
$150,000,000, against receipt of the aggregate purchase price of such Preferred
Securities of $150,000,000, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee.
Section 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
185,568 Common Securities having an aggregate Liquidation Amount of $4,639,200
against payment by the Depositor of such amount. 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 Property Trustee on
behalf of the Trust and having an aggregate principal amount equal to
$154,639,200, 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 $154,639,200.
Section 206. 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 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.
Section 207. 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 and Article VIII,
and in accordance with the following provisions (i) and (ii), the
Administrative Trustees shall have the authority to enter into all
transactions and agreements determined by the Administrative Trustees to
be appropriate in exercising the authority, express or implied,
otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including
without limitation, the following:
(i) As among the Trustees, each Administrative Trustee,
acting singly or jointly, shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) 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 or documents as may
be necessary or desirable in connection with the purposes
and function of the Trust;
(C) assisting 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;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges 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;
(E) the sending of 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;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) 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 Holders of the Preferred
Securities or to enable the Trust to effect the purposes
for which the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative 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 power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and
any other payments made in respect of the Debentures in
the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default, the taking of 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 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);
(J) registering transfers of the Trust
Securities in accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 207(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 fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes, (iv) incur any indebtedness
for borrowed money or issue any other debt or (v) take or consent
to any action that would result in the placement of a Lien on any
of the Trust Property. 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.
(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 in furtherance of the following prior to the date of
this Trust Agreement are hereby ratified and confirmed in all
respects):
(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, among other securities, the Preferred
Securities and the Debentures, 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, the Debentures
and the Guarantee and to do any and all such acts, other
than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take
on behalf of the Trust, and prepare for execution and
filing 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) 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 other organizations for listing upon notice
of issuance of any Preferred Securities or Debentures, if
applicable, and to file or cause an Administrative
Trustee to file thereafter with such exchange or
organization such notifications and documents as may be
necessary from time to time;
(iv) 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 or Debentures,
if applicable, under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the
execution and delivery of, 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, will be classified as a
"grantor trust" and not as an association taxable as a
corporation 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, subject to Section 1002, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such
purposes.
Section 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
Section 209. 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 for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 301. 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 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 401. DISTRIBUTIONS.
(a) 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 May 14, 1997,
and, except during any Extension Period with respect to the Debentures, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on June 30, 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) with the same force and effect as if made on such date (each date on
which distributions are payable in accordance with this Section 401(a) a
"Distribution Date").
(b) The Trust Securities represent undivided beneficial interests
in the Trust Property, and, as a practical matter, the Distributions on the
Trust Securities shall be payable at a rate of 8.00% per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions payable
for any full 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 the number of days elapsed in a 360-day year of twelve
30-day months. During any Extension Period with respect to the Debentures,
Distributions on the Preferred Securities will be deferred for a period equal to
the Extension Period. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely 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
immediately available in the Payment Account for the payment of such
Distributions.
(d) 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 and, if the Preferred Securities
are in book-entry form and registered to the Clearing Agency or its nominee,
will be paid by the Clearing Agency or its nominee to the Owners thereof, on the
relevant record date, which shall be one Business Day prior to 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 date 15
days prior to the relevant Distribution Date.
Section 402. 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. The
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. 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 total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(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.
(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 immediately available 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 402(c), the Property Trustee will, so
long as the Preferred Securities are in book-entry-only form, deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and 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 402(c), will 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 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, and such
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 accrue, 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 on the relevant record date, which shall be one
Business Day prior to 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 date fifteen days prior to the relevant
Redemption Date.
(f) Subject to Section 403(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 on a PRO RATA basis 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 such method (including,
without limitation, by lot) 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 which has been or is to be redeemed.
Section 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Sums, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; 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 Sums, 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 Sums, 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 Sums,
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 a 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 shall have been cured, waived
or otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities shall have 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 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Sums, 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 between the
Property Trustee and the Common Securityholder.
Section 405. 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 required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee 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 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Sums, the
Property Trustee at the direction of an Administrative Trustee or Depositor
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.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 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 502. 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 Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual 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 504, 511
and 513.
Section 503. 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 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, General Manager, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
Section 504. 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 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as 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 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee 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
508, the Administrative Trustees or any one of them shall execute 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 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.
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 508.
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 the Property 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 the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.
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 505. 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 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 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent 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. Nothing in this provision shall be
construed to prevent the Owners from having an undivided beneficial interest in
the assets of the Trust.
Section 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall furnish
or cause to be furnished (a) to the Property Trustee, semi-annually on or before
January 15 and July 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 the most recent Record Date 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 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 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in The City of New
York, 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 principal corporate trust office of the Property Trustee, 101
Barclay Street, New York, NY 10286, as the principal corporate trust office for
such purposes. The Administrative Trustees shall give prompt written notice to
the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 509. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from
the Payment Account and if the Preferred Securities are held in book-entry form
and registered to the Clearing Agency or its nominee, the Clearing Agency or its
nominee will in turn make Distributions to the Owners thereof, and the Paying
Agent 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 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 Property Trustee, and any co-paying agent chosen by the
Property Trustee, 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 Property Trustee 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
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 801, 803 and 806 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than a
transfer in connection with a merger or consolidation of the Depositor into
another corporation or transfer of assets substantially as an entirety pursuant
to Section 10.01 of the Indenture) shall be void. The Administrative Trustees
shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 511. 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 or held on behalf of The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Book-Entry 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 beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 513. Unless and
until Definitive Preferred Securities Certificates have been issued to
beneficial owners pursuant to Section 513:
(i) the provisions of this Section 511(a) shall be in
full force and effect;
(ii) the Securities Registrar, the Paying Agent 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 Book-Entry
Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities and shall have no obligations to deal with the Owners
thereof;
(iii) to the extent that the provisions of this Section
511 conflict with any other provisions of this Trust Agreement,
the provisions of this Section 511 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 513, 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.
Any Clearing Agency designated pursuant hereto will not be deemed
an agent of the Trustees for any purpose.
(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 512. 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
513, 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 513. 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 Property Trustee in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of the Owners of Preferred Securities Certificates, then the Property
Trustee shall notify the Clearing Agency, 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 Property Trustee 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 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 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
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 514. 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
209, and the Securityholders and/or Owners shall not have any right or title
therein other than the rights 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. When issued and delivered to Holders of the Preferred Securities against
payment of the purchase price therefor, the Preferred Securities will be fully
paid and nonassessable interests in the Trust. 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.
(b) (i) 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 33% in principal amount of the outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 33% in Liquidation Amount
of the Preferred Securities then Outstanding shall have such right 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 and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.
(ii) The provisions of subsection (b)(i), however, are
subject to the condition that if, at any time after such 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 provided
in the Indenture, the Depositor shall pay or shall deposit with
the Debenture Trustee a sum sufficient to pay all amounts
required to be paid pursuant to Section 6.01(c) of the Indenture
with respect to a rescission and annulment of such a declaration
and any and all Events of Default with respect to the Debentures,
other than nonpayment of principal on Debentures which shall have
not have become due by their terms, shall have been remedied or
waived as provided in Section 6.06 of the Indenture, then the
Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Depositor and the Debenture
Trustee, may rescind and annul such declaration and its
consequences, but no such rescission and annulment shall extend
to or shall affect any subsequent default, or shall impair any
right consequent thereon.
(c) For so long as any Preferred Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails to proceed to
enforce any right available to the Holders of the Debentures for 60 days, the
Holders of at least 33% in Liquidation Amount of the Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of such rights.
(d) For so long as any Preferred Securities remain Outstanding,
to the fullest extent permitted by law, upon the occurrence of a Debenture Event
of Default specified in Section 6.01(a)(1) or 6.01(a)(2) of the Indenture, any
Holder of Preferred Securities shall have the right to institute a proceeding
directly against the Depositor for enforcement of payment to such Holder of the
principal of or interest on Debentures having a principal amount equal to the
Liquidation Amount of the Preferred Securities of such Holder after the due date
specified for such payment in the Debentures. Except as set forth in Section
514(b), (c) and (d), 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.
(e) The Depositor will be subrogated to the rights of the Holder
of the Preferred Securities to the extent of any payment made by the Depositor
to any such Holder of Preferred Securities pursuant to Section 514(c) or (d)
hereof.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 514, 810 and
1002 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,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Article Six 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 Outstanding 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 the Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the Outstanding Preferred Securities. The Property Trustee shall
notify each Holder of the Outstanding 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 the Trust will continue to be classified as a
"grantor trust" and not as an association taxable as a corporation for United
States federal income tax purposes on account of such action.
(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, winding-up or termination 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. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
cease to be classified as a "grantor trust" or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
Section 602. 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 1008 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 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
33% of the Preferred Securities (based upon their aggregate 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 the Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate 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 aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 604. 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 605. 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 taken. 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 606. 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 aggregate 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 (based upon their aggregate Liquidation
Amount).
Section 607. 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 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 608. 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
801) conclusive in favor of the Trustees, if made in the manner provided in this
Section.
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.
Whether a Person is a Holder of Preferred 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.
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 Guarantee
Trustee (as defined in the Guarantee), the Trust or any Person.
Section 609. 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.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each Successor Property Trustee at
the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
Successor Property Trustee in its separate corporate capacity) hereby represents
and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York;
(b) the Bank 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) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it 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;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Property Trustee and does not
require any approval of stockholders of the Bank and such execution, delivery
and performance will not (i) violate the Bank's charter or by-laws, (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 Bank 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 New York , as the case may be, governing the banking or trust
powers of the Bank or the Property Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein or therein 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 Bank
or the Property Trustee, as the case may be, under the laws of the United States
or the State of New York; and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the Bank or the
Property 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 to enter into or perform its obligations as
one of the Trustees under this Trust Agreement.
Section 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK
AND THE DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on
behalf of and as to itself, as of the date hereof, and each Successor Delaware
Trustee at the time of the Successor Delaware Trustee's acceptance of
appointment as Delaware Trustee hereunder (the term "Delaware Bank" being used
to refer to such Successor Delaware Trustee in its separate corporate capacity),
hereby represents and warrants (as applicable) for the benefit of the Depositor
and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(b) the Delaware Bank 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) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it 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;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Delaware Trustee and does not
require any approval of stockholders of the Delaware Bank and such execution,
delivery and performance will not (i) violate the Delaware Bank's charter or
by-laws, (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 Delaware Bank 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 Delaware Bank or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein 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
Delaware Bank or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the Delaware Bank
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 Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 703. 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 Administrative 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 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 Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 801. 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, no provision of this
Trust Agreement shall require the Trustees to expend or risk 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 their rights or powers, if 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.
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 Administrative 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 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 801(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) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) 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;
(ii) 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;
(iii) 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;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree 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 301 and except to the extent
otherwise required by law; and
(v) 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
negligence, default or misconduct of the Administrative Trustees
or the Depositor.
Section 802. CERTAIN NOTICES.
(a) Within 15 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, 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. For
purposes of this Section the term "Event of Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in Section 1008, notice
of the Depositor's election to begin or further extend an Extension Period on
the Debentures (unless such election shall have been revoked) within the time
specified for transmitting such notice to the holders of the Debentures pursuant
to the Indenture.
Section 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(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
or (ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with 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 Officer's 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 Officer's
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 filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its Affiliates) 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, such counsel
may be counsel to the Depositor or any of its Affiliates, and may include any of
its employees; 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;
(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 recklessness with respect to 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 of the Trust Securities
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; and
(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.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property 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 the Property 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 Property Trustee shall be
construed to be a duty.
Section 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
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 805. 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 808 and 813 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 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to such
Trustee's negligence, bad faith or willful misconduct (or, in the case
of the Administrative Trustees, any such expense, disbursement or
advance as may be attributable to his or her gross negligence, bad faith
or willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any loss, damage,
claims, liability, penalty or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance
or administration of this Trust 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.
No Trustee may claim any lien or charge on any Trust Property as
a result of any amount due pursuant to this Section 806.
Section 807. 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 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, 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
that shall act through one or more persons authorized to bind such entity.
Section. 808. CONFLICTING INTERESTS.
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.
Section 809. 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 shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor shall for
such purpose join with the Property Trustee in the execution, delivery and
performance of all 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 and delivered 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 Trustees specified
hereunder, shall be exercised, solely by such Trustees 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
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section 809.
(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 810. 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 811.
Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of acceptance
by the successor Trustee required by Section 811 shall not have been delivered
to the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Depositor,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee with respect to the Trust Securities.
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 on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
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 Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. 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 is 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 with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. 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 an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, 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 with
respect to the Trust Securities.
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 1008 and shall give notice to
the Depositor. 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, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of 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 Administrative Trustees set forth in Section 807).
Section 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, 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 trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee 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 with respect to the Trust Securities and the
Trust; 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 such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may be.
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 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee
or any Administrative 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
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided 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 813. 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 814. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than November 1 of each year commencing with
November 1, 1997 the Property Trustee shall transmit to all Securityholders in
accordance with Section 1008, and to the Depositor, a brief report dated as of
such September 1 with respect to:
(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be eligible
under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report and any
action taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
securities exchange or other organization upon which the Trust Securities are
listed, with the Commission and with the Depositor.
Section 815. 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 Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 816. 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
Officer's Certificate.
Section 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, 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 817(a), or
if the number of Trustees is increased pursuant to Section 817(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul 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 810, 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 818. 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 207(a); 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 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 the Trust, as set forth herein.
Section 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent
or approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically
terminate on April 30, 2042 (the "Expiration Date") subject to distribution of
the Trust Property in accordance with Section 904.
Section 902. 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 Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to terminate the Trust and distribute the
Debentures to Securityholders in exchange for the Preferred Securities
in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
Section 903. 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 upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (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.
Section 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b),
or (d) of Section 902 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder or if the Preferred
Securities are held in book-entry form, to each Owner through the Clearing
Agency or its nominee, a Like Amount of Debentures, subject to Section 904(d).
Notice of liquidation shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not later 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 notices of liquidation 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 904(d) applies receive
a Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to
effect the liquidation 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 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) 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 reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other securities
exchange or other organization as the Preferred Securities are then listed or
traded, (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.
(d) In the event that, notwithstanding the other provisions of
this Section 904, 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, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders or if the
Preferred Securities are held in book-entry form, Owners through the Clearing
Agency or its nominee, 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 accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or termination, 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, winding-up or
termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
Section 905. 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 Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, 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 (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities) so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
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, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (b) 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 (viii) the Depositor 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 Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other than a
"grantor trust" for United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity 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 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 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to acceptance of
appointment by a successor Trustee, (ii) 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 this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement, or (iii) 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 be classified for United States federal
income tax purposes as 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; PROVIDED, HOWEVER, that in the case
of clause (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 601(c) or Section 1002(c)
hereof, any provision of this Trust Agreement may be amended by the
Administrative Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) upon 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" 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 603 or 606 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 603 or 606 hereof), this
paragraph (c) of this Section 1002 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 to fail or cease to be
classified as 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, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
(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 Officer's
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
Section 1003. 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 1004. 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 SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
Section 1005. 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 which is a Business Day (except
as otherwise provided in Sections 401(a) and 402(d)), with the same force and
effect as though made on the date fixed for such payment, and no distribution
shall accumulate thereon for the period after such date.
Section 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant 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 Ten 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 1007. HEADINGS.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
Section 1008. 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 Central Power and
Light Company, c/o Central and South West Corporation, 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202, Attention: Director, Finance, facsimile no: (214)
777-1223. Any notice to Preferred Securityholders shall also be given to such
owners as have, within two years preceding the giving of such notice, filed
their names and addresses with the Property Trustee for that purpose. 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.
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 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 The Bank of New York, 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust Trustee
Administration; (b) with respect to the Delaware Trustee, to 23 White Clay
Center, Newark, New Castle County, Delaware 19711, Attention: Corporate Trust
Trustee Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of CPL Capital I." 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 1009. 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 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), 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. The
provisions of this Section 1009 shall survive the termination of this Trust
Agreement.
Section 1010. 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 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 to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
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 to be 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 Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 1011. 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 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.
Section 1012. COUNTERPARTS.
This Trust Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all counterparts shall together constitute but one and the same instrument.
CENTRAL POWER AND LIGHT COMPANY
By: _________________________________
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK
as Property Trustee
By: _________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By: _________________________________
Name:
Title:
Wendy G. Hargus, as Administrative Trustee
R. Russell Davis, as Administrative Trustee
EXHIBIT A
CERTIFICATE OF TRUST
OF
CPL CAPITAL I
THIS CERTIFICATE OF TRUST of CPL Capital I (the "Trust"), dated
________ __, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is CPL Capital 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), 23 White Clay Center, Newark, New Castle County,
Delaware 19711.
3. Counterparts. This Certificate of Trust may be executed
in one or more counterparts, all of which together constitute one and the same
instrument.
4. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK,
as Trustee
By _____________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Trustee
By _____________________________________
Name:
Title:
Wendy G. Hargus, not in her individual capacity,
but solely as Administrative Trustee
EXHIBIT B
________, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.
Attention:[ ]
General Counsel's Office
Re: CPL Capital I Cumulative
QUARTERLY INCOME PREFERRED SECURITIES, SERIES A
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
("DEPOSITORY TRUST COMPANY") of CPL Capital I [ ]% Cumulative Quarterly Income
Preferred Securities, Series A (the "Preferred Securities"), of CPL Capital I, a
Delaware business trust (the "Issuer"), created pursuant to a Trust Agreement
between Central Power and Light Company, a Texas corporation ("CPL"), 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
Issuer or redemption of the Preferred Securities, to the extent the Issuer has
funds available for the payment thereof, are guaranteed by CPL to the extent set
forth in a Guarantee Agreement dated [ ], 1997 by CPL with respect to the
Preferred Securities. CPL and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated [ ], 1997 by and among the Underwriters, the Issuer
and CPL, and the Underwriters wish to take delivery of the Preferred Securities
through DEPOSITORY TRUST COMPANY. The Bank of New York acting as transfer agent
and registrar with respect to the Preferred Securities (the "Transfer Agent and
Registrar").
To induce DEPOSITORY TRUST COMPANY to accept the Preferred
Securities as eligible for deposit at DEPOSITORY TRUST COMPANY, and to act in
accordance with DEPOSITORY TRUST COMPANY's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DEPOSITORY TRUST
COMPANY 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 [ ], 1997, there
shall be deposited with DEPOSITORY TRUST COMPANY one or more global certificates
(individually and collectively, the "Global Certificate") registered in the name
of DEPOSITORY TRUST COMPANY's Preferred Securities nominee, Cede & Co.,
representing an aggregate of [ ] Preferred Securities and bearing the following
legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DEPOSITORY TRUST COMPANY"), 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 DEPOSITORY TRUST COMPANY (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DEPOSITORY TRUST COMPANY), 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.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders of the Preferred Securities under certain
limited circumstances. The Issuer shall establish a record date for such
purposes and shall, to the extent possible, give DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY
TRUST COMPANY 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 DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST
COMPANY's Dividend Department of such payment 5 business days prior to payment
date. The notices provided for in this paragraph shall be sent as described in
Section 9.
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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as
described in paragraph 4. Notices to DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST
COMPANY'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:
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 DEPOSITORY TRUST
COMPANY 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 "CPL Capital I [ ]% Cumulative Quarterly Income
Preferred Securities, Series A."
8. The Issuer or the Transfer Agent and Registrar shall provide
automated notification of CUSIP-level detail for Distribution payments to
DEPOSITORY TRUST COMPANY no later than noon (Eastern Time) on the payment date.
9. Distribution payments shall be received by Cede & Co. as
nominee of DEPOSITORY TRUST COMPANY, or its registered assigns, in same-day
funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment
date. Absent any other arrangements between the Issuer and DEPOSITORY TRUST
COMPANY, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
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
DEPOSITORY TRUST COMPANY. 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 DEPOSITORY TRUST COMPANY in advance of the Distribution
payment date as soon as the information is available. This information should be
conveyed directly to DEPOSITORY TRUST COMPANY electronically. If electronic
transmission is not available, such information should be sent by telecopy to
DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST COMPANY 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
10. DEPOSITORY TRUST COMPANY shall receive maturity and
redemption payments and CUSIP-level detail 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 DEPOSITORY TRUST COMPANY, such payments shall be wired
as follows:
The Chase Manhattan Bank
ABA 021000128
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
DEPOSITORY TRUST COMPANY's SDFS PAYING AGENT OPERATING PROCEDURES, a copy of
which has previously been furnished to the Transfer Agent and Registrar.
11. DEPOSITORY TRUST COMPANY shall receive all reorganization
payments and CUSIP-level detail resulting from corporation actions (such as
tender offers 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 DEPOSITORY TRUST COMPANY, such payments shall be wired as
follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DEPOSITORY TRUST COMPANY may by prior written notice direct
the Issuer and the Transfer Agent and Registrar to use any other telecopy number
or address of DEPOSITORY TRUST COMPANY as the number or address to which notices
or payments may be sent.
13. 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, DEPOSITORY TRUST COMPANY, 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.
14. DEPOSITORY TRUST COMPANY may discontinue its services as a
securities depositary with respect to the Preferred Securities at any time by
giving at least 90 days' prior written notice to the Issuer and the Transfer
Agent and Registrar (at which time DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY account, or issue definitive Preferred Securities
to the beneficial holders thereof, and in any such case, DEPOSITORY TRUST
COMPANY 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. 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
DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY and
others, and DEPOSITORY TRUST COMPANY 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.
16. The Issuer: (a) understands that DEPOSITORY TRUST COMPANY 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 DEPOSITORY
TRUST COMPANY'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
DEPOSITORY TRUST COMPANY.
17. 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 CPL Capital I.
Very truly yours,
CPL CAPITAL I
(As Issuer)
By
Name: [ ]
Title: Administrative Trustee
THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE
(As Transfer Agent and Registrar)
By:
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By
Authorized Officer
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
CPL Capital I
[ ]% Common Securities
(liquidation amount $25 per Common Security)
CPL Capital I, a statutory business trust created under the laws
of the State of Delaware (the "Trust") hereby certifies that Central Power and
Light Company (the "Holder") is the registered owner of
______________________________________ (_______________) common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
and designated the [ ]% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 510 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 [ ], 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.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this ________ day of ______, _____.
CPL CAPITAL I
By:
Name:
Administrative Trustee
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of [ ], 1997, between Central Power and Light
Company, a Texas corporation ("CPL"), and CPL Capital I, a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to, and receive Debentures (as defined in the Trust
Agreement) from, CPL and to issue and sell [ ]% Cumulative Quarterly Income
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 [ ], 1997 as the same may
be amended from time to time (the "Trust Agreement");
WHEREAS, CPL will directly or indirectly own all of the Common
Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder
of the Preferred Securities, which purchase CPL hereby agrees shall benefit CPL
and which purchase CPL acknowledges will be made in reliance upon the execution
and delivery of this Agreement, CPL, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY CPL.
Subject to the terms and conditions hereof, CPL, including in its
capacity as 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 (as hereinafter defined) 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. 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.
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 the date hereof by CPL 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.
CPL hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and CPL 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 CPL 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, CPL with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against CPL and
CPL waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against CPL.
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 CPL 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):
CPL Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above
written.
CENTRAL POWER AND LIGHT COMPANY
By:
Name: [ ]
Title: Treasurer
CPL CAPITAL I
By:
Name: [ ]
Title: Administrative Trustee
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 (as defined below) 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
CPL Capital 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-
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
CPL Capital I
[ ]% Cumulative Quarterly Income Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
CPL Capital 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 CPL Capital I [ ]% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per Preferred Security) (the
"Preferred Securities"). 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 504 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 [ ], 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 Central Power and Light
Company, a Texas corporation, and The Bank of New York, as guarantee trustee,
dated as of [ ], 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 ___________, _____.
CPL CAPITAL I
By:
Name:
Title: Administrative Trustee
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 Securities 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
Securities Certificate)
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCK BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
SEC RULE 17Ad-15.
GUARANTEE AGREEMENT
BETWEEN
CENTRAL POWER AND LIGHT COMPANY
(AS GUARANTOR)
AND
THE BANK OF NEW YORK
(AS GUARANTEE TRUSTEE)
DATED AS OF
MAY 1, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 101. Definitions...........................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application......................5
SECTION 202. List of Holders.......................................5
SECTION 203. Reports by the Guarantee Trustee......................5
SECTION 204. Periodic Reports to Guarantee Trustee.................5
SECTION 205. Evidence of Compliance with Conditions Precedent......6
SECTION 206. Events of Default; Waiver.............................6
SECTION 207. Event of Default; Notice..............................6
SECTION 208. Conflicting Interests.................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee............7
SECTION 302. Certain Rights of Guarantee Trustee...................8
SECTION 303. Indemnity............................................10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility.......................10
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee....................................11
ARTICLE V
GUARANTEE
SECTION 501. Guarantee............................................11
SECTION 502. Waiver of Notice and Demand..........................12
SECTION 503. Obligations Not Affected.............................12
SECTION 504. Rights of Holders....................................13
SECTION 505. Guarantee of Payment.................................13
SECTION 506. Subrogation..........................................13
SECTION 507. Independent Obligations..............................13
PAGE
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination........................................14
SECTION 602. Pari Passu Guarantees................................14
ARTICLE VII
TERMINATION
SECTION 701. Termination..........................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns...............................14
SECTION 802. Amendments...........................................15
SECTION 803. Notices..............................................15
SECTION 804. Benefit..............................................16
SECTION 805. Interpretation.......................................16
SECTION 806. Governing Law........................................17
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
OF 1939, AS AMENDED AGREEMENT
310(a).......................................................... 401(a)
310(b).......................................................... 401(c), 208
310(c).......................................................... Inapplicable
311(a).......................................................... 202(b)
311(b).......................................................... 202(b)
311(c).......................................................... Inapplicable
312(a).......................................................... 202(a)
312(b).......................................................... 202(b)
313............................................................. 203
314(a).......................................................... 204
314(b).......................................................... Inapplicable
314(c).......................................................... 205
314(d).......................................................... Inapplicable
314(e).......................................................... 101, 205, 302
314(f).......................................................... 201, 302
315(a).......................................................... 301(d)
315(b).......................................................... 207
315(c).......................................................... 301
315(d).......................................................... 301(d)
316(a).......................................................... 101, 206, 504
316(b).......................................................... 503
316(c).......................................................... 802
317(a).......................................................... Inapplicable
317(b).......................................................... Inapplicable
318(a).......................................................... 201(b)
318(b).......................................................... 201
318(c).......................................................... 201(b)
- ----------------
* 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.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of May 1, 1997, is executed
and delivered by Central Power and Light Company, a Texas corporation (the
"Guarantor"), and The Bank of New York, a New York banking corporation organized
under the laws of the State of New York, as trustee (the "Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of CPL Capital I, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of May 1, 1997 among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing 6,000,000 of its 8.00% Cumulative Quarterly Income Preferred Securities,
Series A (liquidation preference $25 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred 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 Preferred 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 Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 101. 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 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, PROVIDED, HOWEVER, that an Affiliate
of the Guarantor shall not be deemed to include the Issuer. 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.
"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
for 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its
payment 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 Preferred 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 Preferred 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 the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
the date of redemption, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accumulated and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, 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 Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in
determining whether the holders of the requisite percentage of Preferred
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.
"Indenture" means the Indenture dated as of May 1, 1997 relating
to Junior Subordinated Debentures of the Guarantor, as supplemented and amended
between the Guarantor and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 202(a).
"Majority in liquidation preference of the Preferred 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 preference of
all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, President, General Manager, the Treasurer,
an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the
Officer's Certificate;
(c) a statement that 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 such 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 Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers 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.
"Senior Indebtedness" means the principal of, and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Guarantee or thereafter
incurred, created or assumed: (a) all indebtedness of the Guarantor evidenced by
notes, debentures, bonds or other securities sold by the Guarantor for money,
(b) all indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Guarantor or in effect
guaranteed by the Guarantor through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Guarantor, in
accordance with generally accepted accounting principles as in effect from time
to time, unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with this Guarantee. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article VI of this
Guarantee irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 401.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. 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 202. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15 and
July 15 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (b) 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
Holders as of a date not more than 15 days prior to the time such
list is furnished, in each case to the extent such information is
in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not
otherwise been received by the Guarantee Trustee in its capacity
as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(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 203. REPORTS BY THE GUARANTEE TRUSTEE.
Not later than November 1 of each year, commencing November 1,
1997, 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 204. PERIODIC REPORTS TO 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 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.
SECTION 205. 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
Officer's Certificate.
SECTION 206. EVENTS OF DEFAULT: WAIVER.
The Holders of a Majority in liquidation preference of the
Preferred 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 thereon.
SECTION 207. EVENT 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 known
to 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 the Board of Directors, the executive committee
or a trust committee of directors and/or 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 the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
SECTION 208. 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.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. 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 504(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
206), 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 failure to act
or 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 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 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
preference of the Preferred 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 302. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 301:
(i) The Guarantee Trustee may 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 Officer's
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 upon
an Officer's 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 choice, and the written 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 302(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 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 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 303. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and
to hold it harmless against, any loss, liability or expense 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.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. 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
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 401(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 402(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 Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 402. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
(a) Subject to Section 402(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(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 402 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.
ARTICLE V
GUARANTEE
SECTION 501. 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 set-off 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 502. 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, 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 503. 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 Preferred 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 so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred 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 Preferred
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, 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 Preferred
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 503 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 504. 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 a Majority in
liquidation preference of the Preferred 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 Guarantee Trustee, the Issuer
or any other Person.
SECTION 505. 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 distribution of Debentures to Holders as provided in
the Trust Agreement.
SECTION 506. 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 501; 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 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 507. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
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 503 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor.
SECTION 602. PARI PASSU GUARANTEES.
This Guarantee Agreement shall rank pari passu with any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by CPL Capital I.
ARTICLE VII
TERMINATION
SECTION 701. TERMINATION.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred 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 Preferred Securities or
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 801. 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 Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 802. 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 only be amended with
the prior approval of the Holders of not less than a Majority in liquidation
preference of the Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
SECTION 803. 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 as the Guarantor may give notice of to the Holders:
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
(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:
CPL Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
with a copy to:
The Bank of New York
101 Barclay Street
21 West
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(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 804. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders
and is not separately transferable from the Preferred Securities.
SECTION 805. 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 101;
(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 genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 806. 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 CONFLICT OF LAW PRINCIPLES THEREOF.
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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
CENTRAL POWER AND LIGHT COMPANY
By:
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK, as Guarantee Trustee
By:
Name:
Title:
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of May 1, 1997, between Central Power and Light
Company, a Texas corporation ("CPL"), and CPL Capital I, a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to, and receive Debentures (as defined in the Trust Agreement)
from, CPL and to issue and sell 7.875% Cumulative Quarterly Income 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 May 1, 1997 as the same may be amended
from time to time (the "Trust Agreement");
WHEREAS, CPL will directly or indirectly own all of
the Common Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase CPL hereby agrees shall benefit CPL and
which purchase CPL acknowledges will be made in reliance upon the execution and
delivery of this Agreement, CPL, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY CPL.
Subject to the terms and conditions hereof, CPL, including in its
capacity as 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 (as hereinafter defined) 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. 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.
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 the date hereof by CPL 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.
CPL hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and CPL 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 CPL 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, CPL with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against CPL and CPL
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against CPL.
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 CPL 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):
CPL Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:
Name: Wendy G. Hargus
Title: Treasurer
CPL CAPITAL I
By:
Name: Wendy G. Hargus
Title: Administrative Trustee
PUBLIC SERVICE COMPANY OF OKLAHOMA
AND
THE BANK OF NEW YORK,
AS TRUSTEE
INDENTURE
DATED AS OF MAY 1, 1997
JUNIOR SUBORDINATED DEBENTURES
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
OF 1939, AS AMENDED INDENTURE
310(a) 7.09
310(b) 7.08
7.10
310(c) Inapplicable
311(a) 7.13
311(c) Inapplicable
312(a) 5.01
5.02(a)
312(b) 5.02(c)
5.02(d)
312(c) 5.02(e)
313(a) 5.04(a)
313(b) 5.04(b)
313(c) 5.04(a)
5.04(b)
313(d) 5.04(c)
314(a) 5.03
314(b) Inapplicable
314(c) 13.06
314(d) Inapplicable
314(e) 13.06
314(f) Inapplicable
315(a) 7.01(a)
7.02
315(b) 6.07
315(c) 7.01
315(d) 7.01(b)
7.01(c)
315(e) 6.08
316(a) 6.06
8.04
316(b) 6.04
316(c) 8.01
317(a) 6.02
317(b) 4.03
318(a) 13.08
TABLE OF CONTENTS*
PAGE
RECITALS................................................. 1
ARTICLE ONE
Definitions....................... 2
SECTION 1.01............................................. 2
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures......... 6
SECTION 2.01............................................. 6
SECTION 2.02............................................. 8
SECTION 2.03............................................. 8
SECTION 2.04............................................. 10
SECTION 2.05............................................. 12
SECTION 2.06............................................. 13
SECTION 2.07............................................. 13
SECTION 2.08............................................. 14
SECTION 2.09............................................. 15
SECTION 2.10............................................. 15
SECTION 2.11............................................. 16
SECTION 2.12. .......................................... 19
SECTION 2.13............................................. 19
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions... 19
SECTION 3.01............................................. 19
SECTION 3.02............................................. 19
SECTION 3.03............................................. 21
SECTION 3.04............................................. 21
SECTION 3.05............................................. 22
SECTION 3.06............................................. 22
ARTICLE FOUR
Particular Covenants of the Company........... 22
SECTION 4.01............................................. 22
SECTION 4.02............................................. 23
SECTION 4.03............................................. 23
SECTION 4.04............................................. 24
SECTION 4.05............................................. 24
SECTION 4.06............................................. 24
- ---------------
* This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms
or provisions.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee..................... 25
SECTION 5.01............................................. 25
SECTION 5.02............................................. 25
SECTION 5.03............................................. 27
SECTION 5.04............................................. 28
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default................... 30
SECTION 6.01............................................. 30
SECTION 6.02............................................. 32
SECTION 6.03............................................. 34
SECTION 6.04............................................. 34
SECTION 6.05............................................. 35
SECTION 6.06............................................. 36
SECTION 6.07............................................. 36
SECTION 6.08............................................. 37
ARTICLE SEVEN
Concerning the Trustee.................. 38
SECTION 7.01............................................. 38
SECTION 7.02............................................. 39
SECTION 7.03............................................. 41
SECTION 7.04............................................. 41
SECTION 7.05............................................. 42
SECTION 7.06............................................. 42
SECTION 7.07............................................. 43
SECTION 7.08............................................. 43
SECTION 7.09............................................. 43
SECTION 7.10............................................. 43
SECTION 7.11............................................. 45
SECTION 7.12............................................. 47
SECTION 7.13............................................. 47
ARTICLE EIGHT
Concerning the Debentureholders............. 47
SECTION 8.01............................................. 47
SECTION 8.02............................................. 48
SECTION 8.03............................................. 48
SECTION 8.04............................................. 48
SECTION 8.05............................................. 49
ARTICLE NINE
Supplemental Indentures................. 49
SECTION 9.01............................................. 49
SECTION 9.02............................................. 51
SECTION 9.03............................................. 52
SECTION 9.04............................................. 52
SECTION 9.05............................................. 52
ARTICLE TEN
Consolidation, Merger and Sale.............. 52
SECTION 10.01............................................ 52
SECTION 10.02............................................ 53
SECTION 10.03............................................ 54
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys..................... 54
SECTION 11.01............................................ 54
SECTION 11.02............................................ 55
SECTION 11.03............................................ 56
SECTION 11.04............................................ 57
SECTION 11.05............................................ 57
SECTION 11.06............................................ 57
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors...................... 57
SECTION 12.01............................................ 57
ARTICLE THIRTEEN
Miscellaneous Provisions................. 58
SECTION 13.01............................................ 58
SECTION 13.02............................................ 58
SECTION 13.03............................................ 58
SECTION 13.04............................................ 59
SECTION 13.05............................................ 59
SECTION 13.06............................................ 59
SECTION 13.07............................................ 59
SECTION 13.08............................................ 60
SECTION 13.09............................................ 60
SECTION 13.10............................................ 60
SECTION 13.11............................................ 60
SECTION 13.12............................................ 60
ARTICLE FOURTEEN
Subordination of Debentures............... 60
SECTION 14.01............................................ 60
SECTION 14.02............................................ 61
SECTION 14.03............................................ 61
SECTION 14.04............................................ 63
SECTION 14.05............................................ 64
SECTION 14.06............................................ 64
SECTION 14.07............................................ 65
SECTION 14.08............................................ 66
THIS INDENTURE, dated as of the first day of May, 1997, between PUBLIC
SERVICE COMPANY OF OKLAHOMA, a corporation duly organized and existing under the
laws of the State of Oklahoma (hereinafter sometimes referred to as the
"Company"), and THE BANK OF NEW YORK, a New York banking corporation organized
and existing under the laws of the State of New York, as trustee (hereinafter
sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of debentures (hereinafter referred to as the "Debentures"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be
borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture; and
WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered by
the Trustee as in this Indenture provided, the valid, binding and legal
obligations of the Company, and to constitute these presents a valid indenture
and agreement according to its terms, have been done and performed or will be
done and performed prior to the issuance of the Debentures, and the execution of
this Indenture and the issuance hereunder of the Debentures have been or will be
prior to issuance in all respects duly authorized, and the Company, in the
exercise of the legal right and power in it vested, executes this Indenture and
proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar ($1.00) to it duly paid by
the Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee, for the equal
and proportionate benefit (subject to the provisions of this Indenture) of the
respective holders from time to time of the Debentures, without any
discrimination, preference or priority of any one Debenture over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
Section 1.01. The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture, any resolution of the Board of Directors of
the Company and of any indenture supplemental hereto shall have the respective
meanings specified in this Section. All other terms used in this Indenture which
are defined in the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") or which are by reference in the Trust Indenture Act defined in the
Securities Act of 1933, as amended (the "Securities Act"), (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this instrument.
"Authenticating Agent" shall mean an authenticating agent with respect
to all or any of the series of Debentures, as the case may be, appointed with
respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
"Board of Directors" shall mean the Board of Directors of the Company,
or any committee of such Board duly authorized to act on behalf thereof
hereunder.
"Board Resolution" shall mean 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 and to be in full force and effect on the date of such
certification.
"Business Day" shall mean, with respect to any series of Debentures,
any day other than (i) a Saturday or Sunday or (ii) a day on which banking
institutions in the Borough of Manhattan, the City and State of New York or any
city in which the Trustee's Corporate Trust Office is located, are authorized or
required to close.
"Certificate" shall mean a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company. The Certificate need not comply with the provisions of Section
13.05.
"Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at 101
Barclay Street, New York, NY 10286, Attention: Corporate Trust
Trustee Administration.
"Company" shall mean Public Service Company of Oklahoma, a corporation
duly organized and existing under the laws of the State of Oklahoma, and,
subject to the provisions of Article Ten, also includes its successors and
assigns.
"Debenture" or "Debentures" shall mean any Debenture or Debentures, as
the case may be, authenticated and delivered under this Indenture.
"Debentureholder," "holder of Debentures," "registered holder" or
other similar term shall mean the person or persons in whose name or names a
particular Debenture shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debentures of any series for
which the Company shall determine that such Debentures will be issued as a
Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" shall mean, with respect to Debentures of a
particular series, any event specified in Section 6.01, continued for the period
of time, if any, therein designated.
"Fixed Maturity" shall mean when used with respect to any Debenture or
any installment of principal thereof, the date specified pursuant to the terms
of such Debenture as the fixed date on which principal of such Debenture or such
installment of principal is due and payable, as such date may be shortened as
provided pursuant to the terms of such Debenture and this Indenture.
"Global Debenture" shall mean, with respect to any series of
Debentures, a Debenture executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Governmental Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the specific payment of principal of or interest on the Governmental
Obligation evidenced by such depository receipt.
"Indenture" shall mean this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date," when used with respect to any installment of
interest on a Debenture of a particular series, shall mean the date specified in
such Debenture, a Board Resolution or an indenture supplemental hereto with
respect to that series as the fixed date on which an installment of interest
with respect to Debentures of that series is due and payable.
"Officer's Certificate" shall mean a certificate signed by the
President, General Manager, Treasurer or an Assistant Treasurer, Controller or
an Assistant Controller or the Secretary or an Assistant Secretary of the
Company. Each such certificate shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who may be counsel for the Company, reasonably acceptable to the
Trustee. Each such opinion shall include the statements provided for in Section
13.05, if and to the extent required by the provisions thereof.
"outstanding", when used with reference to Debentures of any series,
shall mean, subject to the provisions of Section 8.04, as of any particular
time, all Debentures of that series theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Debentures theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying agent
for cancellation or which have previously been canceled; (b) Debentures or
portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Debentures or portions of
such Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; (c)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.07; and (d)
Debentures paid pursuant to Section 2.07.
"Predecessor Debenture" of any particular Debenture shall mean every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by that particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Responsible Officer," when used with respect to the Trustee, shall
mean the chairman of the board of directors, president, any vice president,
secretary, treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Senior Indebtedness" of the Company shall mean the principal of, and
premium, if any, and interest on and any other payment due pursuant to any of
the following, whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed: (a) all indebtedness of the Company
evidenced by notes, debentures, bonds or other securities sold by the Company
for money, (b) all indebtedness of others of the kinds described in the
preceding clause (a) assumed by or guaranteed in any manner by the Company or in
effect guaranteed by the Company through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Company, in accordance
with generally accepted accounting principles as in effect from time to time,
unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with the Debentures. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article Fourteen of this
Indenture irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Trustee" shall mean The Bank of New York and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and
if at any time there is more than one person acting in such capacity hereunder,
"Trustee" means each such person. The term "Trustee" as used with respect to a
particular series of the Debentures means the trustee with respect to that
series.
"Trust Indenture Act," subject to the provisions of Sections 9.01,
9.02 and 10.01, shall mean the Trust Indenture Act of 1939, as amended and in
effect at the date of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
Section 2.01. The aggregate principal amount of Debentures which may
be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution delivered to the Trustee,
and set forth in an Officer's Certificate delivered to the Trustee, or
established in one or more indentures supplemental hereto:
(1) the title of the Debentures of the series (which
shall distinguish the Debentures of that series from all
other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures of
that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, in exchange for or in lieu of other Debentures of that
series);
(3) the date or dates on which the principal of the Debentures of that
series is payable or the method of determination thereof (including any
provision for shortening thereof);
(4) the rate or rates at which the Debentures of that series shall
bear interest, if any, or the manner of calculation of such rate or rates;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record dates for
the determination of holders to whom interest is payable on any such
Interest Payment Dates;
(6) the right of the Company, if any, to extend or
defer the interest payment periods and the duration of such
extension or deferral;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Debentures of that series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debentures of that series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which and the terms
and conditions upon which, Debentures of that series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) the form of the Debentures of that series,
including the form of the Certificate of Authentication for
that series;
(10) if denominations of other than $25 or any integral multiple
thereof, the denominations in which Debentures of that series shall be
issuable;
(11) whether the Debentures are issuable as a Global
Debenture and, in such case, the identity of the Depositary
for that series; and
(12) any and all other terms with respect to that series (which terms
shall not be inconsistent with the terms of this Indenture).
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of that 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 prior to the delivery of the Officer's
Certificate setting forth the terms of that series.
Section 2.02. The Debentures of any series and the Certificate of
Authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officer's Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
Section 2.03. The Debentures shall be issuable as registered
Debentures and in denominations of $25 or any integral multiple thereof, subject
to Section 2.01(10). The Debentures of a particular series shall bear interest
payable on the dates and at the rate or rates specified with respect to that
series. The principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America which
at the time is legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, the City
and State of New York (which, unless changed, shall be a Corporate Trust Office
or agency of the Trustee). At the Company's option, payments on the Debentures
of any series may also be made (i) by checks mailed by the Trustee to the
holders entitled thereto at their registered addresses or (ii) to a holder of
$1,000,000 or more in aggregate principal amount of the Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account; provided that, in either case, the
payment of principal with respect to any Debenture will be made only upon
surrender of that Debenture to the Trustee. Each Debenture shall be dated the
date of its authentication. Interest on the Debentures shall be computed on the
basis of a 360-day year composed of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on that Debenture will be paid upon presentation and surrender of that
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same 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 shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) 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 such Debenture 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 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 not be more than 15 nor 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 Debentureholder at his or her address
as it appears in the Debenture Register (as hereinafter defined), not less
than 10 days prior to 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 such Debentures (or their respective Predecessor
Debentures) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for that series shall mean either the 15th day of the
month immediately preceding the month in which an Interest Payment Date
established for that series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the 15th day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debenture.
Section 2.04. The Debentures shall, subject to the provisions of
Section 2.06, be printed on steel engraved borders or fully or partially
engraved, or legibly typed, as the proper officers of the Company may determine,
and shall be signed on behalf of the Company by its President or General
Manager, under its corporate seal attested by its Secretary or one of its
Assistant Secretaries. The signature of the President or General Manager and/or
the signature of the Secretary or an Assistant Secretary in attestation of the
corporate seal, upon the Debentures, may be in the form of a facsimile signature
of a present or any future President or General Manager and of a present or any
future Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Debentures and for that purpose the Company may use the
facsimile signature of any person who shall have been a President or General
Manager, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of that person shall have ceased to be
the President or General Manager, or the Secretary or an Assistant Secretary, of
the Company, as the case may be. The seal of the Company may be in the form of a
facsimile of the seal of the Company and may be impressed, affixed, imprinted or
otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and made available for delivery hereunder and that the
holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or General Manager and its Treasurer or any Assistant Treasurer, and
the Trustee in accordance with such written order shall authenticate and make
available for delivery such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, (i) an Opinion of Counsel and (ii) an Officer's
Certificate, each stating that the form and terms thereof have been established
in conformity with the provisions of this Indenture. Each Opinion of Counsel and
Officer's Certificate delivered pursuant to this Section 2.04 shall include all
statements prescribed by Section 13.05(b) hereof.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will, in the good faith
judgment of the Trustee, affect the Trustee's own rights, duties or immunities
under the Debentures and this Indenture or otherwise in a manner that is not
reasonably acceptable to the Trustee.
Section 2.05. (a) Debentures of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for such
purpose in the Borough of Manhattan, the City and State of New York, for other
Debentures of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section. In
respect of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall make
available for delivery in exchange therefor the Debenture or Debentures of the
same series which the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company, a register
or registers (herein referred to as the "Debenture Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or agency
of the Company designated for such purpose in the Borough of Manhattan, the City
and State of New York, the Company shall execute, the Trustee shall authenticate
and such office or agency shall make available for delivery in the name of the
transferee or transferees a new Debenture or Debentures of the same series as
the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required
by the Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company and the Debenture
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) Except as provided in the first paragraph of Section 2.07, no
service charge shall be made for any exchange or registration of transfer of
Debentures, or issue of new Debentures in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
involving any transfer.
(d) The Company shall neither be required (i) to issue, exchange or
register the transfer of any Debentures of any series during a period beginning
at the opening of business 15 days before the day of selection for redemption of
Debentures of that series and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all holders of Debentures of that series to be redeemed, nor (ii) to register
the transfer of or exchange any Debentures of any series or portions thereof
called for redemption, except the unredeemed portion of any Debentures being
redeemed in part. The provisions of this Section 2.05 are, with respect to any
Global Debenture, subject to Section 2.11 hereof.
Section 2.06. Pending the preparation of definitive Debentures of any
series, the Company may execute, and the Trustee shall authenticate and make
available for delivery, temporary Debentures (printed, lithographed or
typewritten) of any authorized denomination, and substantially in the form of
the definitive Debentures in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every temporary Debenture
of any series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures of that series in accordance with the
terms of Section 2.04 hereof. Without unnecessary delay the Company will execute
and will furnish definitive Debentures of such series and thereupon any or all
temporary Debentures of that series may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the Company
designated for the purpose in the Borough of Manhattan, the City and State of
New York, and the Trustee shall authenticate and such office or agency shall
make available for delivery in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures of that series, unless the
Company advises the Trustee to the effect that definitive Debentures need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Debentures of that series shall be entitled to the same
benefits under this Indenture as definitive Debentures of that series
authenticated and made available for delivery hereunder.
Section 2.07. In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company (subject to the
next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a new
Debenture of the same series bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debenture and
of the ownership thereof. The Trustee may authenticate any such substituted
Debenture and make available for delivery the same upon the written order of the
Company. Upon the issuance of any substituted Debenture, 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 the
fees and expenses of the Trustee) connected therewith. In case any Debenture
which has matured or is about to mature or has been called for redemption shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Company and to the Trustee such
security or indemnity as they may require to save them harmless and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debenture and of the ownership
thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.08. All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be canceled by it, and no Debentures shall
be issued in lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company, the Trustee shall
deliver to the Company canceled Debentures held by the Trustee. In the absence
of such request the Trustee may dispose of canceled Debentures in accordance
with its standard procedures. If the Company shall otherwise acquire any of the
Debentures, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and until
the same are delivered to the Trustee for cancellation.
Section 2.09. Nothing in this Indenture or in the Debentures, express
or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Debentures,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures.
Section 2.10. So long as any of the Debentures of any series remain
outstanding there may be an Authenticating Agent for any or all such series of
Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or partial
redemption thereof, and Debentures 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. All references in this Indenture to
the authentication of Debentures of any series by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently reported
or determined by it, of $50 million, and which is otherwise authorized under
such laws to conduct a trust business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
Section 2.11. (a) If the Company shall establish pursuant to Section
2.01 that the Debentures of a particular series are to be issued as a Global
Debenture, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and make available for delivery, a Global
Debenture which (i) shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Debentures of that
series, (ii) shall be registered in the name of the Depositary or its nominee,
(iii) shall be made available for delivery by the Trustee to the Depositary or
pursuant to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Except as otherwise provided in Section
2.11 of the Indenture, this Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05 and except as set
forth in Section 2.11(c) or (d), the Global Debenture of a series may be
transferred, in whole but not in part and in the manner provided in Section
2.05, only to another nominee of the Depositary for that series, a successor
Depositary for that series selected or approved by the Company or a nominee of
that successor Depositary.
(c) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture,
an interest in any Global Debenture shall be
exchangeable at the option of the beneficial
owner of such interest in such Global Debenture
for a definitive Debenture or Debentures
registered in the name of any holder other than
the Depositary or its nominee at any time
following issuance of such Global Debenture.
(ii) A beneficial owner of an interest in any Global Debenture
desiring to exchange such beneficial interest for a definitive
Debenture or Debentures shall instruct the Depositary, through
the Depositary's direct or indirect participants or otherwise, to
request such exchange on such beneficial owner's behalf and to
provide a written order containing registration instructions to
the Trustee. Upon receipt by the Trustee of electronic or written
instructions from the Depositary on behalf of such beneficial
owner, the Trustee shall cause, in accordance with the standing
instructions and procedures existing between the Trustee and the
Depositary, the aggregate principal amount of such Global
Debenture to be reduced by the principal amount of such
beneficial interest so exchanged and shall appropriately reflect
such reduction of the aggregate principal amount of this Global
Debenture as described in paragraph (iii) of this Section
2.11(c). Following such reduction, the Trustee shall authenticate
and make available for delivery to such beneficial owner of the
transferee, as the case may be, a definitive Debenture or
Debentures previously executed by the Company as described in
Section 2.05(a) and registered in such names and authorized
denominations as the Depositary, pursuant to such instructions of
the beneficial owner, shall instruct the Trustee.
(iii) Upon any exchange of a portion of any Global Debenture for
a definitive Debenture or Debentures, the Debenture Registrar
shall reflect the reduction of the principal amount of such
Global Debenture by the principal amount of such beneficial
interest so exchanged on the Debenture Register. Until exchanged
in full for definitive Debentures, such Global Debenture shall in
all respects be entitled to the same benefits under the Indenture
as the definitive Debentures authenticated and delivered
hereunder.
(d) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture,
if and so long as the Debentures of any series
are issued as a Global Debenture, any definitive
Debenture or Debentures of such series shall be
exchangeable at the option of the registered
holder thereof for a beneficial interest in such
Global Debenture at any time following the
exchange of such Global Debenture for such
definitive Debenture or Debentures pursuant to
Section 2.11(c).
(ii) A registered holder of a definitive Debenture or Debentures
desiring to exchange such definitive Debenture or Debentures for
a beneficial interest in such Global Debenture shall instruct the
Depositary, through the Depositary's direct or indirect
participants or otherwise, to request such exchange on such
registered holder's behalf and to provide a written order
containing registration instructions to the Trustee. Upon receipt
by the Trustee of electronic or written instructions from the
Depositary, and upon presentation to the Trustee of such
definitive Debenture or Debentures, the Trustee shall cause, in
accordance with the standing instructions and procedures existing
between the Trustee and the Depositary, the aggregate principal
amount of such Global Debenture to be increased by the principal
amount of such definitive Debenture or Debentures so exchanged
and shall appropriately reflect such increase of the aggregate
principal amount of the Global Debenture as described in
paragraph (iii) of this Section 2.11(d).
(iii) Upon any exchange of a definitive Debenture or Debentures
for a beneficial interest in such Global Debenture, the Debenture
Registrar shall reflect the increase of the principal amount of
such Global Debenture by the principal amount of such definitive
Debenture or Debentures so exchanged on the Debenture Register.
(e) If at any time the Depositary for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depositary for that
series or if at any time the Depositary for that series shall no longer be
registered or in good standing under the Exchange Act or other applicable
statute or regulation and a successor Depositary for that series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer apply to the Debentures of that series and the Company will execute
and, subject to Section 2.05, the Trustee will authenticate and make available
for delivery Debentures of that series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture of that series in exchange for
such Global Debenture. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by a Global
Debenture and that the provisions of this Section 2.11 shall no longer apply to
the Debentures of that series. In that event the Company will execute and,
subject to Section 2.05, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery Debentures of that series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture of such series in
exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture pursuant to this Section 2.11(e) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Debenture Registrar. The Trustee shall make available for delivery such
Debentures to the Depositary for delivery to the persons in whose names such
Debentures are so registered.
Section 2.12. If specified as contemplated by Section 2.01 with
respect to the Debentures of a particular series, the Company shall have the
right to shorten the maturity of the principal of the Debentures of such series
at any time to any date, PROVIDED that, if the Company elects to exercise its
right to shorten the maturity of the principal of the Debentures of such series,
at the time such election is made and at the time of such shortening, such
conditions as may be specified in such Debentures shall have been satisfied.
Section 2.13. The Company in issuing the Debentures 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 Debentures or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
Section 3.01. The Company may redeem the Debentures of any series
issued hereunder on and after the dates and in accordance with the terms
established for that series pursuant to Section 2.01 hereof.
Section 3.02. (a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Debentures of any
series in accordance with the right reserved so to do, it shall give notice of
such redemption to holders of the Debentures of the series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity of
the proceedings for the redemption of any other Debentures of that series or any
other series. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officer's Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the CUSIP number, if any,
of Debentures being redeemed, the date fixed for redemption and the redemption
price at which Debentures of that series are to be redeemed, and shall state
that payment of the redemption price of the Debentures to be redeemed will be
made at the office or agency of the Company in the Borough of Manhattan, the
City and State of New York, upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption will be paid as specified
in that notice, that from and after that date interest will cease to accrue, and
that the redemption is for a sinking fund, if such is the case. If less than all
the Debentures of a series are to be redeemed, the notice to the holders of
Debentures of that series to be redeemed shall specify the particular Debentures
to be so redeemed. In case any Debenture is to be redeemed in part only, the
notice which relates to such Debenture shall state the portion of the principal
amount thereof to be redeemed, and shall state that on and after the redemption
date, upon surrender of such Debenture, a new Debenture or Debentures of that
series in principal amount equal to the unredeemed portion thereof will be
issued.
(b) The Company shall give the Trustee at least 45 days' advance
notice of the date fixed for redemption (unless shorter notice shall be required
by the Trustee) as to the aggregate principal amount of Debentures of the series
to be redeemed, and if less than the entire aggregate principal amount of such
series is to be redeemed, thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or General Manager, instruct
the Trustee or any paying agent to call all or any part of the Debentures of a
particular series for redemption and to give notice of redemption in the manner
set forth in this Section, such notice to be in the name of the Company or its
own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying
agent, the Company shall deliver or cause to be delivered to, or permit to
remain with, the Trustee or such paying agent, as the case may be, such
Debenture Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to
give any notice by mail that may be required under the provisions of this
Section.
Section 3.03. (a) If the giving of notice of redemption shall have
been completed as above provided, the Debentures or portions of Debentures of
the series to be redeemed specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and
interest on such Debentures or portions of Debentures shall cease to accrue on
and after the date fixed for redemption, unless the Company shall default in the
payment of such redemption price and accrued interest with respect to any such
Debenture or portion thereof. On presentation and surrender of such Debentures
on or after the date fixed for redemption at the place of payment specified in
the notice, such Debentures shall be paid and redeemed at the applicable
redemption price for such series, together with interest accrued thereon to the
date fixed for redemption (but if the date fixed for redemption is an interest
payment date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute, the Trustee shall authenticate
and the office or agency where the Debenture is presented shall make available
for delivery to the holder thereof, at the expense of the Company, a new
Debenture or Debentures of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debenture so presented.
Section 3.04. The provisions of Sections 3.04, 3.05 and 3.06 shall
apply to any sinking fund for the retirement of Debentures of a series, except
as otherwise specified as contemplated by Section 2.01 for Debentures of that
series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of that series.
Section 3.05. The Company (i) may deliver Outstanding Debentures of a
series (other than any previously called for redemption) and (ii) may apply as a
credit Debentures of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Debentures or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Debentures, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of such series required to be made
pursuant to the terms of such Debentures as provided for by the terms of that
series; provided that such Debentures have not been previously so credited. Such
Debentures shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Debentures for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 3.06. Not less than 45 days prior to each sinking fund payment
date for any series of Debentures, the Company will deliver to the Trustee an
Officer's Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by delivering and crediting Debentures
of that series pursuant to Section 3.05 and the basis for such credit and will,
together with such Officer's Certificate, deliver to the Trustee any Debentures
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Debentures to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 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 3.02. Such notice having been duly
given, the redemption of such Debentures shall be made upon the terms and in the
manner stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as
follows:
Section 4.01. The Company will duly and punctually pay or cause to be
paid the principal of (and premium, if any) and interest on the Debentures
(subject to the Company's right to extend or defer an Interest Payment Date) of
that series at the time and place and in the manner provided herein and
established with respect to such Debentures.
Section 4.02. So long as any series of the Debentures remains
outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, the City and State of New York (which, unless changed, shall be a
corporate trust office or agency of the Trustee), with respect to each such
series and at such other location or locations as may be designated as provided
in this Section 4.02, where (i) Debentures of that series may be presented for
payment, (ii) Debentures of that series may be presented as hereinabove
authorized for registration of transfer and exchange and (iii) notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or General Manager and delivered to the Trustee, designate some
other office or agency for such purposes or any of them. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, 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, notices and demands.
Section 4.03. (a) If the Company shall appoint one or more paying
agents, other than the Trustee, for all or any series of the Debentures, the
Company will cause each such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section, that it will:
(1) hold all sums held by it as such agent for the payment of the
principal of (and premium, if any) or interest on the Debentures of that
series (whether such sums have been paid to it by the Company or by any
other obligor of such Debentures) in trust for the benefit of the persons
entitled thereto;
(2) give the Trustee notice of any failure by the Company (or by any
other obligor of such Debentures) to make any payment of the principal of
(and premium, if any) or interest on the Debentures of that series when the
same shall be due and payable;
(3) at any time during the continuance of any failure referred to in
the preceding paragraph (a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
paying agent; and
(4) perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debentures, it will, on or before each due date of the
principal of (and premium, if any) or interest on Debentures of that series, set
aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.06 and (ii) 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 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 terms and conditions as those upon which 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 sums.
Section 4.04. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
Section 4.05. The Company will not, while any of the Debentures remain
outstanding, consolidate with, merge into, merge into itself or sell or convey
all or substantially all of its property to any other company, unless the
provisions of Article Ten hereof are complied with.
Section 4.06. If there shall have occurred any event that would, with
the giving of notice or the passage of time, or both, constitute an Event of
Default under the Indenture, or the Company shall have given notice of its
selection of an extended interest payment period as provided in the Indenture
and such period, or any extension thereof, shall be continuing, the Company will
not, until all defaulted interest on the Debentures and all interest accrued on
the Debentures during an extended interest payment period and all principal and
premium, if any, then due and payable on the Debentures shall have been paid in
full, (i) declare, set aside or pay any dividend or distribution on any capital
stock of the Company, except for dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, or (ii)
repurchase, redeem or otherwise acquire, or make any sinking fund payment for
the purchase or redemption of, any shares of its capital stock (except by
conversion into or exchange for shares of its capital stock and except for a
redemption, purchase or other acquisition of shares of its capital stock made
for the purpose of an employee incentive plan or benefit plan of the Company or
any of its subsidiaries, if any, and except for mandatory redemption or sinking
fund payments with respect to any series of preferred stock of the Company that
are subject to mandatory redemption or sinking fund requirements, provided that
the aggregate stated value of all such series outstanding at the time of any
such payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by the Company and then outstanding and (2) the
capital and surplus of the Company to be stated on the books of account of the
Company after giving effect to such payment); provided, however, that any moneys
deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this Section.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
Section 5.01. The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Debentures as of such
regular record date; provided that the Company shall not be obligated to furnish
or cause to furnish such list at any time that the list shall not differ in any
respect from the most recent list furnished to the Trustee by the Company 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; provided, however, no such list need be furnished for any series for
which the Trustee shall be the Debenture Registrar.
Section 5.02. (a) The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant owns and has
owned a Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of that series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of Section
5.02(a); or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of Section 5.02(a), and as to
the approximate cost of mailing to such Debentureholders the form of proxy
or other communication, if any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of that series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of Section 5.02(a), a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Debentures of that series or
of all Debentures, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise, the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
Section 5.02(c), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 5.02(c).
Section 5.03. (a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations. Delivery of such reports, documents and information to the Trustee
under this subsection (b) and Section 5.03(a) 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 the covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officer's
Certificate).
(c) The Company covenants and agrees to transmit by mail, first-class
postage prepaid, or reputable overnight delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to Section 5.03(a) and (b) as may be
required by rules and regulations prescribed from time to time by the
Commission.
(d) The Company covenants and agrees to furnish to the Trustee, on or
before September 1 in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
(e) The Company covenants and agrees, during any calendar year in
which original issue discount has accrued on Outstanding Debentures, to file
with the Trustee promptly at the end of each such calendar year a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Debentures as of the end of such year.
Section 5.04. (a) On or before November 1 in each year in which any of
the Debentures are outstanding, the Trustee shall transmit by mail, first-class
postage prepaid, to the Debentureholders, as their names and addresses appear
upon the Debenture Register, a brief report dated as of the preceding September
1 with respect to any of the following events which may have occurred within the
previous 12 months (but if no such event has occurred within such period no
report need be transmitted):
(1) any change to its eligibility under Section 7.09,
and its qualifications under Section 7.08;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Section 7.08(c);
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee if such advances so remaining unpaid aggregate more than
1/2 of 1% of the principal amount of the Debentures outstanding on the date
of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company, or by any other obligor on the
Debentures, to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in paragraphs (2), (3), (4) or
(6) of Section 7.13(b);
(5) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the
date of such report;
(6) any release, or release and substitution, of property subject to
the lien, if any, of this Indenture (and the consideration thereof, if any)
which it has not previously reported;
(7) any additional issue of Debentures which the
Trustee has not previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures or the Debentures of any series,
except any action in respect of a default, notice of which has been or is
to be withheld by it in accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first-class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Debentures of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of such series
outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
Section 6.01. (a) Whenever used herein with respect to Debentures
of a particular series, "Event of Default" means any one or more of the
following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any of
the Debentures of that series, as and when the same shall become due and
payable, and continuance of such default for a period of 60 days (subject
to the Company's right, if any, to extend or defer an Interest Payment Date
pursuant to Section 2.01 hereof);
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable, whether at maturity, upon redemption, by declaration or
otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series, and continuance of such default
for a period of 3 days;
(3) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company with
respect to that series contained in such Debentures or otherwise
established with respect to that series of Debentures pursuant to Section
2.01 hereof or contained in this Indenture (other than a covenant or
agreement which has been expressly included in this Indenture solely for
the benefit of one or more series of Debentures other than such series) for
a period of 90 days after the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a "Notice
of Default" hereunder, shall have been given to the Company by the Trustee,
by registered or certified mail, or to the Company and the Trustee by the
holders of at least 33% in principal amount of the Debentures of that
series at the time outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any
other similar applicable federal or state law, and such decree or order
shall have continued unvacated and unstayed for a period of 90 days; an
involuntary case shall be commenced under such Code in respect of the
Company and shall continue undismissed for a period of 90 days or an order
for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or insolvency of
the Company or of its property, or for the winding up or liquidation of its
affairs, and such decree or order shall have remained in force unvacated
and unstayed for a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, shall consent to the filing of a bankruptcy proceeding
against it, shall file a petition or answer or consent seeking liquidation
or reorganization under the Federal Bankruptcy Code or other similar
applicable federal or state law, shall consent to the filing of any such
petition or shall consent to the appointment on the ground of insolvency or
bankruptcy of a receiver or custodian or liquidator or trustee or assignee
in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors.
(b) In each and every such case, the Company shall file with the
Trustee written notice of the occurrence of any Event of Default within five
Business Days of the Company's becoming aware of any such Event of Default, and
unless the principal of all the Debentures of that series shall have already
become due and payable, either the Trustee or the holders of not less than 33%
in aggregate principal amount of the Debentures of that series then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Debentureholders), may declare the principal of all the Debentures of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything contained in
this Indenture or in the Debentures of that series or established with respect
to that series pursuant to Section 2.01 hereof to the contrary notwithstanding.
(c) The provisions of subsection (b) of this Section, however, are
subject to the condition that if, at any time after the principal of the
Debentures of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debentures of that series and the principal of (and
premium, if any, on) any and all Debentures of that series which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.06, and any and
all defaults under the Indenture, other than the nonpayment of principal on
Debentures of that series which shall not have become due by their terms, shall
have been remedied or, alternatively, waived as provided in Section 6.06, then
and in every such case the Event or Events of Default giving rise to the
declaration of acceleration will, without further act, be deemed to have been
rescinded and annulled; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
Section 6.02. (a) The Company covenants that (1) in case default shall
be made in the payment of any installment of interest on any of the Debentures
of a series, and such default shall have continued for a period of 60 days, or
(2) in case default shall be made in the payment of the principal of (or
premium, if any, on) any of the Debentures of a series when the same shall have
become due and payable, and such default shall continue for a period of 3 days,
whether upon maturity of the Debentures of a series or upon redemption or upon
declaration or otherwise, or in any payment required by any sinking or analogous
fund established with respect to that series as and when the same shall have
become due and payable, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures of that series,
the whole amount that then shall have become due and payable on all such
Debentures for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate per annum expressed in the
Debentures of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures or the
creditors or property of either, the Trustee shall have power to intervene in
such proceedings and take any action therein that may be permitted by the court
and shall (except as may be otherwise provided by law) be entitled to file such
proofs of claim and other papers and documents as may be necessary or advisable
in order to have the claims of the Trustee and of the holders of Debentures of
such series allowed for the entire amount due and payable by the Company or such
other obligor under the Indenture at the date of institution of such proceedings
and for any additional amount which may become due and payable by the Company or
such other obligor after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to distribute the
same after the deduction of the amount payable to the Trustee under Section
7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Debentures of that series to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to such Debentureholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or 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 payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of that
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law, in
equity, in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize, consent to, accept or adopt on behalf of any Debentureholder any plan
of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
Section 6.03. Any moneys collected by the Trustee pursuant to Section
6.02 with respect to a particular series of Debentures shall be applied in the
order following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee
under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of that series for principal (and premium, if any) and interest,
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 Debentures for principal (and
premium, if any) and interest, respectively; and
THIRD: To the Company.
Section 6.04. No holder of any Debenture of any series shall have any
right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to Debentures of that series specifying such Event of Default, as
hereinbefore provided, and unless also the holders of not less than 33% in
aggregate principal amount of the Debentures of such series then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Debenture of that series with every other such taker and holder and the Trustee,
that no one or more holders of Debentures of that series shall have any right in
any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
of such Debentures, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Debentures of that series. For the protection and enforcement of
the provisions of this Section, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.
Section 6.05. (a) All powers and remedies given by this Article to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any others thereof or of any other powers
and remedies available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture or otherwise
established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed as a waiver of any such default or an acquiescence therein;
and, subject to the provisions of Section 6.04, every power and remedy given by
this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
Section 6.06. The holders of a majority in aggregate principal amount
of the Debentures of any series at the time outstanding, determined in
accordance with Section 8.04, 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 that
series; provided, however, that such direction shall not be in conflict with any
rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time outstanding determined in
accordance with Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed might involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of each series at the time outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of
the holders of all of the Debentures of that series waive any past default in
the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on,
any of the Debentures of that series as and when the same shall become due by
the terms of such Debentures or a call for redemption of Debentures of that
series, which default may be waived by the unanimous consent of the holders of
that series so affected. Upon any such waiver, the default covered thereby shall
be deemed to be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debentures of that series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
Section 6.07. The Trustee shall, within 90 days after the occurrence
of a default with respect to a particular series, transmit by mail, first class
postage prepaid, to the holders of Debentures of that series, as their names and
addresses appear upon the Debenture Register, notice of all defaults with
respect to that series known to the Trustee, unless such defaults shall have
been cured or waived before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
grace periods provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the holders of Debentures of that series;
provided further, that in the case of any default of the character specified in
Section 6.01(a)(3) with respect to Debentures of that series, no such notice to
the holders of the Debentures of that series shall be given until at least 30
days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default,
except (i) a default under Section 6.01(a)(1) or (a)(2) as long as the Trustee
is acting as paying agent for such series of Debentures or (ii) any default as
to which the Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Indenture shall have actual knowledge or
obtained written notice.
Section 6.08. All parties to this Indenture agree, and each holder of
any Debentures by his or her 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
any 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, 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, any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE SEVEN
Concerning the Trustee
Section 7.01. (a) The Trustee, prior to the occurrence of an Event of
Default with respect to Debentures of a series and after the curing of all
Events of Default with respect to Debentures of that series which may have
occurred, shall undertake to perform with respect to Debentures of that series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a series
has occurred (which has not been cured or waived), the Trustee shall exercise
with respect to Debentures of that series 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 individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) 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) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing and waiving of all such Events
of Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with respect
to Debentures of that series be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable with respect to
Debentures of that series except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to Debentures of that series 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
Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision 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
to the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated therein);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(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 the holders of not less than a majority in principal amount of the
Debentures of any series at the time outstanding 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 Trustee
under this Indenture with respect to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur or risk
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture or adequate
indemnity against such risk is not reasonably assured to it.
(c) 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 7.01.
Section 7.02. Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, 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;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or General Manager, the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
(unless other evidence in respect thereof is specifically prescribed herein);
(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) is entitled to receive and may, in the
absence of bad faith on its part, rely upon an Officer's 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 or suffered or
omitted 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, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Debentures (which has not been cured
or waived) to exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) If an Event of Default shall have occurred and be continuing, the
Trustee shall be under no obligation to follow any request, order or direction
of the Company if in the reasonable judgment of the Trustee the following of
such request, order or direction would not be in the best interests of all the
holders;
(g) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(h) 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, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing to do so by the holders
of not less than a majority in principal amount of the outstanding Debentures of
the particular series affected thereby (determined as provided in Section 8.04);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand;
(i) 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; and
(j) Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action or omission of the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than three
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
Section 7.03. (a) The recitals contained herein and in the Debentures
(other than the Certificate of Authentication on the Debentures) shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of the Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than
the Trustee.
Section 7.04. The Trustee or any paying agent or Debenture Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee, paying
agent or Debenture Registrar.
Section 7.05. Subject to the provisions of Section 11.06, all moneys
received by the Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but 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 moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
Section 7.06. (a) The Company covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, such
compensation as the Company and the Trustee may agree upon in writing (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, damage, claim, liability or expense including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee) incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the termination of this Indenture. Such additional
indebtedness shall be a senior lien to that of the Debentures upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debentures, and the Debentures are
hereby subordinated to each such senior lien.
(c) When the Trustee incurs expenses or renders services in connection
with an Event of Default, the expenses (including the reasonable charges and
expenses of its counsel) and compensation for its services are intended to
constitute expenses of administration under applicable federal or state
bankruptcy, insolvency or similar law.
Section 7.07. Except as otherwise provided in Section 7.01, whenever
in the administration of the provisions of this Indenture the Trustee shall deem
it necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, it shall be entitled to
receive, and such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively provided and established by an
Officer's Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
Section 7.08. If the Trustee has acquired or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the 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
Indenture.
Section 7.09. There shall at all times be a Trustee with respect to
the Debentures issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a corporation
or other person permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million dollars, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia 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. The Company may not, nor
may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
Section 7.10. (a) The Trustee or any successor hereafter appointed may
at any time resign with respect to the Debentures of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first-class postage prepaid, to the Debentureholders of
that series, as their names and addresses appear upon the Debenture Register.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee with respect to Debentures of that series by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Debentures of that series, or any Debentureholder of that series who has been a
bona fide holder of a Debenture or Debentures for at least six months may,
subject to the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, shall be adjudged a
bankrupt or insolvent, 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, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 6.08, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who has been a bona
fide holder of a Debenture or Debentures 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 and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to that series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
Section 7.11. (a) In case of the appointment hereunder of a successor
trustee with respect to all Debentures, 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, subject
to any prior lien provided for in Section 7.06(b).
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
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 Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
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 Debentures 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) 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, 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 that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; 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,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, 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 Debentures 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, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee or retiring Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such 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.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first-class postage prepaid, to the Debentureholders,
as their names and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
Section 7.12. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Debentures 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 Debentures
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
Section 7.13. If and when the Trustee shall become a creditor of the
Company (or any other obligor upon the Debentures), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any other obligor upon the Debentures).
ARTICLE EIGHT
Concerning the Debentureholders
Section 8.01. Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate principal amount of
the Debentures of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such action
the holders of such majority or specified percentage of that series have joined
therein may be evidenced by any instrument or any number of instruments of
similar tenor executed by such holders of Debentures of that series in person or
by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for that series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
Section 8.02 Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his, her or its agent or proxy and proof of the holding by any
person of any of the Debentures shall be sufficient if made in the following
manner:
(a) the fact and date of the execution by any such
person of any instrument may be proved in any reasonable
manner acceptable to the Trustee;
(b) the ownership of Debentures shall be proved by
the Debenture Register of such Debentures or by a
certificate of the Debenture Registrar thereof; or
(c) the Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
Section 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal of and premium, if any, and (subject to Section 2.03) interest on
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
Section 8.04. At any time the Debentures are held by any holder other
than PSO Capital I, a Delaware statutory business trust, in determining whether
the holders of the requisite aggregate principal amount of Debentures of a
particular series have concurred in any direction, consent or waiver under this
Indenture, Debentures of that series which are owned by the Company or any other
obligor on the Debentures of that series or by any person directly or indirectly
controlling or controlled by or under common control with the Company or any
other obligor on the Debentures of that series shall be disregarded and deemed
not to be outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Debentures of such series which the
Trustee actually knows are so owned shall be so disregarded. Debentures so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Debentures and
that the pledgee is not a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
such other obligor. In case of a dispute as to such right, any decision by the
Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
Section 8.05. At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.01, of the taking of any action by the
holders of the majority or percentage in aggregate principal amount of the
Debentures of a particular series specified in this Indenture in connection with
such action, any holder of a Debenture of that series which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee, and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debenture. Except as aforesaid, any such action taken by the holder of any
Debenture shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debenture, and of any Debenture issued in exchange
therefor, on registration of transfer thereof or in place thereof, irrespective
of whether or not any notation in regard thereto is made upon such Debenture.
Any action taken by the holders of the majority or percentage in aggregate
principal amount of the Debentures of a particular series specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the holders of all the Debentures of that series.
ARTICLE NINE
Supplemental Indentures
Section 9.01. In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
contained herein or otherwise established with respect to the Debentures;
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of
the Debentures of all or any series as the Board of Directors and the
Trustee shall consider to be for the protection of the holders of
Debentures of all or any series, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions a default or an Event of
Default with respect to that series permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction, condition or provision, such supplemental indenture may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults), may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right
of the holders of a majority in aggregate principal amount of the
Debentures of such series to waive such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this indenture as shall not be
inconsistent with the provisions of this Indenture and shall not adversely
affect the interests of the holders of the Debentures of any series; or
(d) 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 Debenture outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee 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.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02. With the consent (evidenced as provided in Section 8.01)
of the holders of not less than a majority in aggregate principal amount of the
Debentures of each series affected by such supplemental indenture or indentures
at the time outstanding, the Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures of that series under this Indenture;
provided, however, that no such supplemental indenture shall (i) extend the
Fixed Maturity of any Debentures of any series, reduce the principal amount
thereof, reduce the rate or extend the time of payment of interest thereon or
reduce any premium payable upon the redemption thereof, without the consent of
the holder of each Debenture so affected or (ii) reduce the aforesaid percentage
of Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Debenture
then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of
any series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first-class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to that series, be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.04. Debentures of any series, affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
Section 9.05. The Trustee, subject to the provisions of Section 7.01,
is entitled to receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.
ARTICLE TEN
Consolidation, Merger and Sale
Section 10.01. Nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Company or its
successor or successors as an entirety, or substantially as an entirety, to any
other corporation (whether or not affiliated with the Company or its successor
or successors) authorized to acquire and operate the same; provided, however,
the Company hereby covenants and agrees that, upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment of the principal of (premium, if any) and interest on all of the
Debentures of all series in accordance with the terms of each series, according
to their tenor, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture with respect to each series or
established with respect to each series pursuant to Section 2.01 to be kept or
performed by the Company, shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which the Company
shall have been merged, or by the entity which shall have acquired such
property.
Section 10.02. (a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures
of all series outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture or established with respect to each
series of the Debentures pursuant to Section 2.01 to be performed by the Company
with respect to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and thereupon the predecessor corporation shall
be relieved of all obligations and covenants under this Indenture and the
Debentures, except the provisions of Section 7.06 to the extent such provisions
relate to matters occurring before any such consolidation, merger, sale,
conveyance, transfer or other disposition. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Debentures, any or all of
the Debentures issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
successor company, 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 Debentures which previously shall have been
signed and delivered by the officers of the predecessor Company to the Trustee
for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not in
substance) may be made in the Debentures thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debentures
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other corporation (whether or
not affiliated with the Company).
Section 10.03. The Trustee, subject to the provisions of Section 7.01,
is entitled to receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
Section 11.01. This Indenture shall upon Company request cease to be
of further effect (except as hereinafter expressly provided), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) both
(1) all Debentures theretofore authenticated and delivered (other
than Debentures which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.07 have been
delivered to the Trustee for cancellation; and
(2) all Debentures not theretofore delivered to the Trustee for
cancellation shall be deemed to have been paid in accordance with
Section 11.03;
(b) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(c) 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.
In the event there shall be Debentures of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Debentures of all series as to which it is Trustee and if
the other conditions thereto are met. In the event there shall be two or more
Trustees hereunder, then the effectiveness of each such instrument from each
Trustee hereunder shall be conditioned upon receipt of such instruments from
each other Trustee hereunder.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article
Eleven shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 7.06, any and all money, securities and
other property then held by the Trustee for the benefit of the holders of the
Debentures other than money and Government Obligations held by the Trustee
pursuant to Section 11.04.
Section 11.02. If at any time all such Debentures of a particular
series not heretofore delivered to the Trustee for cancellation or which have
not become due and payable as described in Section 11.01 shall have been paid by
the Company by depositing irrevocably with the Trustee as trust funds moneys or
an amount of Governmental Obligations sufficient to pay at maturity or upon
redemption all such Debentures of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if any) and interest
due or to become due to such date of maturity or date fixed for redemption, as
the case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company with respect to that series, then after
the date such moneys or Governmental Obligations, as the case may be, are
deposited with the Trustee: (a) the Company shall be released from its covenants
and other obligations contained in Sections 4.05, 5.03, 10.01, 10.02, and 10.03
and may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant or obligation, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or obligation or by reason of any reference in any such covenant or
obligation to any other provision of this Indenture or any other document, and
any failure to comply with any such covenant or obligation shall not constitute
a Default or an Event of Default with respect to the Debentures of such series;
(b) the occurrence of any event specified in Section 6.01(a)(3) shall not
constitute a Default or an Event of Default with respect to the Debentures of
such series; (c) the Debentures of such series shall thereafter be deemed not to
be "outstanding" solely for purposes of determining whether the Debentureholders
of the requisite aggregate principal amount of Debentures have concurred in any
act under this Indenture with respect to any covenant or obligation from which
the Company has been released pursuant to (a) above or with respect to any event
that shall have ceased to constitute a Default or Event of Default with respect
to Debentures of such series pursuant to (b) above (or the consequences thereof)
PROVIDED that the provisions of this Section 11.02 shall not be deemed to
relieve the Company of its obligations with respect to the payment of the
principal of (and premium, if any) or interest on the outstanding Debentures of
such series. The release of the Company from its obligations under this
Indenture, as provided for in this Section 11.02, shall be subject to the
further condition that the Company first shall have caused to be delivered to
the Trustee an Opinion of Counsel to the effect that Debentureholders of a
series with respect to which a deposit has been made in accordance with this
Section 11.02 will not realize income, gain or loss for federal income tax
purposes as a result of such deposit and release, and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit and release had not occurred.
Section 11.03. If, in addition to satisfying the conditions set forth
in Section 11.01 or 11.02 (except for the requirement of an Opinion of Counsel),
the Company delivers to the Trustee an Opinion of Counsel to the effect that (a)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date of this Indenture there has been
a change in applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Debentureholders of a series with respect to which a deposit has been made in
accordance with Section 11.01 or 11.02 will not realize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (c) the deposit shall not result
in the Company, the Trustee or the trust being deemed an "investment company"
under the Investment Company Act of 1940, as amended, then, in such event, the
Company will be deemed to have paid and discharged the entire indebtedness on
that series and the holder thereof shall thereafter be entitled to receive
payment solely from the trust fund described above. Notwithstanding the
satisfaction and discharge of any Debentures as aforesaid, the obligations of
the Company in respect of such Debentures under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article Eleven shall survive.
Section 11.04. All moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall
be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular series of Debentures for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.05. In connection with the satisfaction and discharge of
this Indenture all moneys or Governmental Obligations then held by any paying
agent under the provisions of this Indenture shall, upon demand of the Company,
be paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys or Governmental Obligations.
Section 11.06. Any moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company, in trust for
payment of principal of or premium or interest on the Debentures of a particular
series that are not applied but remain unclaimed by the holders of such
Debentures for at least two years after the date upon which the principal of
(and premium, if any) or interest on such Debentures shall have respectively
become due and payable, shall, upon written notice from the Company, be repaid
to the Company on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
Section 12.01. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Debenture, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Debentures or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law, in equity or
by constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
Section 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
Section 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
Section 13.03. Except as otherwise expressly provided herein, any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first-class
postage prepaid in a post-office letter box addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Central and South
West Corporation, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202, Attention:
Director, Finance. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
Section 13.04. This Indenture and each Debenture shall be deemed to be
a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of that State, without regard to
the conflicts of laws principles thereof.
Section 13.05. (a) Upon any application or demand by the Company to
the Trustee to take any action under any of the provisions of this Indenture,
the Company shall furnish to the Trustee an Officer's Certificate stating that
all conditions precedent 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 have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (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 such person, he has 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 or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.06. Simultaneously with the execution of this Indenture,
the Company shall deliver to the Trustee an Opinion of Counsel stating that, in
the opinion of such counsel, (a) this Indenture has been duly authorized by and
lawfully executed and delivered on behalf of the Company, is in full force and
effect and is legal, valid and binding upon the Company in accordance with its
terms, except to the extent limited by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights and (b) the Debentures have been
authorized, executed and delivered by the Company and constitute legal, valid
and binding obligations of the Company in accordance with their terms.
Section 13.07. Except as provided pursuant to Section 2.01 pursuant to
a Board Resolution, and as set forth in an Officer's Certificate, or established
in one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Debenture or the date of
redemption of any Debenture shall not be a Business Day then payment of interest
or principal (and premium, if any) may be made on the next succeeding Business
Day with the same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such nominal date.
Section 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 3.18(c) of the Trust Indenture Act, such imposed duties shall control.
Section 13.09. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
Section 13.10. In case any one or more of the provisions contained in
this Indenture or in the Debentures of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Debentures, but this Indenture and such Debentures shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
Section 13.11. The Company will have the right at all times to assign
any of its rights or obligations under this Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. The Indenture may
not otherwise be assigned by the parties thereto.
Section 13.12. The parties intend that, for each holder of a Debenture
and each person that acquires a beneficial ownership interest in a Debenture,
such Debentures shall constitute indebtedness for purposes of United States
federal, state and local taxes.
ARTICLE FOURTEEN
Subordination of Debentures
Section 14.01. The Company covenants and agrees, and each holder of
Debentures issued hereunder by his acceptance thereof likewise covenants and
agrees, that all Debentures shall be issued subject to the provisions of this
Article Fourteen; and each holder of a Debenture, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of and premium, if any, and interest on
all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the occurrence of
any default or Event of Default hereunder.
Section 14.02. In the event and during the continuation of any default
in the payment of principal, premium, interest or any payment due on any Senior
Indebtedness continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness (and the Trustee has received
written notice thereof from the Company or one or more holders of Senior
Indebtedness or their representative or representatives or a trustee), unless
and until such default shall have been cured or waived or shall have ceased to
exist, and in the event that the maturity of any Senior Indebtedness has been
accelerated because of a default (and the Trustee has received written notice
thereof from the Company or one or more holders of Senior Indebtedness or their
representative or representatives or a trustee), then no payment shall be made
by the Company with respect to the principal (including redemption and sinking
fund payments) of or premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by the
preceding paragraph of this Section 14.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
Section 14.03. Upon any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made on account of the principal (and premium, if any) or interest on the
Debentures; and upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article Fourteen, shall be paid by the Company, by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, by the holders of the Debentures or by the
Trustee under this Indenture if received by them or it directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Fourteen, the words, "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, the payment of which
is subordinated at least to the extent provided in this Article Fourteen with
respect to the Debentures to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Ten hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 14.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Ten hereof.
Nothing in Section 14.02 or in this Section 14.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.
Section 14.04. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Debentures shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article Fourteen,
and no payment over pursuant to the provisions of this Article Fourteen, to or
for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article Fourteen are
and are intended solely for the purposes of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness on the other hand.
Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Fourteen, the Trustee, subject to the provision of Section 7.01,
and the holders of the Debentures shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Debentures, for the purposes of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness 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 Fourteen.
Section 14.05. Each holder of a Debenture by acceptance thereof
authorizes and directs the Trustee in his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Fourteen and appoints the Trustee his attorney-in-fact for any and
all such purposes.
Section 14.06. The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or paying
agent in respect of the Debentures pursuant to the provisions of this Article
Fourteen. Notwithstanding the provisions of this Article Fourteen 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 of
monies to or by the Trustee or paying agent in respect of the Debentures
pursuant to the provisions of this Article Fourteen, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such facts
exist; provided that if the Trustee shall not have received the notice provided
for in this Section 14.06 at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes 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.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
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 Fourteen, 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 14.07. The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Fourteen in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee or any Authenticating Agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Fourteen, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 7.01, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Debentures,
the Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Fourteen or otherwise.
Section 14.08. No right of any present or future holder of any Senior
Indebtedness 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 which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the holders of the Debentures to the holders of
Senior Indebtedness, 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 Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other person.
The Bank of New York, as Trustee, hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Wendy G. Hargus, Treasurer
Attest:
By:
Lina Holm, Secretary
THE BANK OF NEW YORK
as Trustee
By:
Its:
Attest:
By:
Its:
STATE OF )
) ss.
COUNTY OF )
On _____________________, 199_ before me personally appeared
[_________________] and [_________________] personally known to me or proved to
me on the basis of satisfactory evidence to be the persons whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacities, and that by their signatures on the
instrument the persons, or the entity upon behalf of which the persons acted,
executed the instrument.
Witness my hand and official seal.
------------------------------
Signature of Notary Public
My Commission Expires:
STATE OF )
) ss.
COUNTY OF )
On this day of May 1, 1997 before me personally appeared Wendy G.
Hargus proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that she
executed the same in her authorized capacity and that by her signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
Witness my hand and official seal.
---------------------------
Signature of Notary Public
My Commission Expires:
PUBLIC SERVICE COMPANY OF OKLAHOMA
AND
THE BANK OF NEW YORK,
as Trustee
--------------------
First Supplemental Indenture
Dated as of May 1, 1997
TO
INDENTURE
Dated as of May 1, 1997
--------------------
8% Junior Subordinated Deferrable Interest Debentures, Series A
FIRST SUPPLEMENTAL INDENTURE, dated as of the first day of May,
1997 (the "First Supplemental Indenture"), between PUBLIC SERVICE COMPANY OF
OKLAHOMA, a corporation duly organized and existing under the laws of the State
of Oklahoma (hereinafter sometimes referred to as the "Company" or "PSO"), and
THE BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter
sometimes referred to as the "Trustee") (under the Indenture dated as of May 1,
1997 between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of its junior subordinated debentures
(the "Debentures"), which Debentures are to be issued from time to time in such
series as may be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered thereunder
as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to be
known as its 8% Junior Subordinated Deferrable Interest Debentures, Series A
(such series being hereinafter referred to as the "Series A Debentures"), which
Series A Debentures will be issued to evidence a loan made to the Company of the
proceeds from the issuance by PSO Capital I, a Delaware business trust (the
"Trust"), of preferred undivided beneficial interests in the assets of the Trust
(the "Preferred Securities") and common undivided beneficial interests in the
assets of the Trust (the "Common Securities") pursuant to the terms of an
Amended and Restated Trust Agreement (the "Trust Agreement") dated as of May 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 (the "Administrative Trustees"), which Trust Agreement
shall be substantially in the form attached hereto as Annex A, the form and
substance of such Series A Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this First Supplemental
Indenture; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture,
and all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and acceptance
of the Series A Debentures by the holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
Additional Definitions
SECTION 1.01. For all purposes of this First Supplemental
Indenture, capitalized terms used herein without definition shall have the
meanings specified in the Indenture.
SECTION 1.02. The terms defined in this Section, for all purposes
of this First Supplemental Indenture, shall have the respective meanings
specified in this Section.
"Additional Sums" has the meaning specified in Section 5.05 of
this First Supplemental Indenture.
"Additional Taxes" means the sum of any additional taxes, duties
and other governmental charges to which the Trust has become subject from time
to time as a result of a Tax Event.
"Common Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Distributions" means amounts payable in respect of the Preferred
Securities and Common Securities as provided in the Trust Agreement.
"Extension Period' has the meaning specified in Section 4.01 of
this First Supplemental Indenture.
"Guarantee" means the guarantee by the Company of Distributions
on the Preferred Securities of the Trust to the extent provided in the Guarantee
Agreement, substantially in the form attached hereto as Annex B.
"Investment Company Event" means, in respect of the Trust, the
receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a
recognized national tax and securities practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law), the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities of the Trust.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Preferred Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Property Trustee" means, in respect of the Trust, the commercial
bank or trust company identified as the Property Trustee in the Trust Agreement,
solely in its capacity as Property Trustee of the Trust under the 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.
"Special Event" means a Tax Event or an Investment Company Event.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities of the Trust, there is more than an insubstantial risk that (i) the
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 A Debentures, (ii) interest payable by the
Company on the Series A Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by PSO, in whole or in part, for
United States federal income tax purposes or (iii) the Trust 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" has the meaning specified in the second recital of this
First Supplemental Indenture.
"Trust Agreement" has the meaning specified in the second recital
of this First Supplemental Indenture.
ARTICLE TWO
General Terms and Conditions of
the Series A Debentures
SECTION 2.01. There shall be and is hereby authorized a series of
Debentures designated the "8% Junior Subordinated Deferrable Interest
Debentures, Series A," limited in aggregate principal amount to $77,320,000,
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series A Debentures. The Series A Debentures
shall mature and the principal shall be due and payable, together with all
accrued and unpaid interest thereon, on April 30, 2037, provided that the
Company may shorten such maturity date at any time and from time to time at the
election of the Company, but in no event shall such maturity date be earlier
than April 30, 2002, and further provided that if the Company exercises its
right to liquidate the Trust and distribute the Debentures to holders of the
Preferred Securities pursuant to Section 904 of the Trust Agreement, the
maturity date of such Debentures may be shortened to any date selected by the
Company that is (i) no earlier than the date five years after the initial
issuance of the Preferred Securities and (ii) no later than April 30, 2037. The
Series A Debentures shall be issued in the form of registered Series A
Debentures without coupons.
SECTION 2.02. The Series A Debentures shall be issued in
certificated form and registered in the name of the Property Trustee or its
nominee, subject to the exchange of such certificated Series A Debentures for a
Global Debenture as provided in the Trust Agreement. Series A Debentures
represented by a Global Debenture will not be exchangeable for, and will not
otherwise be issuable as, Series A Debentures in certificated form, except as
provided in this First Supplemental Indenture. Principal and interest on the
Series A Debentures will be payable, the transfer of such Series A Debentures
will be registrable and such Series A Debentures will be exchangeable for Series
A Debentures bearing identical terms and provisions at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register or, with respect to a registered holder of
$1,000,000 or more in aggregate principal amount of Series A Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date (as defined in Section 2.03 below) electing to
have payments made by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such designated
account. The Company and the Trustee will act as co-paying agents for the Series
A Debentures. Payments of principal of and interest on the Series A Debentures
issued as a Global Debenture will be made to the Depositary. The Depository
Trust Company (55 Water Street, New York) will initially act as the Depositary
for the Global Debenture.
A Global Debenture shall be exchangeable for Series A Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Debenture and no successor depositary
shall have been appointed, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
Global Debenture shall be so exchangeable or (iii) the Global Debenture was
issued pursuant to Section 904 of the Trust Agreement and there shall have
occurred and be continuing an Event of Default with respect to such Global
Debenture and the holders of at least a majority of the beneficial interests in
such Global Debenture advise the Trustee in writing that the continuation of a
book-entry system through the Depositary is no longer in their best interest,
then the Trustee shall notify the Depositary and the Depositary shall notify all
holders of beneficial interests in the Global Debenture of the occurrence of
such event and the availability of Series A Debentures to such holders. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as the
Depositary shall direct.
SECTION 2.03. Each Series A Debenture will bear interest at the
rate of 8% per annum from and including the original date of issuance or from
the most recent Interest Payment Date referred to below to which interest has
been paid or duly provided for until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing on June 30, 1997, to the person in whose name such Series A
Debenture or any predecessor Series A Debenture is registered at the close of
business on the Business Day next preceding that Interest Payment Date (each, a
"Record Date"); provided, however, that if the Series A Debentures shall not be
in the form of a Global Debenture, the record date shall be the 15th day of the
month in which the relevant Interest Payment Date occurs. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series A
Debenture (or one or more predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Series A Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Series A
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture; provided, however, that
interest (other than interest described in the next sentence) shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period, unless the Company has elected to make a full or partial
payment of interest accrued on the Series A Debentures on that Interest Payment
Date. Any partial payment of interest accrued on the Series A Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to such registered holders based upon the principal amount of Series A
Debentures then held by such registered holders.
The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period shorter
than a full calendar month, on the basis of the actual number of days elapsed in
such period. In the event that any date on which interest is payable on the
Series A Debentures is not a Business Day, then payment of interest 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 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.
ARTICLE THREE
Redemption of the Series A Debentures
SECTION 3.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A Debentures,
in whole, at any time, or in part, from time to time, on or after April 30,
2002, at a redemption price equal to 100% of the principal amount of Series A
Debentures to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption. If the Series A Debentures are only partially redeemed
pursuant to this Section, the Series A Debentures will be redeemed by lot or by
any other method utilized by the Trustee, such method to be determined solely in
the discretion of the Trustee. The Company may not redeem the Series A
Debentures in part unless all accrued and unpaid interest has been paid in full
on all outstanding Series A Debentures for all interest periods terminating on
or prior to the date of redemption.
SECTION 3.02. If a Special Event in respect of the Trust shall
occur and be continuing, the Company may, at its option, redeem the Series A
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole, but not in part, subject to the provisions of the Indenture. The
redemption price for any Series A Debenture so redeemed shall be equal to 100%
of the principal amount of the Series A Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of redemption.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Subject to Section 4.06 of the Indenture and
Section 5.06 of this First Supplemental Indenture, the Company shall have the
right, at any time during the term of the Series A Debentures, to defer the
payment of interest on such Series A Debentures at any time and from time to
time for a period not to exceed 20 consecutive calendar quarters from the last
Interest Payment Date to which interest was paid in full (but in no event beyond
the maturity of the Series A Debentures) (each, an "Extension Period"), during
which periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of such Extension Period
the Company shall pay all interest then accrued and unpaid thereon. Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions of such Extension Period shall not exceed
20 consecutive quarters or extend beyond the maturity of the Series A
Debentures. No such Extension Period shall end on a date other than an Interest
Payment Date. Upon termination of any such Extension Period and upon the payment
of all accrued and unpaid 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.
SECTION 4.02. The Company shall give the Trustee and the
Administrative Trustees written notice of (i) any election by the Company to
initiate an Extension Period and the duration thereof, (ii) any election by the
Company to extend an Extension Period beyond the Interest Payment Date on which
that Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full or partial
payment of interest accrued on the Series A Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment. In no event
shall such notice by the Company be given less than one Business Day prior to
the earlier of (A) the date the Administrative Trustees are required to give
notice to The New York Stock Exchange or other applicable self-regulatory
organization or to the holders of the Preferred Securities of the record date or
the date Distributions are payable but in any event not less than one Business
Day prior to such record date or (B) one Business Day prior to such date the
Distributions on the Preferred Securities would have been payable except for the
election to begin such Extension Period. Upon receipt of any such notice, the
Trustee shall give written notice of the Company's election by mail to the
Series A Debentureholders within five Business Days. The Company shall make a
public announcement of any such election in accordance with New York Stock
Exchange rules not less than five Business Days prior to such Record Date.
ARTICLE FIVE
Additional Terms Relating to the Preferred Securities
SECTION 5.01. (a) For so long as any Preferred Securities remain
outstanding, if, upon an Event of Default, the Trustee fails or the holders of
not less than 33% in aggregate principal amount of the outstanding Series A
Debentures fail to declare the principal of all of the Series A Debentures to be
immediately due and payable, the holders of at least 33% in aggregate
liquidation preference of the Preferred Securities then outstanding (determined
in accordance with the Trust Agreement) shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Series A Debentures
shall become immediately due and payable (subject to Section 6.01(c) of the
Indenture), provided that the payment of principal and interest on such Series A
Debentures shall remain subordinated to the extent provided in the Indenture.
(b) For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
(c) For so long as any Preferred Securities remain outstanding,
to the fullest extent permitted by law, upon the occurrence of an Event of
Default described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any
holder of Preferred Securities shall have the right to institute a proceeding
directly against the Company for enforcement of payment to such holder of the
principal of or interest on the Series A Debentures having a principal amount
equal to the aggregate liquidation preference of the related Preferred
Securities held by such holder after the due date specified for such payment in
the Series A Debentures.
SECTION 5.02. For so long as any Preferred Securities remain
outstanding, if the holders of a majority in aggregate principal amount of the
Series A Debentures fail to waive an Event of Default in accordance with Section
6.06 of the Indenture, the holders of a majority in aggregate liquidation
preference of the Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) have such right.
SECTION 5.03. For so long as any Preferred Securities remain
outstanding, the Company shall not consolidate with or merge into any other
corporation 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 such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Guarantee and
does not give rise to any breach or violation of the Trust Agreement or the
Guarantee.
SECTION 5.04. For so long as any Preferred Securities remain
outstanding, the Company shall not terminate the Indenture or amend or
supplement the Indenture in any manner that materially adversely affects the
interests of the holders of the Preferred Securities, and subject to Section
6.01(c) of the Indenture, no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective without the prior consent to
such waiver of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) unless and until the principal of the
Series A Debentures and all accrued and unpaid interest thereon have been paid
in full.
SECTION 5.05. In the event that (i) the Trust is the holder of
all of the Outstanding Series A Debentures, (ii) a Tax Event in respect of the
Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Series A Debentures pursuant to Section 3.02 of this First
Supplemental Indenture or (b) terminated the Trust pursuant to Section 902(b) of
the Trust Agreement, the Company shall pay to the Trust (and its permitted
successors or assigns under the Trust Agreement) for so long as the Trust (or
its permitted successor or assignee) is the registered holder of any Series A
Debentures, such additional amounts as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by the Trust on the related Preferred
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 the Indenture or the
Series A Debentures there is a reference in any context to the payment of
principal of or interest on the Series A Debentures, 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 interest pursuant to Section 4.01 of this
First Supplemental Indenture or the Series A Debentures shall not defer the
payment of any Additional Sums that may be due and payable during such interest
payment period.
SECTION 5.06. For so long as any Preferred Securities remain
outstanding, the Company covenants and agrees with each holder of Series A
Debentures issued to the Trust that it will not, and it will not permit any
Subsidiary of the Company to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank PARI PASSU with or junior in
interest to the Series A Debentures or make any guarantee payments with respect
to the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of the Company or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of the Company that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
the Company and then outstanding and (2) the capital and surplus of the Company
to be stated on the books of account of the Company after giving effect to such
payment, provided, however, that any moneys deposited in any sinking fund and
not in violation of this provision may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by the Company with respect to any securities of a
subsidiary of the Company, provided that the proceeds from the issuance of such
securities were used to purchase Debentures of any series) if at such time (i)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) the Company shall have given notice of its election to begin an Extension
Period as provided herein and shall not have rescinded such notice, or such
period, or any extension thereof, shall be continuing.
SECTION 5.07. For so long as any Preferred Securities remain
outstanding, the Company also covenants with each holder of Series A Debentures
issued to the Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
the Trust, except (a) in connection with a distribution of the Series A
Debentures to the holders of Preferred Securities in liquidation of the Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to remain classified as a "grantor trust" and not to be classified as an
association taxable as a corporation for United States federal income tax
purposes.
ARTICLE SIX
Form of Series A Debenture
The Series A Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be issued as a Global Debenture,
insert--This Debenture is a Global Debenture 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 Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture 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, or to a successor Depositary or
to a nominee of such successor Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture 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.]
No.___________ $__________
CUSIP No. ______________
Public Service Company of Oklahoma
8%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
PUBLIC SERVICE COMPANY OF OKLAHOMA, a corporation duly organized
and existing under the laws of the State of Oklahoma (herein referred to as the
"Company", which term includes any successor corporation under the Indenture),
for value received, hereby promises to pay to _____________________ or
registered assigns, the principal sum of $____, on April 30, 2037, or on such
earlier date as the Company may elect subject to the terms of Section 2.01 of
the First Supplemental Indenture and to pay interest on such principal sum from
and including May 2, 1997 or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing on June 30, 1997, at the rate of 8% per
annum, until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months and, for any period shorter than a full calendar month, on the
basis of the actual number of days elapsed in such period. In the event that any
date on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
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 such date. 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 Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the Business Day
next preceding that Interest Payment Date (each a "Record Date"); provided,
however, that if this Debenture shall not be in the form of a Global Debenture
the record date shall be the 15th day of the month in which the relevant
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may then be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture
hereinafter referred to; provided, however, that interest shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period (as defined below), unless the Company has elected to make a
full or partial payment of interest accrued on this Debenture on that Interest
Payment Date. Any partial payment of interest accrued on this series of
Debentures on any Interest Payment Date falling within an Extension Period shall
be paid pro rata to the registered holder of this Debenture based upon the
principal amount of this Debenture in relation to the aggregate principal amount
of all Debentures of this series then outstanding. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered holder at such address
as shall appear in the Debenture Register or, with respect to a registered
holder of $1,000,000 or more in aggregate principal amount of Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee its attorney-in-fact for
any and all such purposes. Each holder hereof, by its acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By
Wendy G. Hargus, Treasurer
Attest:
, Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee or as Authenticating Agent
By
Authorized Signatory
(REVERSE)
8% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
(continued)
This Debenture is one of a duly authorized series of debentures
of the Company (herein sometimes referred to as the "Debentures"), specified in
the Indenture (as defined below), all issued or to be issued in one or more
series under and pursuant to an Indenture dated as of May 1, 1997 duly executed
and delivered between the Company and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (herein referred to as the "Trustee"), as supplemented
by the First Supplemental Indenture dated as of May 1, 1997 between the Company
and the Trustee (such Indenture as so supplemented being hereinafter referred to
as the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series which may vary as to amount, date of maturity, rate of
interest and in other respects as in the Indenture provided. This series of
Debentures is limited in aggregate principal amount as specified in the First
Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Debentures of this series at the
option of the Company, without premium or penalty, in whole or in part at any
time and from time to time on or after April 30, 2002 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount of the
Debentures of this series to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption. If the Debentures of this series are
only partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures of this series will be redeemed by lot or by any other method
utilized by the Trustee, such method to be determined solely in the discretion
of the Trustee.
If a Special Event in respect of the Trust shall occur and be
continuing, the Company may, at its option, redeem this Debenture at any time
within 90 days of the occurrence of such Special Event, in whole, but not in
part, subject to the provisions of the Indenture. The redemption price for any
Debenture of this series so redeemed shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such redemption.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Debentures of
this series shall have occurred and be continuing, the principal of all of the
Debentures of this series may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of the Debentures of this series upon compliance by the
Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
For so long as any Preferred Securities remain outstanding, if,
upon an Event of Default, the Trustee fails or the holders of not less than 33%
in principal amount of the outstanding Debentures of this series fail to declare
the principal of all of the Debentures of this series to be immediately due and
payable, the holders of at least 33% in aggregate liquidation preference of the
Preferred Securities then outstanding (determined in accordance with the related
Trust Agreement) shall have such right by a notice in writing to the Company and
the Trustee; and upon any such declaration such principal amount of and the
accrued interest on all of the Debentures of this series shall become
immediately due and payable (subject to Section 6.01(c) of the Indenture),
provided that the payment of principal and interest on such Debentures shall
remain subordinated to the extent provided in the Indenture.
For so long as any Preferred Securities remain outstanding, if,
upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
For so long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series A Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series A
Debentures.
No reference herein to the Indenture and no provision of this
Debenture 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 Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to the provisions of the Indenture, the Company shall
have the right, at any time during the term of this series of Debentures, to
defer the payment of interest on this series of Debentures at any time and from
time to time for a period not to exceed 20 consecutive calendar quarters from
the last Interest Payment Date to which interest was paid in full (but in no
event beyond the maturity of the Series A Debentures) (each, an "Extension
Period") during which periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of such
Extension Period the Company shall pay all interest then accrued and unpaid
thereon. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions of such Extension Period
shall not exceed 20 consecutive quarters or extend beyond the maturity of the
Series A Debentures. Upon termination of any such Extension Period and upon the
payment of all accrued and unpaid interest then due, the Company may select 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.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If the Debenture is to be issued as a Global Debenture,
insert--This Global Debenture is exchangeable for Debentures in certificated
form only under certain limited circumstances set forth in the Indenture.] The
Debentures of this series are issuable in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE SEVEN
Original Issue of Series A Debentures
Series A Debentures in the aggregate principal amount of
$77,320,000 may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Debentures to or upon the written order of the Company, signed by its
Chairman, President, Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
the form of Series A Debenture that are defined in the Indenture shall have the
several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture 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.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Wendy G. Hargus, Treasurer
THE BANK OF NEW YORK, as Trustee
By:
Its:
AMENDED AND RESTATED
TRUST AGREEMENT
among
PUBLIC SERVICE COMPANY OF OKLAHOMA, 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 May 1, 1997
PSO CAPITAL I
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
Section 101. Definitions.......................................... 2
ARTICLE II
Establishment of the Trust
Section 201. Name.................................................. 11
Section 202. Office of the Delaware Trustee; Principal Place
of Business........................................... 11
Section 203. Initial Contribution of Trust Property;
Organizational Expenses............................... 12
Section 204. Issuance of the Preferred Securities.................. 12
Section 205. Issuance of the Common Securities; Subscription
and Purchase of Debentures..................... 12
Section 206. Declaration of Trust.................................. 12
Section 207. Authorization to Enter into Certain Transactions...... 13
Section 208. Assets of Trust....................................... 17
Section 209. Title to Trust Property............................... 17
ARTICLE III
Payment Account
Section 301. Payment Account....................................... 17
ARTICLE IV
Distributions; Redemption
Section 401. Distributions......................................... 18
Section 402. Redemption............................................ 19
Section 403. Subordination of Common Securities.................... 21
Section 404. Payment Procedures.................................... 21
Section 405. Tax Returns and Reports............................... 22
Section 406. Payment of Taxes, Duties, Etc. of the Trust........... 22
ARTICLE V
Trust Securities Certificates
Section 501. Initial Ownership..................................... 22
Section 502. The Trust Securities Certificates..................... 22
Section 503. Execution and Delivery of Trust Securities
Certificates.......................................... 23
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates............................... 24
Section 506. Persons Deemed Securityholders........................ 24
Section 507. Access to List of Securityholders' Names and
Addresses............................................. 25
Section 508. Maintenance of Office or Agency....................... 25
Section 509. Appointment of Paying Agent........................... 25
Section 510. Ownership of Common Securities by Depositor........... 26
Section 511. Book-Entry Preferred Securities Certificates;
Common Securities Certificate......................... 26
Section 512. Notices to Clearing Agency............................ 27
Section 513. Definitive Preferred Securities Certificates.......... 27
Section 514. Rights of Securityholders............................. 28
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 601. Limitations on Voting Rights.......................... 30
Section 602. Notice of Meetings.................................... 31
Section 603. Meetings of Preferred Securityholders................. 31
Section 604. Voting Rights......................................... 31
Section 605. Proxies, etc.......................................... 32
Section 606. Securityholder Action by Written Consent.............. 32
Section 607. Record Date for Voting and Other Purposes............. 32
Section 608. Acts of Securityholders............................... 32
Section 609. Inspection of Records................................. 33
ARTICLE VII
Representations and Warranties
Section 701. Representations and Warranties of the Bank and the
Property Trustee............................... 34
Section 702. Representations and Warranties of the Delaware Bank
and the Delaware Trustee.............................. 35
Section 703. Representations and Warranties of Depositor........... 36
ARTICLE VIII
The Trustees
Section 801. Certain Duties and Responsibilities................... 37
Section 802. Certain Notices....................................... 38
Section 803. Certain Rights of Property Trustee.................... 39
Section 804. Not Responsible for Recitals or Issuance of
Securities............................................ 41
Section 805. May Hold Securities................................... 41
Section 806. Compensation; Indemnity; Fees......................... 41
Section 807. Corporate Property Trustee Required; Eligibility
of Trustees........................................... 42
Section 808. Conflicting Interests................................. 42
Section 809. Co-Trustees and Separate Trustee...................... 42
Section 810. Resignation and Removal; Appointment of Successor..... 44
Section 811. Acceptance of Appointment by Successor................ 45
Section 812. Merger, Conversion, Consolidation or Succession to
Business.............................................. 46
Section 813. Preferential Collection of Claims Against Depositor
or Trust.............................................. 46
Section 814. Reports by Property Trustee........................... 47
Section 815. Reports to the Property Trustee....................... 47
Section 816. Evidence of Compliance with Conditions Precedent...... 47
Section 817. Number of Trustees.................................... 48
Section 818. Delegation of Power................................... 48
Section 819. Voting................................................ 48
ARTICLE IX
Termination, Liquidation and Merger
Section 901. Termination Upon Expiration Date...................... 49
Section 902. Early Termination..................................... 49
Section 903. Termination........................................... 49
Section 904. Liquidation........................................... 49
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust............................. 51
ARTICLE X
Miscellaneous Provisions
Section 1001. Limitation of Rights of Securityholders............... 52
Section 1002. Amendment............................................. 52
Section 1003. Separability.......................................... 54
Section 1004. Governing Law......................................... 54
Section 1005. Payments Due on Non-Business Day...................... 54
Section 1006. Successors............................................ 54
Section 1007. Headings.............................................. 54
Section 1008. Reports, Notices and Demands.......................... 55
Section 1009. Agreement Not to Petition............................. 55
Section 1010. Trust Indenture Act; Conflict with Trust
Indenture Act......................................... 56
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture...................................... 56
Section 1012. Counterparts........................................... 57
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities
PSO CAPITAL I
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
ss. 310 (a)(1)........................................... 807
(a)(2)........................................... 807
(a)(3)........................................... 809
(a)(4)........................................... 207(a)(ii)
(b).............................................. 808
ss. 311 (a).............................................. 813
(b).............................................. 813
ss. 312 (a).............................................. 507
(b).............................................. 507
(c).............................................. 507
ss. 313 (a).............................................. 814(a)
(a)(4)........................................... 814(b)
(b).............................................. 814(b)
(c).............................................. 1008
(d).............................................. 814(c)
ss. 314 (a).............................................. 815
(b).............................................. Not Applicable
(c)(1)........................................... 816
(c)(2)........................................... 816
(c)(3)........................................... Not Applicable
(d).............................................. Not Applicable
(e).............................................. 101, 816
ss. 315 (a).............................................. 801(a), 803(a)
(b).............................................. 802, 1008
(c).............................................. 801(a)
(d).............................................. 801, 803
(e).............................................. Not Applicable
ss. 316 (a).............................................. Not Applicable
(a)(1)(A)........................................ Not Applicable
(a)(1)(B)........................................ Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. Not Applicable
(c).............................................. 607
ss. 317 (a)(1)........................................... Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. 509
ss. 318 (a).............................................. 1010
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 1, 1997,
among (i) Public Service Company of Oklahoma, an Oklahoma corporation (including
any successors or assigns, the "Depositor"), (ii) The Bank of New York, a New
York banking corporation duly organized and existing under the laws of the State
of New York, as property trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) The Bank of New York (Delaware), a Delaware banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee," and, in its separate corporate capacity and not
in its capacity as Delaware Trustee, the "Delaware Bank") (iv) Wendy G. Hargus,
an individual, and R. Russell Davis, an individual, each of whose address is c/o
Public Service Company of Oklahoma (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 (v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee, and Wendy G. Hargus, as Administrative Trustee (the "Prior
Administrative Trustee") have heretofore duly declared and established a
business trust pursuant to the Delaware Business Trust Act by the entering into
of that certain Trust Agreement, dated as of January 29, 1997 (the "Original
Trust Agreement"), and by the execution and filing by the Delaware Trustee, the
Property Trustee and the Prior Administrative Trustee with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on January 29,
1997, the form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property
Trustee and the Prior Administrative Trustee desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of an additional Administrative Trustee;
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 101. 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;
(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 608.
"ADDITIONAL AMOUNT" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of additional
interest accrued on interest in arrears and paid by the Depositor on a Like
Amount of Debentures for such period.
"ADDITIONAL SUMS" has the meaning specified in Section 5.05 of
the First Supplemental Indenture.
"ADMINISTRATIVE TRUSTEE" means each of Wendy G. Hargus and R.
Russell Davis, solely in his capacity as Administrative Trustee of the Trust
formed and continued hereunder and not in his 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 adjudging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of or in respect of such Person under the United States
Bankruptcy Code or any other similar applicable Federal or State law,
and the continuance of any such decree or order unvacated and unstayed
for a period of 90 days; or the commencement of an involuntary case
under the Federal Bankruptcy Code in respect of such Person, which shall
continue undismissed for a period of 90 days or entry of an order for
relief in such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and such
decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such
Person of a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or other similar
applicable Federal or State law, or the consent by such Person to the
filing of any such petition or to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or
trustee or assignee in bankruptcy or insolvency of such Person or of its
property, or shall make a general assignment for the benefit of
creditors.
"BANKRUPTCY LAWS" has the meaning specified in Section 1009.
"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 appropriate Trustee.
"BOOK ENTRY PREFERRED SECURITIES CERTIFICATES" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 511.
"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 Depositor 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.
"CERTIFICATE OF TRUST" means the certificate of trust filed with
the Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. 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 date of execution and delivery of this
Trust Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"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 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.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"CORPORATE TRUST OFFICE" means the principal corporate trust
office of the Property Trustee or Debenture Trustee, as the case may be, at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Amended and Restated
Trust Agreement is located at 101 Barclay Street, 21W, New York, New York 10286.
"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 TAX EVENT" means a "Tax Event" as defined in the
Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, a New York
banking corporation organized under the laws of the State of New York and any
successor thereto, as trustee under the Indenture.
"DEBENTURES" means the $77,320,000 aggregate principal amount of
the Depositor's 8% Junior Subordinated Deferrable Interest Debentures, Series A,
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 511(a)
and (b) Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.
"DELAWARE BANK" has the meaning specified in the preamble to
this Trust Agreement.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (ss.) 3801, ET SEQ., as it may be amended from time to
time.
"DELAWARE TRUSTEE" means the commercial bank or trust company
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.
"DEPOSITOR" has the meaning specified in the preamble to this
Trust Agreement.
"DISTRIBUTION DATE" has the meaning specified in Section 401(a).
"DISTRIBUTIONS" means amounts payable in respect of the Trust
Securities as provided in Section 401.
"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 of which or the breach of which is dealt with in clause (b)
or (c), above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 33% in
aggregate liquidation preference 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
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"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 901.
"EXTENSION PERIOD" has the meaning specified in Section 4.01 of
the First Supplemental Indenture.
"FIRST SUPPLEMENTAL INDENTURE" means the First Supplemental
Indenture dated as of May 1, 1997 between the Depositor and the Debenture
Trustee, as Trustee.
"GLOBAL DEBENTURE" has the meaning specified in the Indenture.
"GUARANTEE" means the Guarantee Agreement executed and delivered
by the Depositor and The Bank of New York, as trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"INDENTURE" means the Indenture, dated as of May 1, 1997, as
supplemented by the First Supplemental Indenture, between the Depositor and the
Debenture Trustee, as trustee, as amended or supplemented from time to time.
"INVESTMENT COMPANY EVENT" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
"investment company" that is required to be registered under the 1940 Act, which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.
"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 and 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 termination or liquidation 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 termination and
liquidation of the Trust pursuant to Section 904(a).
"LIQUIDATION DISTRIBUTION" has the meaning specified in Section
904(d).
"1940 ACT" means the Investment Company Act of 1940, as amended.
"OFFICER'S CERTIFICATE" means a certificate signed by the
President, a General Manager, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the appropriate Trustee. The officer signing an
Officer's Certificate given pursuant to Section 816 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the
Officer's Certificate;
(c) a statement that the 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 the 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, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
"ORIGINAL TRUST AGREEMENT" has the meaning specified in the
recitals to this Trust Agreement.
"OUTSTANDING", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, EXCEPT:
(a) Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Preferred 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 Preferred
Securities; PROVIDED that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(c) Preferred 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 504, 505, 511 and 513;
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 such Trustee 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
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 509 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
trust department 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 shall make payments to the Securityholders in accordance with Sections
401 and 402.
"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
that a Person is a Holder of Preferred Securities, substantially in the form
attached as Exhibit E.
"PROPERTY TRUSTEE" means the commercial bank or trust company
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 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
810.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the
respective meanings specified in Section 504.
"SECURITYHOLDER" or "HOLDER" means a Person in whose name a Trust
Security or Trust Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act. If such Person is the Clearing Agency or its nominee, this shall not
prevent the Owners from having an undivided beneficial interest in the assets of
the Trust.
"TAX EVENT" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under this Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges.
"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 all exhibits hereto, including,
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
amended, 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 Guarantee, (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 trusts 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, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement and the
Pricing Agreement, each dated as of April 24, 1997, among the Trust, the
Depositor and the Underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 201. NAME.
The Trust created and continued hereby shall be known as "PSO
Capital 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.
Section 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
c/o The Bank of New York (Delaware), 23 White Clay Center, Newark, Delaware
19711, Attention: Corporate Trust Administration, 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 c/o Public Service Company of Oklahoma, 212 East Sixth Street, Tulsa,
Oklahoma 74119-1212.
Section 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.
The Trustees acknowledge 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.
Section 204. ISSUANCE OF THE PREFERRED SECURITIES.
On April 24, 1997 the Depositor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver in accordance with the
Underwriting Agreement Preferred Securities Certificates, registered in the name
of the nominee of the initial Clearing Agency, in an aggregate amount of
3,000,000 Preferred Securities having an aggregate Liquidation Amount of
$75,000,000, against receipt of the aggregate purchase price of such Preferred
Securities of $75,000,000, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee.
Section 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
92,800 Common Securities having an aggregate Liquidation Amount of $2,320,000
against payment by the Depositor of such amount. 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 Property Trustee on
behalf of the Trust and having an aggregate principal amount equal to
$77,320,000, 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 $77,320,000.
Section 206. 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 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.
Section 207. 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 and Article VIII,
and in accordance with the following provisions (i) and (ii), the
Administrative Trustees shall have the authority to enter into all
transactions and agreements determined by the Administrative Trustees to
be appropriate in exercising the authority, express or implied,
otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including
without limitation, the following:
(i) As among the Trustees, each Administrative Trustee,
acting singly or jointly, shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) 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 or documents as may
be necessary or desirable in connection with the purposes
and function of the Trust;
(C) assisting 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;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges 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;
(E) the sending of 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;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) 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 Holders of the Preferred
Securities or to enable the Trust to effect the purposes
for which the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative 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 power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and
any other payments made in respect of the Debentures in
the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default, the taking of 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 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);
(J) registering transfers of the Trust
Securities in accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 207(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 fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes, (iv) incur any indebtedness
for borrowed money or issue any other debt or (v) take or consent
to any action that would result in the placement of a Lien on any
of the Trust Property. 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.
(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 in furtherance of the following prior to the date of
this Trust Agreement are hereby ratified and confirmed in all
respects):
(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, among other securities, the Preferred
Securities and the Debentures, 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, the Debentures
and the Guarantee and to do any and all such acts, other
than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take
on behalf of the Trust, and prepare for execution and
filing 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) 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 other organizations for listing upon notice
of issuance of any Preferred Securities or Debentures, if
applicable, and to file or cause an Administrative
Trustee to file thereafter with such exchange or
organization such notifications and documents as may be
necessary from time to time;
(iv) 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 or Debentures,
if applicable, under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the
execution and delivery of, 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, will be classified as a
"grantor trust" and not as an association taxable as a
corporation 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, subject to Section 1002, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such
purposes.
Section 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
Section 209. 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 for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 301. 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 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 401. DISTRIBUTIONS.
(a) 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 May 2, 1997,
and, except during any Extension Period with respect to the Debentures, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on June 30, 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) with the same force and effect as if made on such date (each date on
which distributions are payable in accordance with this Section 401(a) a
"Distribution Date").
(b) The Trust Securities represent undivided beneficial interests
in the Trust Property, and, as a practical matter, the Distributions on the
Trust Securities shall be payable at a rate of 8% per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any full
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 the number of days elapsed in a 360-day year of twelve 30-day months.
During any Extension Period with respect to the Debentures, Distributions on the
Preferred Securities will be deferred for a period equal to the Extension
Period. The amount of Distributions payable for any period shall include the
Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely 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
immediately available in the Payment Account for the payment of such
Distributions.
(d) 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 and, if the Preferred Securities
are in book-entry form and registered to the Clearing Agency or its nominee,
will be paid by the Clearing Agency or its nominee to the Owners thereof, on the
relevant record date, which shall be one Business Day prior to 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 date 15
days prior to the relevant Distribution Date.
Section 402. 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. The
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. 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 total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(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.
(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 immediately available 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 402(c), the Property Trustee will, so
long as the Preferred Securities are in book-entry-only form, deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and 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 402(c), will 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 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, and such
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 accrue, 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 on the relevant record date, which shall be one
Business Day prior to 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 date fifteen days prior to the relevant
Redemption Date.
(f) Subject to Section 403(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 on a PRO RATA basis 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 such method (including,
without limitation, by lot) 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 which has been or is to be redeemed.
Section 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Sums, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; 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 Sums, 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 Sums, 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 Sums,
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 a 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 shall have been cured, waived
or otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities shall have 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 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Sums, 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 between the
Property Trustee and the Common Securityholder.
Section 405. 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 required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee 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 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Sums, the
Property Trustee at the direction of an Administrative Trustee or Depositor
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.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 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 502. 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 Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual 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 504, 511
and 513.
Section 503. 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 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, General Manager, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
Section 504. 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 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as 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 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee 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
508, the Administrative Trustees or any one of them shall execute 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 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.
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 508.
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 the Property 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 the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.
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 505. 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 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 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent 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. Nothing in this provision shall be
construed to prevent the Owners from having an undivided beneficial interest in
the assets of the Trust.
Section 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall furnish
or cause to be furnished (a) to the Property Trustee, semi-annually on or before
January 15 and July 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 the most recent Record Date 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 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 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in The City of New
York, 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 principal corporate trust office of the Property Trustee, 101
Barclay Street, New York, NY 10286, as the principal corporate trust office for
such purposes. The Administrative Trustees shall give prompt written notice to
the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 509. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from
the Payment Account and if the Preferred Securities are held in book-entry form
and registered to the Clearing Agency or its nominee, the Clearing Agency or its
nominee will in turn make Distributions to the Owners thereof, and the Paying
Agent 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 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 Property Trustee, and any co-paying agent chosen by the
Property Trustee, 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 Property Trustee 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
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 801, 803 and 806 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than a
transfer in connection with a merger or consolidation of the Depositor into
another corporation or transfer of assets substantially as an entirety pursuant
to Section 10.01 of the Indenture) shall be void. The Administrative Trustees
shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 511. 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 or held on behalf of The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Book-Entry 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 beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 513. Unless and
until Definitive Preferred Securities Certificates have been issued to
beneficial owners pursuant to Section 513:
(i) the provisions of this Section 511(a) shall be in
full force and effect;
(ii) the Securities Registrar, the Paying Agent 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 Book-Entry
Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities and shall have no obligations to deal with the Owners
thereof;
(iii) to the extent that the provisions of this Section
511 conflict with any other provisions of this Trust Agreement,
the provisions of this Section 511 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 513, 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.
Any Clearing Agency designated pursuant hereto will not be deemed
an agent of the Trustees for any purpose.
(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 512. 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
513, 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 513. 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 Property Trustee in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of the Owners of Preferred Securities Certificates, then the Property
Trustee shall notify the Clearing Agency, 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 Property Trustee 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 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 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
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 514. 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
209, and the Securityholders and/or Owners shall not have any right or title
therein other than the rights 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. When issued and delivered to Holders of the Preferred Securities against
payment of the purchase price therefor, the Preferred Securities will be fully
paid and nonassessable interests in the Trust. 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.
(b) (i) 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 33% in principal amount of the outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 33% in Liquidation Amount
of the Preferred Securities then Outstanding shall have such right 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 and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.
(ii) The provisions of subsection (b)(i), however, are
subject to the condition that if, at any time after such 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 provided
in the Indenture, the Depositor shall pay or shall deposit with
the Debenture Trustee a sum sufficient to pay all amounts
required to be paid pursuant to Section 6.01(c) of the Indenture
with respect to a rescission and annulment of such a declaration
and any and all Events of Default with respect to the Debentures,
other than nonpayment of principal on Debentures which shall have
not have become due by their terms, shall have been remedied or
waived as provided in Section 6.06 of the Indenture, then the
Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Depositor and the Debenture
Trustee, may rescind and annul such declaration and its
consequences, but no such rescission and annulment shall extend
to or shall affect any subsequent default, or shall impair any
right consequent thereon.
(c) For so long as any Preferred Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails to proceed to
enforce any right available to the Holders of the Debentures for 60 days, the
Holders of at least 33% in Liquidation Amount of the Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of such rights.
(d) For so long as any Preferred Securities remain Outstanding,
to the fullest extent permitted by law, upon the occurrence of a Debenture Event
of Default specified in Section 6.01(a)(1) or 6.01(a)(2) of the Indenture, any
Holder of Preferred Securities shall have the right to institute a proceeding
directly against the Depositor for enforcement of payment to such Holder of the
principal of or interest on Debentures having a principal amount equal to the
Liquidation Amount of the Preferred Securities of such Holder after the due date
specified for such payment in the Debentures. Except as set forth in Section
514(b), (c) and (d), 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.
(e) The Depositor will be subrogated to the rights of the Holder
of the Preferred Securities to the extent of any payment made by the Depositor
to any such Holder of Preferred Securities pursuant to Section 514(c) or (d)
hereof.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 514, 810 and
1002 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,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Article Six 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 Outstanding 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 the Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the Outstanding Preferred Securities. The Property Trustee shall
notify each Holder of the Outstanding 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 the Trust will continue to be classified as a
"grantor trust" and not as an association taxable as a corporation for United
States federal income tax purposes on account of such action.
(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, winding-up or termination 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. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
cease to be classified as a "grantor trust" or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
Section 602. 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 1008 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 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
33% of the Preferred Securities (based upon their aggregate 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 the Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate 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 aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 604. 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 605. 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 taken. 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 606. 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 aggregate 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 (based upon their aggregate Liquidation
Amount).
Section 607. 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 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 608. 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
801) conclusive in favor of the Trustees, if made in the manner provided in this
Section.
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.
Whether a Person is a Holder of Preferred 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.
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 Guarantee
Trustee (as defined in the Guarantee), the Trust or any Person.
Section 609. 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.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each Successor Property Trustee at
the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
Successor Property Trustee in its separate corporate capacity) hereby represents
and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York;
(b) the Bank 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) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it 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;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Property Trustee and does not
require any approval of stockholders of the Bank and such execution, delivery
and performance will not (i) violate the Bank's charter or by-laws, (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 Bank 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 New York , as the case may be, governing the banking or trust
powers of the Bank or the Property Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein or therein 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 Bank
or the Property Trustee, as the case may be, under the laws of the United States
or the State of New York; and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the Bank or the
Property 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 to enter into or perform its obligations as
one of the Trustees under this Trust Agreement.
Section 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK
AND THE DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on
behalf of and as to itself, as of the date hereof, and each Successor Delaware
Trustee at the time of the Successor Delaware Trustee's acceptance of
appointment as Delaware Trustee hereunder (the term "Delaware Bank" being used
to refer to such Successor Delaware Trustee in its separate corporate capacity),
hereby represents and warrants (as applicable) for the benefit of the Depositor
and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(b) the Delaware Bank 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) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it 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;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Delaware Trustee and does not
require any approval of stockholders of the Delaware Bank and such execution,
delivery and performance will not (i) violate the Delaware Bank's charter or
by-laws, (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 Delaware Bank 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 Delaware Bank or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein 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
Delaware Bank or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the Delaware Bank
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 Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 703. 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 Administrative 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 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 Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 801. 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, no provision of this
Trust Agreement shall require the Trustees to expend or risk 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 their rights or powers, if 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.
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 Administrative 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 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 801(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) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) 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;
(ii) 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;
(iii) 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;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree 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 301 and except to the extent
otherwise required by law; and
(v) 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
negligence, default or misconduct of the Administrative Trustees
or the Depositor.
Section 802. CERTAIN NOTICES.
(a) Within 15 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, 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. For
purposes of this Section the term "Event of Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in Section 1008, notice
of the Depositor's election to begin or further extend an Extension Period on
the Debentures (unless such election shall have been revoked) within the time
specified for transmitting such notice to the holders of the Debentures pursuant
to the Indenture.
Section 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(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
or (ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with 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 Officer's 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 Officer's
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 filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its Affiliates) 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, such counsel
may be counsel to the Depositor or any of its Affiliates, and may include any of
its employees; 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;
(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 recklessness with respect to 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 of the Trust Securities
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; and
(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.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property 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 the Property 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 Property Trustee shall be
construed to be a duty.
Section 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
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 805. 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 808 and 813 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 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to such
Trustee's negligence, bad faith or willful misconduct (or, in the case
of the Administrative Trustees, any such expense, disbursement or
advance as may be attributable to his or her gross negligence, bad faith
or willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any loss, damage,
claims, liability, penalty or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance
or administration of this Trust 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.
No Trustee may claim any lien or charge on any Trust Property as
a result of any amount due pursuant to this Section 806.
Section 807. 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 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, 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
that shall act through one or more persons authorized to bind such entity.
Section 808. CONFLICTING INTERESTS.
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.
Section 809. 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 shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor shall for
such purpose join with the Property Trustee in the execution, delivery and
performance of all 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 and delivered 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 Trustees specified
hereunder, shall be exercised, solely by such Trustees 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
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section 809.
(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 810. 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 811.
Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of acceptance
by the successor Trustee required by Section 811 shall not have been delivered
to the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Depositor,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee with respect to the Trust Securities.
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 on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
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 Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. 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 is 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 with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. 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 an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, 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 with
respect to the Trust Securities.
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 1008 and shall give notice to
the Depositor. 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, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of 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 Administrative Trustees set forth in Section 807).
Section 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, 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 trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee 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 with respect to the Trust Securities and the
Trust; 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 such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may be.
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 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee
or any Administrative 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
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided 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 813. 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 814. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than November 1 of each year commencing with
November 1, 1997 the Property Trustee shall transmit to all Securityholders in
accordance with Section 1008, and to the Depositor, a brief report dated as of
such September 1 with respect to:
(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be eligible
under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report and any
action taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
securities exchange or other organization upon which the Trust Securities are
listed, with the Commission and with the Depositor.
Section 815. 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 Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 816. 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
Officer's Certificate.
Section 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, 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 817(a), or
if the number of Trustees is increased pursuant to Section 817(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul 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 810, 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 818. 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 207(a); 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 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 the Trust, as set forth herein.
Section 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent
or approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically
terminate on January 29, 2042 (the "Expiration Date") subject to distribution of
the Trust Property in accordance with Section 904.
Section 902. 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 Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to terminate the Trust and distribute the
Debentures to Securityholders in exchange for the Preferred Securities
in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
Section 903. 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 upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (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.
Section 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b),
or (d) of Section 902 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder or if the Preferred
Securities are held in book-entry form, to each Owner through the Clearing
Agency or its nominee, a Like Amount of Debentures, subject to Section 904(d).
Notice of liquidation shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not later 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 notices of liquidation 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 904(d) applies receive
a Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to
effect the liquidation 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 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) 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 reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other securities
exchange or other organization as the Preferred Securities are then listed or
traded, (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.
(d) In the event that, notwithstanding the other provisions of
this Section 904, 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, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders or if the
Preferred Securities are held in book-entry form, Owners through the Clearing
Agency or its nominee, 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 accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or termination, 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, winding-up or
termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
Section 905. 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 Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, 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 (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities) so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
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, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (b) 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 (viii) the Depositor 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 Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other than a
"grantor trust" for United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity 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 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 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to acceptance of
appointment by a successor Trustee, (ii) 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 this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement, or (iii) 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 be classified for United States federal
income tax purposes as 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; PROVIDED, HOWEVER, that in the case
of clause (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 601(c) or Section 1002(c)
hereof, any provision of this Trust Agreement may be amended by the
Administrative Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) upon 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" 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 603 or 606 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 603 or 606 hereof), this
paragraph (c) of this Section 1002 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 to fail or cease to be
classified as 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, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
(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 Officer's
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
Section 1003. 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 1004. 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 SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
Section 1005. 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 which is a Business Day (except
as otherwise provided in Sections 401(a) and 402(d)), with the same force and
effect as though made on the date fixed for such payment, and no distribution
shall accumulate thereon for the period after such date.
Section 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant 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 Ten 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 1007. HEADINGS.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
Section 1008. 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 Public Service
Company of Oklahoma, c/o Central and South West Corporation, 1616 Woodall
Rodgers Freeway, Dallas, Texas 75202, Attention: Director, Finance, facsimile
no: (214) 777-1223. Any notice to Preferred Securityholders shall also be given
to such owners as have, within two years preceding the giving of such notice,
filed their names and addresses with the Property Trustee for that purpose. 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.
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 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 The Bank of New York, 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust Trustee
Administration; (b) with respect to the Delaware Trustee, to 23 White Clay
Center, Newark, New Castle County, Delaware 19711, Attention: Corporate Trust
Trustee Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of PSO Capital I." 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 1009. 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 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), 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. The
provisions of this Section 1009 shall survive the termination of this Trust
Agreement.
Section 1010. 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 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 to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
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 to be 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 Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 1011. 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 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.
Section 1012. COUNTERPARTS.
This Trust Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all counterparts shall together constitute but one and the same instrument.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By: __________________________________
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK
as Property Trustee
By: __________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By: __________________________________
Name:
Title:
Wendy G. Hargus, as Administrative Trustee
R. Russell Davis, as Administrative Trustee
EXHIBIT A
CERTIFICATE OF TRUST
OF
PSO CAPITAL I
THIS CERTIFICATE OF TRUST of PSO Capital I (the "Trust"), dated
________ __, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is PSO Capital 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), 23 White Clay Center, Newark, New Castle County,
Delaware 19711.
3. Counterparts. This Certificate of Trust may be executed
in one or more counterparts, all of which together constitute one and the same
instrument.
4. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK,
as Trustee
By _____________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Trustee
BY
Name:
Title:
Wendy G. Hargus, not in her individual
capacity, but solely as Administrative
Trustee
EXHIBIT B
________, 1997
The Depository Trust Company, 55 Water Street, 49th Floor, New York, New York
10041-0099.
Attention:[ ]
General Counsel's Office
Re: PSO Capital I Trust Originated
PREFERRED SECURITIES, SERIES A
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
("DEPOSITORY TRUST COMPANY") of PSO Capital I [ ]% Trust Originated Preferred
Securities, Series A (the "Preferred Securities"), of PSO Capital I, a Delaware
business trust (the "Issuer"), created pursuant to a Trust Agreement between
Public Service Company of Oklahoma, an Oklahoma corporation ("PSO"), 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
Issuer or redemption of the Preferred Securities, to the extent the Issuer has
funds available for the payment thereof, are guaranteed by PSO to the extent set
forth in a Guarantee Agreement dated [ ], 1997 by PSO with respect to the
Preferred Securities. PSO and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated [ ], 1997 by and among the Underwriters, the Issuer
and PSO, and the Underwriters wish to take delivery of the Preferred Securities
through DEPOSITORY TRUST COMPANY. The Bank of New York acting as transfer agent
and registrar with respect to the Preferred Securities (the "Transfer Agent and
Registrar").
To induce DEPOSITORY TRUST COMPANY to accept the Preferred
Securities as eligible for deposit at DEPOSITORY TRUST COMPANY, and to act in
accordance with DEPOSITORY TRUST COMPANY's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DEPOSITORY TRUST
COMPANY 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 [ ], 1997, there
shall be deposited with DEPOSITORY TRUST COMPANY one or more global certificates
(individually and collectively, the "Global Certificate") registered in the name
of DEPOSITORY TRUST COMPANY's Preferred Securities nominee, Cede & Co.,
representing an aggregate of [ ] Preferred Securities and bearing the following
legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DEPOSITORY TRUST COMPANY"), 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 DEPOSITORY TRUST COMPANY (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DEPOSITORY TRUST COMPANY), 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.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders of the Preferred Securities under certain
limited circumstances. The Issuer shall establish a record date for such
purposes and shall, to the extent possible, give DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY
TRUST COMPANY 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 DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST
COMPANY's Dividend Department of such payment 5 business days prior to payment
date. The notices provided for in this paragraph shall be sent as described in
Section 9.
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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as
described in paragraph 4. Notices to DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST
COMPANY'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:
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 DEPOSITORY TRUST
COMPANY 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 "PSO Capital I [ ]% Trust Originated Preferred
Securities, Series A."
8. The Issuer or the Transfer Agent and Registrar shall provide
automated notification of CUSIP-level detail for Distribution payments to
DEPOSITORY TRUST COMPANY no later than noon (Eastern Time) on the payment date.
9. Distribution payments shall be received by Cede & Co. as
nominee of DEPOSITORY TRUST COMPANY, or its registered assigns, in same-day
funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment
date. Absent any other arrangements between the Issuer and DEPOSITORY TRUST
COMPANY, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
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
DEPOSITORY TRUST COMPANY. 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 DEPOSITORY TRUST COMPANY in advance of the Distribution
payment date as soon as the information is available. This information should be
conveyed directly to DEPOSITORY TRUST COMPANY electronically. If electronic
transmission is not available, such information should be sent by telecopy to
DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST COMPANY 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
10. DEPOSITORY TRUST COMPANY shall receive maturity and
redemption payments and CUSIP-level detail 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 DEPOSITORY TRUST COMPANY, such payments shall be wired
as follows:
The Chase Manhattan Bank
ABA 021000128
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
DEPOSITORY TRUST COMPANY's SDFS PAYING AGENT OPERATING PROCEDURES, a copy of
which has previously been furnished to the Transfer Agent and Registrar.
11. DEPOSITORY TRUST COMPANY shall receive all reorganization
payments and CUSIP-level detail resulting from corporation actions (such as
tender offers 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 DEPOSITORY TRUST COMPANY, such payments shall be wired as
follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DEPOSITORY TRUST COMPANY may by prior written notice direct
the Issuer and the Transfer Agent and Registrar to use any other telecopy number
or address of DEPOSITORY TRUST COMPANY as the number or address to which notices
or payments may be sent.
13. 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, DEPOSITORY TRUST COMPANY, 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.
14. DEPOSITORY TRUST COMPANY may discontinue its services as a
securities depositary with respect to the Preferred Securities at any time by
giving at least 90 days' prior written notice to the Issuer and the Transfer
Agent and Registrar (at which time DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY account, or issue definitive Preferred Securities
to the beneficial holders thereof, and in any such case, DEPOSITORY TRUST
COMPANY 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. 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
DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY and
others, and DEPOSITORY TRUST COMPANY 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.
16. The Issuer: (a) understands that DEPOSITORY TRUST COMPANY 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 DEPOSITORY
TRUST COMPANY'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
DEPOSITORY TRUST COMPANY.
17. 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 PSO Capital I.
Very truly yours,
PSO CAPITAL I
(As Issuer)
By
Name: [ ]
Title: Administrative Trustee
THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE
(As Transfer Agent and Registrar)
By:
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By
Authorized Officer
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
PSO Capital I
[ ]% Common Securities
(liquidation amount $25 per Common Security)
PSO Capital I, a statutory business trust created under the laws
of the State of Delaware (the "Trust") hereby certifies that Public Service
Company of Oklahoma (the "Holder") is the registered owner of
______________________________________ (_______________) common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
and designated the [ ]% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 510 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 [ ], 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.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this ________ day of ______, _____.
PSO CAPITAL I
By:
Name:
Administrative Trustee
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of [ ], 1997, between Public Service Company
of Oklahoma, an Oklahoma corporation ("PSO"), and PSO Capital I, a Delaware
business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to, and receive Debentures (as defined in the Trust
Agreement) from, PSO and to issue and sell [ ]% Trust Originated 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 [ ], 1997 as the same may be amended
from time to time (the "Trust Agreement");
WHEREAS, PSO will directly or indirectly own all of the Common
Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder
of the Preferred Securities, which purchase PSO hereby agrees shall benefit PSO
and which purchase PSO acknowledges will be made in reliance upon the execution
and delivery of this Agreement, PSO, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY PSO.
Subject to the terms and conditions hereof, PSO, including in its
capacity as 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 (as hereinafter defined) 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. 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.
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 the date hereof by PSO 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.
PSO hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and PSO 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 PSO 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, PSO with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against PSO and
PSO waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against PSO.
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 PSO 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):
PSO Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above
written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Name: [ ]
Title: Treasurer
PSO CAPITAL I
By:
Name: [ ]
Title: Administrative Trustee
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 (as defined below) 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
PSO Capital 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-
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
PSO Capital I
[ ]% Trust Originated Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
PSO Capital 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 PSO Capital I [ ]% Trust Originated Preferred Securities,
Series A (liquidation preference $25 per Preferred Security) (the "Preferred
Securities"). 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
504 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 [ ], 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 Public Service Company of Oklahoma, an
Oklahoma corporation, and The Bank of New York, as guarantee trustee, dated as
of [ ], 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 ___________, _____.
PSO CAPITAL I
By:
Name:
Title: Administrative Trustee
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 Securities 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
Securities Certificate)
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCK BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
SEC RULE 17Ad-15.
GUARANTEE AGREEMENT
BETWEEN
PUBLIC SERVICE COMPANY OF OKLAHOMA
(AS GUARANTOR)
AND
THE BANK OF NEW YORK
(AS GUARANTEE TRUSTEE)
DATED AS OF
MAY 1, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 101. Definitions.............................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application........................5
SECTION 202. List of Holders.........................................5
SECTION 203. Reports by the Guarantee Trustee........................5
SECTION 204. Periodic Reports to Guarantee Trustee...................5
SECTION 205. Evidence of Compliance with Conditions Precedent........6
SECTION 206. Events of Default; Waiver...............................6
SECTION 207. Event of Default; Notice................................6
SECTION 208. Conflicting Interests...................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee..............7
SECTION 302. Certain Rights of Guarantee Trustee.....................8
SECTION 303. Indemnity..............................................10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility.........................10
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee......................................11
ARTICLE V
GUARANTEE
SECTION 501. Guarantee..............................................11
SECTION 502. Waiver of Notice and Demand............................12
SECTION 503. Obligations Not Affected...............................12
SECTION 504. Rights of Holders......................................13
SECTION 505. Guarantee of Payment...................................13
SECTION 506. Subrogation............................................13
SECTION 507. Independent Obligations................................13
PAGE
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination..........................................14
SECTION 602. Pari Passu Guarantees..................................14
ARTICLE VII
TERMINATION
SECTION 701. Termination............................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns.................................14
SECTION 802. Amendments.............................................15
SECTION 803. Notices................................................15
SECTION 804. Benefit................................................16
SECTION 805. Interpretation.........................................16
SECTION 806. Governing Law..........................................17
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
OF 1939, AS AMENDED AGREEMENT
310(a)......................................................... 401(a)
310(b)......................................................... 401(c), 208
310(c)......................................................... Inapplicable
311(a)......................................................... 202(b)
311(b)......................................................... 202(b)
311(c)......................................................... Inapplicable
312(a)......................................................... 202(a)
312(b)......................................................... 202(b)
313............................................................ 203
314(a)......................................................... 204
314(b)......................................................... Inapplicable
314(c)......................................................... 205
314(d)......................................................... Inapplicable
314(e)......................................................... 101, 205, 302
314(f)......................................................... 201, 302
315(a)......................................................... 301(d)
315(b)......................................................... 207
315(c)......................................................... 301
315(d)......................................................... 301(d)
316(a)......................................................... 101, 206, 504
316(b)......................................................... 503
316(c)......................................................... 802
317(a)......................................................... Inapplicable
317(b)......................................................... Inapplicable
318(a)......................................................... 201(b)
318(b)......................................................... 201
318(c)......................................................... 201(b)
- --------------
* 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.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of May 1, 1997, is executed
and delivered by Public Service Company of Oklahoma, an Oklahoma corporation
(the "Guarantor"), and The Bank of New York, a New York banking corporation
organized under the laws of the State of New York, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of PSO Capital I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of May 1, 1997 among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing 3,000,000 of its 8% Trust Originated Preferred Securities, Series A
(liquidation preference $25 per preferred security) (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred 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 Preferred 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 Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 101. 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 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, PROVIDED, HOWEVER, that an Affiliate
of the Guarantor shall not be deemed to include the Issuer. 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.
"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
for 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its
payment 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 Preferred 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 Preferred 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 the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
the date of redemption, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accumulated and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, 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 Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in
determining whether the holders of the requisite percentage of Preferred
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.
"Indenture" means the Indenture dated as of May 1, 1997 relating
to Junior Subordinated Debentures of the Guarantor, as supplemented and amended
between the Guarantor and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 202(a).
"Majority in liquidation preference of the Preferred 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 preference of
all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, President, General Manager, the Treasurer,
an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the
Officer's Certificate;
(c) a statement that 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 such 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 Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers 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.
"Senior Indebtedness" means the principal of, and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Guarantee or thereafter
incurred, created or assumed: (a) all indebtedness of the Guarantor evidenced by
notes, debentures, bonds or other securities sold by the Guarantor for money,
(b) all indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Guarantor or in effect
guaranteed by the Guarantor through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Guarantor, in
accordance with generally accepted accounting principles as in effect from time
to time, unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with this Guarantee. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article VI of this
Guarantee irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 401.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. 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 202. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15 and
July 15 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (b) 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
Holders as of a date not more than 15 days prior to the time such
list is furnished, in each case to the extent such information is
in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not
otherwise been received by the Guarantee Trustee in its capacity
as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(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 203. REPORTS BY THE GUARANTEE TRUSTEE.
Not later than November 1 of each year, commencing November 1,
1997, 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 204. PERIODIC REPORTS TO 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 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.
SECTION 205. 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
Officer's Certificate.
SECTION 206. EVENTS OF DEFAULT: WAIVER.
The Holders of a Majority in liquidation preference of the
Preferred 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 thereon.
SECTION 207. EVENT 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 known
to 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 the Board of Directors, the executive committee
or a trust committee of directors and/or 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 the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
SECTION 208. 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.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. 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 504(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
206), 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 failure to act
or 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 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 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
preference of the Preferred 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 302. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 301:
(i) The Guarantee Trustee may 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 Officer's
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 upon
an Officer's 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 choice, and the written 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 302(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 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 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 303. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and
to hold it harmless against, any loss, liability or expense 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.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. 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
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 401(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 402(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 Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 402. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
(a) Subject to Section 402(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(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 402 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.
ARTICLE V
GUARANTEE
SECTION 501. 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 set-off 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 502. 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, 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 503. 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 Preferred 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 so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred 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 Preferred
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, 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 Preferred
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 503 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 504. 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 a Majority in
liquidation preference of the Preferred 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 Guarantee Trustee, the Issuer
or any other Person.
SECTION 505. 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 distribution of Debentures to Holders as provided in
the Trust Agreement.
SECTION 506. 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 501; 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 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 507. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
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 503 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor.
SECTION 602. PARI PASSU GUARANTEES.
This Guarantee Agreement shall rank pari passu with any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by PSO Capital I.
ARTICLE VII
TERMINATION
SECTION 701. TERMINATION.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred 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 Preferred Securities or
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 801. 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 Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 802. 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 only be amended with
the prior approval of the Holders of not less than a Majority in liquidation
preference of the Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
SECTION 803. 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 as the Guarantor may give notice of to the Holders:
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
(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:
PSO Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
with a copy to:
The Bank of New York
101 Barclay Street
21 West
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(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 804. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders
and is not separately transferable from the Preferred Securities.
SECTION 805. 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 101;
(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 genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 806. 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 CONFLICT OF LAW PRINCIPLES THEREOF.
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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK, as Guarantee Trustee
By:
Name:
Title:
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of May 1, 1997, between Public Service Company of
Oklahoma, an Oklahoma corporation ("PSO"), and PSO Capital I, a Delaware
business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to, and receive Debentures (as defined in the Trust Agreement)
from, PSO and to issue and sell 8% Trust Originated 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 May 1, 1997 as the same may be amended from time to time
(the "Trust Agreement");
WHEREAS, PSO will directly or indirectly own all of
the Common Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase PSO hereby agrees shall benefit PSO and
which purchase PSO acknowledges will be made in reliance upon the execution and
delivery of this Agreement, PSO, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY PSO.
Subject to the terms and conditions hereof, PSO, including in its
capacity as 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 (as hereinafter defined) 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. 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.
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 the date hereof by PSO 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.
PSO hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and PSO 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 PSO 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, PSO with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against PSO and PSO
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against PSO.
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 PSO 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):
PSO Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
BY:
Name: Wendy G. Hargus
Title: Treasurer
PSO CAPITAL I
BY:
Name: Wendy G. Hargus
Title: Administrative Trustee
SOUTHWESTERN ELECTRIC POWER COMPANY
AND
THE BANK OF NEW YORK,
AS TRUSTEE
INDENTURE
DATED AS OF MAY 1, 1997
JUNIOR SUBORDINATED DEBENTURES
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
OF 1939, AS AMENDED INDENTURE
310(a) 7.09
310(b) 7.08
7.10
310(c) Inapplicable
311(a) 7.13
311(c) Inapplicable
312(a) 5.01
5.02(a)
312(b) 5.02(c)
5.02(d)
312(c) 5.02(e)
313(a) 5.04(a)
313(b) 5.04(b)
313(c) 5.04(a)
5.04(b)
313(d) 5.04(c)
314(a) 5.03
314(b) Inapplicable
314(c) 13.06
314(d) Inapplicable
314(e) 13.06
314(f) Inapplicable
315(a) 7.01(a)
7.02
315(b) 6.07
315(c) 7.01
315(d) 7.01(b)
7.01(c)
315(e) 6.08
316(a) 6.06
8.04
316(b) 6.04
316(c) 8.01
317(a) 6.02
317(b) 4.03
318(a) 13.08
TABLE OF CONTENTS*
PAGE
RECITALS................................................. 1
ARTICLE ONE
Definitions....................... 2
SECTION 1.01............................................. 2
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures......... 6
SECTION 2.01............................................. 6
SECTION 2.02............................................. 8
SECTION 2.03............................................. 8
SECTION 2.04............................................. 11
SECTION 2.05............................................. 12
SECTION 2.06............................................. 13
SECTION 2.07............................................. 14
SECTION 2.08............................................. 15
SECTION 2.09............................................. 15
SECTION 2.10............................................. 15
SECTION 2.11............................................. 16
SECTION 2.12. .......................................... 19
SECTION 2.13............................................. 19
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions... 20
SECTION 3.01............................................. 20
SECTION 3.02............................................. 20
SECTION 3.03............................................. 21
SECTION 3.04............................................. 22
SECTION 3.05............................................. 22
SECTION 3.06............................................. 22
- -----------
* This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms
or provisions.
ARTICLE FOUR
Particular Covenants of the Company........... 23
SECTION 4.01............................................. 23
SECTION 4.02............................................. 23
SECTION 4.03............................................. 23
SECTION 4.04............................................. 25
SECTION 4.05............................................. 25
SECTION 4.06............................................. 25
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee..................... 26
SECTION 5.01............................................. 26
SECTION 5.02............................................. 26
SECTION 5.03............................................. 28
SECTION 5.04............................................. 29
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default................... 30
SECTION 6.01............................................. 30
SECTION 6.02............................................. 33
SECTION 6.03............................................. 35
SECTION 6.04............................................. 35
SECTION 6.05............................................. 36
SECTION 6.06............................................. 36
SECTION 6.07............................................. 37
SECTION 6.08............................................. 38
ARTICLE SEVEN
Concerning the Trustee.................. 38
SECTION 7.01............................................. 38
SECTION 7.02............................................. 40
SECTION 7.03............................................. 42
SECTION 7.04............................................. 42
SECTION 7.05............................................. 42
SECTION 7.06............................................. 43
SECTION 7.07............................................. 43
SECTION 7.08............................................. 44
SECTION 7.09............................................. 44
SECTION 7.10............................................. 44
SECTION 7.11............................................. 46
SECTION 7.12............................................. 47
SECTION 7.13............................................. 48
ARTICLE EIGHT
Concerning the Debentureholders............. 48
SECTION 8.01............................................. 48
SECTION 8.02............................................. 49
SECTION 8.03............................................. 49
SECTION 8.04............................................. 49
SECTION 8.05............................................. 50
ARTICLE NINE
Supplemental Indentures................. 50
SECTION 9.01............................................. 50
SECTION 9.02............................................. 52
SECTION 9.03............................................. 53
SECTION 9.04............................................. 53
SECTION 9.05............................................. 53
ARTICLE TEN
Consolidation, Merger and Sale.............. 53
SECTION 10.01............................................ 53
SECTION 10.02............................................ 54
SECTION 10.03............................................ 55
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys..................... 55
SECTION 11.01............................................ 55
SECTION 11.02............................................ 56
SECTION 11.03............................................ 57
SECTION 11.04............................................ 58
SECTION 11.05............................................ 58
SECTION 11.06............................................ 58
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors...................... 58
SECTION 12.01............................................ 58
ARTICLE THIRTEEN
Miscellaneous Provisions................. 59
SECTION 13.01............................................ 59
SECTION 13.02............................................ 59
SECTION 13.03............................................ 59
SECTION 13.04............................................ 60
SECTION 13.05............................................ 60
SECTION 13.06............................................ 60
SECTION 13.07............................................ 61
SECTION 13.08............................................ 61
SECTION 13.09............................................ 61
SECTION 13.10............................................ 61
SECTION 13.11............................................ 61
SECTION 13.12............................................ 61
ARTICLE FOURTEEN
Subordination of Debentures............... 62
SECTION 14.01............................................ 62
SECTION 14.02............................................ 62
SECTION 14.03............................................ 63
SECTION 14.04............................................ 64
SECTION 14.05............................................ 65
SECTION 14.06............................................ 65
SECTION 14.07............................................ 66
SECTION 14.08............................................ 67
THIS INDENTURE, dated as of the first day of May, 1997, between
SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter sometimes referred to as
the "Company"), and THE BANK OF NEW YORK, a New York banking corporation
organized and existing under the laws of the State of New York, as trustee
(hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of debentures (hereinafter referred to as the "Debentures"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be
borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture; and
WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered by
the Trustee as in this Indenture provided, the valid, binding and legal
obligations of the Company, and to constitute these presents a valid indenture
and agreement according to its terms, have been done and performed or will be
done and performed prior to the issuance of the Debentures, and the execution of
this Indenture and the issuance hereunder of the Debentures have been or will be
prior to issuance in all respects duly authorized, and the Company, in the
exercise of the legal right and power in it vested, executes this Indenture and
proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar ($1.00) to it duly paid by
the Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee, for the equal
and proportionate benefit (subject to the provisions of this Indenture) of the
respective holders from time to time of the Debentures, without any
discrimination, preference or priority of any one Debenture over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
Section 1.01. The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture, any resolution of the Board of Directors of
the Company and of any indenture supplemental hereto shall have the respective
meanings specified in this Section. All other terms used in this Indenture which
are defined in the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") or which are by reference in the Trust Indenture Act defined in the
Securities Act of 1933, as amended (the "Securities Act"), (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this instrument.
"Authenticating Agent" shall mean an authenticating agent with respect
to all or any of the series of Debentures, as the case may be, appointed with
respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
"Board of Directors" shall mean the Board of Directors of the Company,
or any committee of such Board duly authorized to act on behalf thereof
hereunder.
"Board Resolution" shall mean 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 and to be in full force and effect on the date of such
certification.
"Business Day" shall mean, with respect to any series of Debentures,
any day other than (i) a Saturday or Sunday or (ii) a day on which banking
institutions in the Borough of Manhattan, the City and State of New York or any
city in which the Trustee's Corporate Trust Office is located, are authorized or
required to close.
"Certificate" shall mean a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company. The Certificate need not comply with the provisions of Section
13.05.
"Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at 101
Barclay Street, New York, NY 10286, Attention: Corporate Trust
Trustee Administration.
"Company" shall mean Southwestern Electric Power Company, a
corporation duly organized and existing under the laws of the State of Delaware,
and, subject to the provisions of Article Ten, also includes its successors and
assigns.
"Debenture" or "Debentures" shall mean any Debenture or Debentures, as
the case may be, authenticated and delivered under this Indenture.
"Debentureholder," "holder of Debentures," "registered holder" or
other similar term shall mean the person or persons in whose name or names a
particular Debenture shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debentures of any series for
which the Company shall determine that such Debentures will be issued as a
Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" shall mean, with respect to Debentures of a
particular series, any event specified in Section 6.01, continued for the period
of time, if any, therein designated.
"Fixed Maturity" shall mean when used with respect to any Debenture or
any installment of principal thereof, the date specified pursuant to the terms
of such Debenture as the fixed date on which principal of such Debenture or such
installment of principal is due and payable, as such date may be shortened as
provided pursuant to the terms of such Debenture and this Indenture.
"Global Debenture" shall mean, with respect to any series of
Debentures, a Debenture executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Governmental Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the specific payment of principal of or interest on the Governmental
Obligation evidenced by such depository receipt.
"Indenture" shall mean this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date," when used with respect to any installment of
interest on a Debenture of a particular series, shall mean the date specified in
such Debenture, a Board Resolution or an indenture supplemental hereto with
respect to that series as the fixed date on which an installment of interest
with respect to Debentures of that series is due and payable.
"Officer's Certificate" shall mean a certificate signed by the
President, General Manager, Treasurer or an Assistant Treasurer, Controller or
an Assistant Controller or the Secretary or an Assistant Secretary of the
Company. Each such certificate shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who may be counsel for the Company, reasonably acceptable to the
Trustee. Each such opinion shall include the statements provided for in Section
13.05, if and to the extent required by the provisions thereof.
"outstanding", when used with reference to Debentures of any series,
shall mean, subject to the provisions of Section 8.04, as of any particular
time, all Debentures of that series theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Debentures theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying agent
for cancellation or which have previously been canceled; (b) Debentures or
portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Debentures or portions of
such Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; (c)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.07; and (d)
Debentures paid pursuant to Section 2.07.
"Predecessor Debenture" of any particular Debenture shall mean every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by that particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Responsible Officer," when used with respect to the Trustee, shall
mean the chairman of the board of directors, president, any vice president,
secretary, treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Senior Indebtedness" of the Company shall mean the principal of, and
premium, if any, and interest on and any other payment due pursuant to any of
the following, whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed: (a) all indebtedness of the Company
evidenced by notes, debentures, bonds or other securities sold by the Company
for money, (b) all indebtedness of others of the kinds described in the
preceding clause (a) assumed by or guaranteed in any manner by the Company or in
effect guaranteed by the Company through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Company, in accordance
with generally accepted accounting principles as in effect from time to time,
unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with the Debentures. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article Fourteen of this
Indenture irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Trustee" shall mean The Bank of New York and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and
if at any time there is more than one person acting in such capacity hereunder,
"Trustee" means each such person. The term "Trustee" as used with respect to a
particular series of the Debentures means the trustee with respect to that
series.
"Trust Indenture Act," subject to the provisions of Sections 9.01,
9.02 and 10.01, shall mean the Trust Indenture Act of 1939, as amended and in
effect at the date of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
Section 2.01. The aggregate principal amount of Debentures which may
be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution delivered to the Trustee,
and set forth in an Officer's Certificate delivered to the Trustee, or
established in one or more indentures supplemental hereto:
(1) the title of the Debentures of the series (which
shall distinguish the Debentures of that series from all
other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures of
that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, in exchange for or in lieu of other Debentures of that
series);
(3) the date or dates on which the principal of the Debentures of that
series is payable or the method of determination thereof (including any
provision for shortening thereof);
(4) the rate or rates at which the Debentures of that series shall
bear interest, if any, or the manner of calculation of such rate or rates;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record dates for
the determination of holders to whom interest is payable on any such
Interest Payment Dates;
(6) the right of the Company, if any, to extend or
defer the interest payment periods and the duration of such
extension or deferral;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Debentures of that series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debentures of that series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which and the terms
and conditions upon which, Debentures of that series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) the form of the Debentures of that series,
including the form of the Certificate of Authentication for
that series;
(10) if denominations of other than $25 or any integral multiple
thereof, the denominations in which Debentures of that series shall be
issuable;
(11) whether the Debentures are issuable as a Global
Debenture and, in such case, the identity of the Depositary
for that series; and
(12) any and all other terms with respect to that series (which terms
shall not be inconsistent with the terms of this Indenture).
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of that 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 prior to the delivery of the Officer's
Certificate setting forth the terms of that series.
Section 2.02. The Debentures of any series and the Certificate of
Authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officer's Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
Section 2.03. The Debentures shall be issuable as registered
Debentures and in denominations of $25 or any integral multiple thereof, subject
to Section 2.01(10). The Debentures of a particular series shall bear interest
payable on the dates and at the rate or rates specified with respect to that
series. The principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America which
at the time is legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, the City
and State of New York (which, unless changed, shall be a Corporate Trust Office
or agency of the Trustee). At the Company's option, payments on the Debentures
of any series may also be made (i) by checks mailed by the Trustee to the
holders entitled thereto at their registered addresses or (ii) to a holder of
$1,000,000 or more in aggregate principal amount of the Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account; provided that, in either case, the
payment of principal with respect to any Debenture will be made only upon
surrender of that Debenture to the Trustee. Each Debenture shall be dated the
date of its authentication. Interest on the Debentures shall be computed on the
basis of a 360-day year composed of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on that Debenture will be paid upon presentation and surrender of that
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same 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 shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) 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 such Debenture 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 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 not be more than 15 nor 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 Debentureholder at his or her address
as it appears in the Debenture Register (as hereinafter defined), not less
than 10 days prior to 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 such Debentures (or their respective Predecessor
Debentures) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for that series shall mean either the 15th day of the
month immediately preceding the month in which an Interest Payment Date
established for that series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the 15th day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debenture.
Section 2.04. The Debentures shall, subject to the provisions of
Section 2.06, be printed on steel engraved borders or fully or partially
engraved, or legibly typed, as the proper officers of the Company may determine,
and shall be signed on behalf of the Company by its President or General
Manager, under its corporate seal attested by its Secretary or one of its
Assistant Secretaries. The signature of the President or General Manager and/or
the signature of the Secretary or an Assistant Secretary in attestation of the
corporate seal, upon the Debentures, may be in the form of a facsimile signature
of a present or any future President or General Manager and of a present or any
future Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Debentures and for that purpose the Company may use the
facsimile signature of any person who shall have been a President or General
Manager, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of that person shall have ceased to be
the President or General Manager, or the Secretary or an Assistant Secretary, of
the Company, as the case may be. The seal of the Company may be in the form of a
facsimile of the seal of the Company and may be impressed, affixed, imprinted or
otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and made available for delivery hereunder and that the
holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or General Manager and its Treasurer or any Assistant Treasurer, and
the Trustee in accordance with such written order shall authenticate and make
available for delivery such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, (i) an Opinion of Counsel and (ii) an Officer's
Certificate, each stating that the form and terms thereof have been established
in conformity with the provisions of this Indenture. Each Opinion of Counsel and
Officer's Certificate delivered pursuant to this Section 2.04 shall include all
statements prescribed by Section 13.05(b) hereof.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will, in the good faith
judgment of the Trustee, affect the Trustee's own rights, duties or immunities
under the Debentures and this Indenture or otherwise in a manner that is not
reasonably acceptable to the Trustee.
Section 2.05. (a) Debentures of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for such
purpose in the Borough of Manhattan, the City and State of New York, for other
Debentures of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section. In
respect of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall make
available for delivery in exchange therefor the Debenture or Debentures of the
same series which the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company, a register
or registers (herein referred to as the "Debenture Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or agency
of the Company designated for such purpose in the Borough of Manhattan, the City
and State of New York, the Company shall execute, the Trustee shall authenticate
and such office or agency shall make available for delivery in the name of the
transferee or transferees a new Debenture or Debentures of the same series as
the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required
by the Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company and the Debenture
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) Except as provided in the first paragraph of Section 2.07, no
service charge shall be made for any exchange or registration of transfer of
Debentures, or issue of new Debentures in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
involving any transfer.
(d) The Company shall neither be required (i) to issue, exchange or
register the transfer of any Debentures of any series during a period beginning
at the opening of business 15 days before the day of selection for redemption of
Debentures of that series and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all holders of Debentures of that series to be redeemed, nor (ii) to register
the transfer of or exchange any Debentures of any series or portions thereof
called for redemption, except the unredeemed portion of any Debentures being
redeemed in part. The provisions of this Section 2.05 are, with respect to any
Global Debenture, subject to Section 2.11 hereof.
Section 2.06. Pending the preparation of definitive Debentures of any
series, the Company may execute, and the Trustee shall authenticate and make
available for delivery, temporary Debentures (printed, lithographed or
typewritten) of any authorized denomination, and substantially in the form of
the definitive Debentures in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every temporary Debenture
of any series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures of that series in accordance with the
terms of Section 2.04 hereof. Without unnecessary delay the Company will execute
and will furnish definitive Debentures of such series and thereupon any or all
temporary Debentures of that series may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the Company
designated for the purpose in the Borough of Manhattan, the City and State of
New York, and the Trustee shall authenticate and such office or agency shall
make available for delivery in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures of that series, unless the
Company advises the Trustee to the effect that definitive Debentures need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Debentures of that series shall be entitled to the same
benefits under this Indenture as definitive Debentures of that series
authenticated and made available for delivery hereunder.
Section 2.07. In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company (subject to the
next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a new
Debenture of the same series bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debenture and
of the ownership thereof. The Trustee may authenticate any such substituted
Debenture and make available for delivery the same upon the written order of the
Company. Upon the issuance of any substituted Debenture, 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 the
fees and expenses of the Trustee) connected therewith. In case any Debenture
which has matured or is about to mature or has been called for redemption shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Company and to the Trustee such
security or indemnity as they may require to save them harmless and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debenture and of the ownership
thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.08. All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be canceled by it, and no Debentures shall
be issued in lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company, the Trustee shall
deliver to the Company canceled Debentures held by the Trustee. In the absence
of such request the Trustee may dispose of canceled Debentures in accordance
with its standard procedures. If the Company shall otherwise acquire any of the
Debentures, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and until
the same are delivered to the Trustee for cancellation.
Section 2.09. Nothing in this Indenture or in the Debentures, express
or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Debentures,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures.
Section 2.10. So long as any of the Debentures of any series remain
outstanding there may be an Authenticating Agent for any or all such series of
Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or partial
redemption thereof, and Debentures 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. All references in this Indenture to
the authentication of Debentures of any series by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently reported
or determined by it, of $50 million, and which is otherwise authorized under
such laws to conduct a trust business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
Section 2.11. (a) If the Company shall establish pursuant to Section
2.01 that the Debentures of a particular series are to be issued as a Global
Debenture, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and make available for delivery, a Global
Debenture which (i) shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Debentures of that
series, (ii) shall be registered in the name of the Depositary or its nominee,
(iii) shall be made available for delivery by the Trustee to the Depositary or
pursuant to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Except as otherwise provided in Section
2.11 of the Indenture, this Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05 and except as set
forth in Section 2.11(c) or (d), the Global Debenture of a series may be
transferred, in whole but not in part and in the manner provided in Section
2.05, only to another nominee of the Depositary for that series, a successor
Depositary for that series selected or approved by the Company or a nominee of
that successor Depositary.
(c) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture,
an interest in any Global Debenture shall be
exchangeable at the option of the beneficial
owner of such interest in such Global Debenture
for a definitive Debenture or Debentures
registered in the name of any holder other than
the Depositary or its nominee at any time
following issuance of such Global Debenture.
(ii) A beneficial owner of an interest in any Global Debenture
desiring to exchange such beneficial interest for a definitive
Debenture or Debentures shall instruct the Depositary, through
the Depositary's direct or indirect participants or otherwise, to
request such exchange on such beneficial owner's behalf and to
provide a written order containing registration instructions to
the Trustee. Upon receipt by the Trustee of electronic or written
instructions from the Depositary on behalf of such beneficial
owner, the Trustee shall cause, in accordance with the standing
instructions and procedures existing between the Trustee and the
Depositary, the aggregate principal amount of such Global
Debenture to be reduced by the principal amount of such
beneficial interest so exchanged and shall appropriately reflect
such reduction of the aggregate principal amount of this Global
Debenture as described in paragraph (iii) of this Section
2.11(c). Following such reduction, the Trustee shall authenticate
and make available for delivery to such beneficial owner of the
transferee, as the case may be, a definitive Debenture or
Debentures previously executed by the Company as described in
Section 2.05(a) and registered in such names and authorized
denominations as the Depositary, pursuant to such instructions of
the beneficial owner, shall instruct the Trustee.
(iii) Upon any exchange of a portion of any Global Debenture for
a definitive Debenture or Debentures, the Debenture Registrar
shall reflect the reduction of the principal amount of such
Global Debenture by the principal amount of such beneficial
interest so exchanged on the Debenture Register. Until exchanged
in full for definitive Debentures, such Global Debenture shall in
all respects be entitled to the same benefits under the Indenture
as the definitive Debentures authenticated and delivered
hereunder.
(d) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture,
if and so long as the Debentures of any series
are issued as a Global Debenture, any definitive
Debenture or Debentures of such series shall be
exchangeable at the option of the registered
holder thereof for a beneficial interest in such
Global Debenture at any time following the
exchange of such Global Debenture for such
definitive Debenture or Debentures pursuant to
Section 2.11(c).
(ii) A registered holder of a definitive Debenture or Debentures
desiring to exchange such definitive Debenture or Debentures for
a beneficial interest in such Global Debenture shall instruct the
Depositary, through the Depositary's direct or indirect
participants or otherwise, to request such exchange on such
registered holder's behalf and to provide a written order
containing registration instructions to the Trustee. Upon receipt
by the Trustee of electronic or written instructions from the
Depositary, and upon presentation to the Trustee of such
definitive Debenture or Debentures, the Trustee shall cause, in
accordance with the standing instructions and procedures existing
between the Trustee and the Depositary, the aggregate principal
amount of such Global Debenture to be increased by the principal
amount of such definitive Debenture or Debentures so exchanged
and shall appropriately reflect such increase of the aggregate
principal amount of the Global Debenture as described in
paragraph (iii) of this Section 2.11(d).
(iii) Upon any exchange of a definitive Debenture or Debentures
for a beneficial interest in such Global Debenture, the Debenture
Registrar shall reflect the increase of the principal amount of
such Global Debenture by the principal amount of such definitive
Debenture or Debentures so exchanged on the Debenture Register.
(e) If at any time the Depositary for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depositary for that
series or if at any time the Depositary for that series shall no longer be
registered or in good standing under the Exchange Act or other applicable
statute or regulation and a successor Depositary for that series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer apply to the Debentures of that series and the Company will execute
and, subject to Section 2.05, the Trustee will authenticate and make available
for delivery Debentures of that series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture of that series in exchange for
such Global Debenture. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by a Global
Debenture and that the provisions of this Section 2.11 shall no longer apply to
the Debentures of that series. In that event the Company will execute and,
subject to Section 2.05, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery Debentures of that series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture of such series in
exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture pursuant to this Section 2.11(e) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Debenture Registrar. The Trustee shall make available for delivery such
Debentures to the Depositary for delivery to the persons in whose names such
Debentures are so registered.
Section 2.12. If specified as contemplated by Section 2.01 with
respect to the Debentures of a particular series, the Company shall have the
right to shorten the maturity of the principal of the Debentures of such series
at any time to any date, PROVIDED that, if the Company elects to exercise its
right to shorten the maturity of the principal of the Debentures of such series,
at the time such election is made and at the time of such shortening, such
conditions as may be specified in such Debentures shall have been satisfied.
Section 2.13. The Company in issuing the Debentures 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 Debentures or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
Section 3.01. The Company may redeem the Debentures of any series
issued hereunder on and after the dates and in accordance with the terms
established for that series pursuant to Section 2.01 hereof.
Section 3.02. (a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Debentures of any
series in accordance with the right reserved so to do, it shall give notice of
such redemption to holders of the Debentures of the series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity of
the proceedings for the redemption of any other Debentures of that series or any
other series. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officer's Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the CUSIP number, if any,
of Debentures being redeemed, the date fixed for redemption and the redemption
price at which Debentures of that series are to be redeemed, and shall state
that payment of the redemption price of the Debentures to be redeemed will be
made at the office or agency of the Company in the Borough of Manhattan, the
City and State of New York, upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption will be paid as specified
in that notice, that from and after that date interest will cease to accrue, and
that the redemption is for a sinking fund, if such is the case. If less than all
the Debentures of a series are to be redeemed, the notice to the holders of
Debentures of that series to be redeemed shall specify the particular Debentures
to be so redeemed. In case any Debenture is to be redeemed in part only, the
notice which relates to such Debenture shall state the portion of the principal
amount thereof to be redeemed, and shall state that on and after the redemption
date, upon surrender of such Debenture, a new Debenture or Debentures of that
series in principal amount equal to the unredeemed portion thereof will be
issued.
(b) The Company shall give the Trustee at least 45 days' advance
notice of the date fixed for redemption (unless shorter notice shall be required
by the Trustee) as to the aggregate principal amount of Debentures of the series
to be redeemed, and if less than the entire aggregate principal amount of such
series is to be redeemed, thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or General Manager, instruct
the Trustee or any paying agent to call all or any part of the Debentures of a
particular series for redemption and to give notice of redemption in the manner
set forth in this Section, such notice to be in the name of the Company or its
own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying
agent, the Company shall deliver or cause to be delivered to, or permit to
remain with, the Trustee or such paying agent, as the case may be, such
Debenture Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to
give any notice by mail that may be required under the provisions of this
Section.
Section 3.03. (a) If the giving of notice of redemption shall have
been completed as above provided, the Debentures or portions of Debentures of
the series to be redeemed specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and
interest on such Debentures or portions of Debentures shall cease to accrue on
and after the date fixed for redemption, unless the Company shall default in the
payment of such redemption price and accrued interest with respect to any such
Debenture or portion thereof. On presentation and surrender of such Debentures
on or after the date fixed for redemption at the place of payment specified in
the notice, such Debentures shall be paid and redeemed at the applicable
redemption price for such series, together with interest accrued thereon to the
date fixed for redemption (but if the date fixed for redemption is an interest
payment date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute, the Trustee shall authenticate
and the office or agency where the Debenture is presented shall make available
for delivery to the holder thereof, at the expense of the Company, a new
Debenture or Debentures of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debenture so presented.
Section 3.04. The provisions of Sections 3.04, 3.05 and 3.06 shall
apply to any sinking fund for the retirement of Debentures of a series, except
as otherwise specified as contemplated by Section 2.01 for Debentures of that
series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of that series.
Section 3.05. The Company (i) may deliver Outstanding Debentures of a
series (other than any previously called for redemption) and (ii) may apply as a
credit Debentures of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Debentures or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Debentures, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of such series required to be made
pursuant to the terms of such Debentures as provided for by the terms of that
series; provided that such Debentures have not been previously so credited. Such
Debentures shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Debentures for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 3.06. Not less than 45 days prior to each sinking fund payment
date for any series of Debentures, the Company will deliver to the Trustee an
Officer's Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by delivering and crediting Debentures
of that series pursuant to Section 3.05 and the basis for such credit and will,
together with such Officer's Certificate, deliver to the Trustee any Debentures
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Debentures to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 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 3.02. Such notice having been duly
given, the redemption of such Debentures shall be made upon the terms and in the
manner stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as
follows:
Section 4.01. The Company will duly and punctually pay or cause to be
paid the principal of (and premium, if any) and interest on the Debentures
(subject to the Company's right to extend or defer an Interest Payment Date) of
that series at the time and place and in the manner provided herein and
established with respect to such Debentures.
Section 4.02. So long as any series of the Debentures remains
outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, the City and State of New York (which, unless changed, shall be a
corporate trust office or agency of the Trustee), with respect to each such
series and at such other location or locations as may be designated as provided
in this Section 4.02, where (i) Debentures of that series may be presented for
payment, (ii) Debentures of that series may be presented as hereinabove
authorized for registration of transfer and exchange and (iii) notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or General Manager and delivered to the Trustee, designate some
other office or agency for such purposes or any of them. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, 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, notices and demands.
Section 4.03. (a) If the Company shall appoint one or more paying
agents, other than the Trustee, for all or any series of the Debentures, the
Company will cause each such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section, that it will:
(1) hold all sums held by it as such agent for the payment of the
principal of (and premium, if any) or interest on the Debentures of that
series (whether such sums have been paid to it by the Company or by any
other obligor of such Debentures) in trust for the benefit of the persons
entitled thereto;
(2) give the Trustee notice of any failure by the Company (or by any
other obligor of such Debentures) to make any payment of the principal of
(and premium, if any) or interest on the Debentures of that series when the
same shall be due and payable;
(3) at any time during the continuance of any failure referred to in
the preceding paragraph (a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
paying agent; and
(4) perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debentures, it will, on or before each due date of the
principal of (and premium, if any) or interest on Debentures of that series, set
aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.06 and (ii) 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 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 terms and conditions as those upon which 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 sums.
Section 4.04. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
Section 4.05. The Company will not, while any of the Debentures remain
outstanding, consolidate with, merge into, merge into itself or sell or convey
all or substantially all of its property to any other company, unless the
provisions of Article Ten hereof are complied with.
Section 4.06. If there shall have occurred any event that would, with
the giving of notice or the passage of time, or both, constitute an Event of
Default under the Indenture, or the Company shall have given notice of its
selection of an extended interest payment period as provided in the Indenture
and such period, or any extension thereof, shall be continuing, the Company will
not, until all defaulted interest on the Debentures and all interest accrued on
the Debentures during an extended interest payment period and all principal and
premium, if any, then due and payable on the Debentures shall have been paid in
full, (i) declare, set aside or pay any dividend or distribution on any capital
stock of the Company, except for dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, or (ii)
repurchase, redeem or otherwise acquire, or make any sinking fund payment for
the purchase or redemption of, any shares of its capital stock (except by
conversion into or exchange for shares of its capital stock and except for a
redemption, purchase or other acquisition of shares of its capital stock made
for the purpose of an employee incentive plan or benefit plan of the Company or
any of its subsidiaries, if any, and except for mandatory redemption or sinking
fund payments with respect to any series of preferred stock of the Company that
are subject to mandatory redemption or sinking fund requirements, provided that
the aggregate stated value of all such series outstanding at the time of any
such payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by the Company and then outstanding and (2) the
capital and surplus of the Company to be stated on the books of account of the
Company after giving effect to such payment); provided, however, that any moneys
deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this Section.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
Section 5.01. The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Debentures as of such
regular record date; provided that the Company shall not be obligated to furnish
or cause to furnish such list at any time that the list shall not differ in any
respect from the most recent list furnished to the Trustee by the Company 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; provided, however, no such list need be furnished for any series for
which the Trustee shall be the Debenture Registrar.
Section 5.02. (a) The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant owns and has
owned a Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of that series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of Section
5.02(a); or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of Section 5.02(a), and as to
the approximate cost of mailing to such Debentureholders the form of proxy
or other communication, if any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of that series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of Section 5.02(a), a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Debentures of that series or
of all Debentures, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise, the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
Section 5.02(c), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 5.02(c).
Section 5.03. (a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations. Delivery of such reports, documents and information to the Trustee
under this subsection (b) and Section 5.03(a) 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 the covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officer's
Certificate).
(c) The Company covenants and agrees to transmit by mail, first-class
postage prepaid, or reputable overnight delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to Section 5.03(a) and (b) as may be
required by rules and regulations prescribed from time to time by the
Commission.
(d) The Company covenants and agrees to furnish to the Trustee, on or
before September 1, in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
(e) The Company covenants and agrees, during any calendar year in
which original issue discount has accrued on Outstanding Debentures, to file
with the Trustee promptly at the end of each such calendar year a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Debentures as of the end of such year.
Section 5.04. (a) On or before November 1 in each year in which any of
the Debentures are outstanding, the Trustee shall transmit by mail, first-class
postage prepaid, to the Debentureholders, as their names and addresses appear
upon the Debenture Register, a brief report dated as of the preceding September
1, with respect to any of the following events which may have occurred within
the previous 12 months (but if no such event has occurred within such period no
report need be transmitted):
(1) any change to its eligibility under Section 7.09,
and its qualifications under Section 7.08;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Section 7.08(c);
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee if such advances so remaining unpaid aggregate more than
1/2 of 1% of the principal amount of the Debentures outstanding on the date
of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company, or by any other obligor on the
Debentures, to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in paragraphs (2), (3), (4) or
(6) of Section 7.13(b);
(5) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the
date of such report;
(6) any release, or release and substitution, of property subject to
the lien, if any, of this Indenture (and the consideration thereof, if any)
which it has not previously reported;
(7) any additional issue of Debentures which the
Trustee has not previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures or the Debentures of any series,
except any action in respect of a default, notice of which has been or is
to be withheld by it in accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first-class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Debentures of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of such series
outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
Section 6.01. (a) Whenever used herein with respect to Debentures of a
particular series, "Event of Default" means any one or more of the following
events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any of
the Debentures of that series, as and when the same shall become due and
payable, and continuance of such default for a period of 60 days (subject
to the Company's right, if any, to extend or defer an Interest Payment Date
pursuant to Section 2.01 hereof);
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable, whether at maturity, upon redemption, by declaration or
otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series, and continuance of such default
for a period of 3 days;
(3) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company with
respect to that series contained in such Debentures or otherwise
established with respect to that series of Debentures pursuant to Section
2.01 hereof or contained in this Indenture (other than a covenant or
agreement which has been expressly included in this Indenture solely for
the benefit of one or more series of Debentures other than such series) for
a period of 90 days after the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a "Notice
of Default" hereunder, shall have been given to the Company by the Trustee,
by registered or certified mail, or to the Company and the Trustee by the
holders of at least 33% in principal amount of the Debentures of that
series at the time outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any
other similar applicable federal or state law, and such decree or order
shall have continued unvacated and unstayed for a period of 90 days; an
involuntary case shall be commenced under such Code in respect of the
Company and shall continue undismissed for a period of 90 days or an order
for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or insolvency of
the Company or of its property, or for the winding up or liquidation of its
affairs, and such decree or order shall have remained in force unvacated
and unstayed for a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, shall consent to the filing of a bankruptcy proceeding
against it, shall file a petition or answer or consent seeking liquidation
or reorganization under the Federal Bankruptcy Code or other similar
applicable federal or state law, shall consent to the filing of any such
petition or shall consent to the appointment on the ground of insolvency or
bankruptcy of a receiver or custodian or liquidator or trustee or assignee
in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors.
(b) In each and every such case, the Company shall file with the
Trustee written notice of the occurrence of any Event of Default within five
Business Days of the Company's becoming aware of any such Event of Default, and
unless the principal of all the Debentures of that series shall have already
become due and payable, either the Trustee or the holders of not less than 33%
in aggregate principal amount of the Debentures of that series then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Debentureholders), may declare the principal of all the Debentures of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything contained in
this Indenture or in the Debentures of that series or established with respect
to that series pursuant to Section 2.01 hereof to the contrary notwithstanding.
(c) The provisions of subsection (b) of this Section, however, are
subject to the condition that if, at any time after the principal of the
Debentures of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debentures of that series and the principal of (and
premium, if any, on) any and all Debentures of that series which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.06, and any and
all defaults under the Indenture, other than the nonpayment of principal on
Debentures of that series which shall not have become due by their terms, shall
have been remedied or, alternatively, waived as provided in Section 6.06, then
and in every such case the Event or Events of Default giving rise to the
declaration of acceleration will, without further act, be deemed to have been
rescinded and annulled; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
Section 6.02. (a) The Company covenants that (1) in case default shall
be made in the payment of any installment of interest on any of the Debentures
of a series, and such default shall have continued for a period of 60 days, or
(2) in case default shall be made in the payment of the principal of (or
premium, if any, on) any of the Debentures of a series when the same shall have
become due and payable, and such default shall continue for a period of 3 days,
whether upon maturity of the Debentures of a series or upon redemption or upon
declaration or otherwise, or in any payment required by any sinking or analogous
fund established with respect to that series as and when the same shall have
become due and payable, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures of that series,
the whole amount that then shall have become due and payable on all such
Debentures for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate per annum expressed in the
Debentures of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures or the
creditors or property of either, the Trustee shall have power to intervene in
such proceedings and take any action therein that may be permitted by the court
and shall (except as may be otherwise provided by law) be entitled to file such
proofs of claim and other papers and documents as may be necessary or advisable
in order to have the claims of the Trustee and of the holders of Debentures of
such series allowed for the entire amount due and payable by the Company or such
other obligor under the Indenture at the date of institution of such proceedings
and for any additional amount which may become due and payable by the Company or
such other obligor after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to distribute the
same after the deduction of the amount payable to the Trustee under Section
7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Debentures of that series to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to such Debentureholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or 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 payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of that
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law, in
equity, in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize, consent to, accept or adopt on behalf of any Debentureholder any plan
of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
Section 6.03. Any moneys collected by the Trustee pursuant to Section
6.02 with respect to a particular series of Debentures shall be applied in the
order following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee
under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of that series for principal (and premium, if any) and interest,
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 Debentures for principal (and
premium, if any) and interest, respectively; and
THIRD: To the Company.
Section 6.04. No holder of any Debenture of any series shall have any
right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to Debentures of that series specifying such Event of Default, as
hereinbefore provided, and unless also the holders of not less than 33% in
aggregate principal amount of the Debentures of such series then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Debenture of that series with every other such taker and holder and the Trustee,
that no one or more holders of Debentures of that series shall have any right in
any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
of such Debentures, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Debentures of that series. For the protection and enforcement of
the provisions of this Section, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.
Section 6.05. (a) All powers and remedies given by this Article to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any others thereof or of any other powers
and remedies available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture or otherwise
established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed as a waiver of any such default or an acquiescence therein;
and, subject to the provisions of Section 6.04, every power and remedy given by
this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
Section 6.06. The holders of a majority in aggregate principal amount
of the Debentures of any series at the time outstanding, determined in
accordance with Section 8.04, 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 that
series; provided, however, that such direction shall not be in conflict with any
rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time outstanding determined in
accordance with Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed might involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of each series at the time outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of
the holders of all of the Debentures of that series waive any past default in
the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on,
any of the Debentures of that series as and when the same shall become due by
the terms of such Debentures or a call for redemption of Debentures of that
series, which default may be waived by the unanimous consent of the holders of
that series so affected. Upon any such waiver, the default covered thereby shall
be deemed to be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debentures of that series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
Section 6.07. The Trustee shall, within 90 days after the occurrence
of a default with respect to a particular series, transmit by mail, first class
postage prepaid, to the holders of Debentures of that series, as their names and
addresses appear upon the Debenture Register, notice of all defaults with
respect to that series known to the Trustee, unless such defaults shall have
been cured or waived before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
grace periods provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the holders of Debentures of that series;
provided further, that in the case of any default of the character specified in
Section 6.01(a)(3) with respect to Debentures of that series, no such notice to
the holders of the Debentures of that series shall be given until at least 30
days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default,
except (i) a default under Section 6.01(a)(1) or (a)(2) as long as the Trustee
is acting as paying agent for such series of Debentures or (ii) any default as
to which the Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Indenture shall have actual knowledge or
obtained written notice.
Section 6.08. All parties to this Indenture agree, and each holder of
any Debentures by his or her 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
any 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, 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, any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE SEVEN
Concerning the Trustee
Section 7.01. (a) The Trustee, prior to the occurrence of an Event of
Default with respect to Debentures of a series and after the curing of all
Events of Default with respect to Debentures of that series which may have
occurred, shall undertake to perform with respect to Debentures of that series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a series
has occurred (which has not been cured or waived), the Trustee shall exercise
with respect to Debentures of that series 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 individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) 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) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing and waiving of all such Events
of Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with respect
to Debentures of that series be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable with respect to
Debentures of that series except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to Debentures of that series 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
Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision 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
to the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated therein);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(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 the holders of not less than a majority in principal amount of the
Debentures of any series at the time outstanding 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 Trustee
under this Indenture with respect to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur or risk
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture or adequate
indemnity against such risk is not reasonably assured to it.
(c) 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 7.01.
Section 7.02. Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, 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;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or General Manager, the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
(unless other evidence in respect thereof is specifically prescribed herein);
(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) is entitled to receive and may, in the
absence of bad faith on its part, rely upon an Officer's 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 or suffered or
omitted 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, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Debentures (which has not been cured
or waived) to exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) If an Event of Default shall have occurred and be continuing, the
Trustee shall be under no obligation to follow any request, order or direction
of the Company if in the reasonable judgment of the Trustee the following of
such request, order or direction would not be in the best interests of all the
holders;
(g) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(h) 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, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing to do so by the holders
of not less than a majority in principal amount of the outstanding Debentures of
the particular series affected thereby (determined as provided in Section 8.04);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand;
(i) 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; and
(j) Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action or omission of the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than three
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
Section 7.03. (a) The recitals contained herein and in the Debentures
(other than the Certificate of Authentication on the Debentures) shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of the Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than
the Trustee.
Section 7.04. The Trustee or any paying agent or Debenture Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee, paying
agent or Debenture Registrar.
Section 7.05. Subject to the provisions of Section 11.06, all moneys
received by the Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but 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 moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
Section 7.06. (a) The Company covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, such
compensation as the Company and the Trustee may agree upon in writing (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, damage, claim, liability or expense including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee) incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the termination of this Indenture. Such additional
indebtedness shall be a senior lien to that of the Debentures upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debentures, and the Debentures are
hereby subordinated to each such senior lien.
(c) When the Trustee incurs expenses or renders services in connection
with an Event of Default, the expenses (including the reasonable charges and
expenses of its counsel) and compensation for its services are intended to
constitute expenses of administration under applicable federal or state
bankruptcy, insolvency or similar law.
Section 7.07. Except as otherwise provided in Section 7.01, whenever
in the administration of the provisions of this Indenture the Trustee shall deem
it necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, it shall be entitled to
receive, and such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively provided and established by an
Officer's Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
Section 7.08. If the Trustee has acquired or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the 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
Indenture.
Section 7.09. There shall at all times be a Trustee with respect to
the Debentures issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a corporation
or other person permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million dollars, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia 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. The Company may not, nor
may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
Section 7.10. (a) The Trustee or any successor hereafter appointed may
at any time resign with respect to the Debentures of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first-class postage prepaid, to the Debentureholders of
that series, as their names and addresses appear upon the Debenture Register.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee with respect to Debentures of that series by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Debentures of that series, or any Debentureholder of that series who has been a
bona fide holder of a Debenture or Debentures for at least six months may,
subject to the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, shall be adjudged a
bankrupt or insolvent, 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, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 6.08, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who has been a bona
fide holder of a Debenture or Debentures 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 and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to that series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
Section 7.11. (a) In case of the appointment hereunder of a successor
trustee with respect to all Debentures, 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, subject
to any prior lien provided for in Section 7.06(b).
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
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 Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
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 Debentures 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) 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, 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 that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; 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,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, 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 Debentures 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, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee or retiring Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such 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.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first-class postage prepaid, to the Debentureholders,
as their names and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
Section 7.12. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Debentures 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 Debentures
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
Section 7.13. If and when the Trustee shall become a creditor of the
Company (or any other obligor upon the Debentures), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any other obligor upon the Debentures).
ARTICLE EIGHT
Concerning the Debentureholders
Section 8.01. Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate principal amount of
the Debentures of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such action
the holders of such majority or specified percentage of that series have joined
therein may be evidenced by any instrument or any number of instruments of
similar tenor executed by such holders of Debentures of that series in person or
by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for that series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
Section 8.02. Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his, her or its agent or proxy and proof of the holding by any
person of any of the Debentures shall be sufficient if made in the following
manner:
(a) the fact and date of the execution by any such
person of any instrument may be proved in any reasonable
manner acceptable to the Trustee;
(b) the ownership of Debentures shall be proved by
the Debenture Register of such Debentures or by a
certificate of the Debenture Registrar thereof; or
(c) the Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
Section 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal of and premium, if any, and (subject to Section 2.03) interest on
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
Section 8.04. At any time the Debentures are held by any holder other
than SWEPCO Capital I, a Delaware statutory business trust, in determining
whether the holders of the requisite aggregate principal amount of Debentures of
a particular series have concurred in any direction, consent or waiver under
this Indenture, Debentures of that series which are owned by the Company or any
other obligor on the Debentures of that series or by any person directly or
indirectly controlling or controlled by or under common control with the Company
or any other obligor on the Debentures of that series shall be disregarded and
deemed not to be outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Debentures of such series
which the Trustee actually knows are so owned shall be so disregarded.
Debentures so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debentures and that the pledgee is not a person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
Section 8.05. At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.01, of the taking of any action by the
holders of the majority or percentage in aggregate principal amount of the
Debentures of a particular series specified in this Indenture in connection with
such action, any holder of a Debenture of that series which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee, and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debenture. Except as aforesaid, any such action taken by the holder of any
Debenture shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debenture, and of any Debenture issued in exchange
therefor, on registration of transfer thereof or in place thereof, irrespective
of whether or not any notation in regard thereto is made upon such Debenture.
Any action taken by the holders of the majority or percentage in aggregate
principal amount of the Debentures of a particular series specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the holders of all the Debentures of that series.
ARTICLE NINE
Supplemental Indentures
Section 9.01. In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
contained herein or otherwise established with respect to the Debentures;
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of
the Debentures of all or any series as the Board of Directors and the
Trustee shall consider to be for the protection of the holders of
Debentures of all or any series, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions a default or an Event of
Default with respect to that series permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction, condition or provision, such supplemental indenture may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults), may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right
of the holders of a majority in aggregate principal amount of the
Debentures of such series to waive such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this indenture as shall not be
inconsistent with the provisions of this Indenture and shall not adversely
affect the interests of the holders of the Debentures of any series; or
(d) 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 Debenture outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee 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.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02. With the consent (evidenced as provided in Section 8.01)
of the holders of not less than a majority in aggregate principal amount of the
Debentures of each series affected by such supplemental indenture or indentures
at the time outstanding, the Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures of that series under this Indenture;
provided, however, that no such supplemental indenture shall (i) extend the
Fixed Maturity of any Debentures of any series, reduce the principal amount
thereof, reduce the rate or extend the time of payment of interest thereon or
reduce any premium payable upon the redemption thereof, without the consent of
the holder of each Debenture so affected or (ii) reduce the aforesaid percentage
of Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Debenture
then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of
any series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first-class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to that series, be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.04. Debentures of any series, affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
Section 9.05. The Trustee, subject to the provisions of Section 7.01,
is entitled to receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.
ARTICLE TEN
Consolidation, Merger and Sale
Section 10.01. Nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Company or its
successor or successors as an entirety, or substantially as an entirety, to any
other corporation (whether or not affiliated with the Company or its successor
or successors) authorized to acquire and operate the same; provided, however,
the Company hereby covenants and agrees that, upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment of the principal of (premium, if any) and interest on all of the
Debentures of all series in accordance with the terms of each series, according
to their tenor, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture with respect to each series or
established with respect to each series pursuant to Section 2.01 to be kept or
performed by the Company, shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which the Company
shall have been merged, or by the entity which shall have acquired such
property.
Section 10.02. (a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures
of all series outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture or established with respect to each
series of the Debentures pursuant to Section 2.01 to be performed by the Company
with respect to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and thereupon the predecessor corporation shall
be relieved of all obligations and covenants under this Indenture and the
Debentures, except the provisions of Section 7.06 to the extent such provisions
relate to matters occurring before any such consolidation, merger, sale,
conveyance, transfer or other disposition. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Debentures, any or all of
the Debentures issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
successor company, 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 Debentures which previously shall have been
signed and delivered by the officers of the predecessor Company to the Trustee
for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not in
substance) may be made in the Debentures thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debentures
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other corporation (whether or
not affiliated with the Company).
Section 10.03. The Trustee, subject to the provisions of Section 7.01,
is entitled to receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
Section 11.01. This Indenture shall upon Company request cease to be
of further effect (except as hereinafter expressly provided), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) both
(1) all Debentures theretofore authenticated and delivered (other
than Debentures which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.07 have been
delivered to the Trustee for cancellation; and
(2) all Debentures not theretofore delivered to the Trustee for
cancellation shall be deemed to have been paid in accordance with
Section 11.03;
(b) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(c) 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.
In the event there shall be Debentures of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Debentures of all series as to which it is Trustee and if
the other conditions thereto are met. In the event there shall be two or more
Trustees hereunder, then the effectiveness of each such instrument from each
Trustee hereunder shall be conditioned upon receipt of such instruments from
each other Trustee hereunder.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article
Eleven shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 7.06, any and all money, securities and
other property then held by the Trustee for the benefit of the holders of the
Debentures other than money and Government Obligations held by the Trustee
pursuant to Section 11.04.
Section 11.02. If at any time all such Debentures of a particular
series not heretofore delivered to the Trustee for cancellation or which have
not become due and payable as described in Section 11.01 shall have been paid by
the Company by depositing irrevocably with the Trustee as trust funds moneys or
an amount of Governmental Obligations sufficient to pay at maturity or upon
redemption all such Debentures of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if any) and interest
due or to become due to such date of maturity or date fixed for redemption, as
the case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company with respect to that series, then after
the date such moneys or Governmental Obligations, as the case may be, are
deposited with the Trustee: (a) the Company shall be released from its covenants
and other obligations contained in Sections 4.05, 5.03, 10.01, 10.02, and 10.03
and may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant or obligation, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or obligation or by reason of any reference in any such covenant or
obligation to any other provision of this Indenture or any other document, and
any failure to comply with any such covenant or obligation shall not constitute
a Default or an Event of Default with respect to the Debentures of such series;
(b) the occurrence of any event specified in Section 6.01(a)(3) shall not
constitute a Default or an Event of Default with respect to the Debentures of
such series; (c) the Debentures of such series shall thereafter be deemed not to
be "outstanding" solely for purposes of determining whether the Debentureholders
of the requisite aggregate principal amount of Debentures have concurred in any
act under this Indenture with respect to any covenant or obligation from which
the Company has been released pursuant to (a) above or with respect to any event
that shall have ceased to constitute a Default or Event of Default with respect
to Debentures of such series pursuant to (b) above (or the consequences thereof)
PROVIDED that the provisions of this Section 11.02 shall not be deemed to
relieve the Company of its obligations with respect to the payment of the
principal of (and premium, if any) or interest on the outstanding Debentures of
such series. The release of the Company from its obligations under this
Indenture, as provided for in this Section 11.02, shall be subject to the
further condition that the Company first shall have caused to be delivered to
the Trustee an Opinion of Counsel to the effect that Debentureholders of a
series with respect to which a deposit has been made in accordance with this
Section 11.02 will not realize income, gain or loss for federal income tax
purposes as a result of such deposit and release, and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit and release had not occurred.
Section 11.03. If, in addition to satisfying the conditions set forth
in Section 11.01 or 11.02 (except for the requirement of an Opinion of Counsel),
the Company delivers to the Trustee an Opinion of Counsel to the effect that (a)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date of this Indenture there has been
a change in applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Debentureholders of a series with respect to which a deposit has been made in
accordance with Section 11.01 or 11.02 will not realize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (c) the deposit shall not result
in the Company, the Trustee or the trust being deemed an "investment company"
under the Investment Company Act of 1940, as amended, then, in such event, the
Company will be deemed to have paid and discharged the entire indebtedness on
that series and the holder thereof shall thereafter be entitled to receive
payment solely from the trust fund described above. Notwithstanding the
satisfaction and discharge of any Debentures as aforesaid, the obligations of
the Company in respect of such Debentures under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article Eleven shall survive.
Section 11.04. All moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall
be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular series of Debentures for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.05. In connection with the satisfaction and discharge of
this Indenture all moneys or Governmental Obligations then held by any paying
agent under the provisions of this Indenture shall, upon demand of the Company,
be paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys or Governmental Obligations.
Section 11.06. Any moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company, in trust for
payment of principal of or premium or interest on the Debentures of a particular
series that are not applied but remain unclaimed by the holders of such
Debentures for at least two years after the date upon which the principal of
(and premium, if any) or interest on such Debentures shall have respectively
become due and payable, shall, upon written notice from the Company, be repaid
to the Company on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
Section 12.01. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Debenture, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Debentures or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law, in equity or
by constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
Section 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
Section 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
Section 13.03. Except as otherwise expressly provided herein, any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first-class
postage prepaid in a post-office letter box addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Central and South
West Corporation, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202, Attention:
Director, Finance. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
Section 13.04. This Indenture and each Debenture shall be deemed to be
a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of that State, without regard to
the conflicts of laws principles thereof.
Section 13.05. (a) Upon any application or demand by the Company to
the Trustee to take any action under any of the provisions of this Indenture,
the Company shall furnish to the Trustee an Officer's Certificate stating that
all conditions precedent 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 have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (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 such person, he has 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 or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.06. Simultaneously with the execution of this Indenture,
the Company shall deliver to the Trustee an Opinion of Counsel stating that, in
the opinion of such counsel, (a) this Indenture has been duly authorized by and
lawfully executed and delivered on behalf of the Company, is in full force and
effect and is legal, valid and binding upon the Company in accordance with its
terms, except to the extent limited by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights and (b) the Debentures have been
authorized, executed and delivered by the Company and constitute legal, valid
and binding obligations of the Company in accordance with their terms.
Section 13.07. Except as provided pursuant to Section 2.01 pursuant to
a Board Resolution, and as set forth in an Officer's Certificate, or established
in one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Debenture or the date of
redemption of any Debenture shall not be a Business Day then payment of interest
or principal (and premium, if any) may be made on the next succeeding Business
Day with the same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such nominal date.
Section 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 3.18(c) of the Trust Indenture Act, such imposed duties shall control.
Section 13.09. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
Section 13.10. In case any one or more of the provisions contained in
this Indenture or in the Debentures of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Debentures, but this Indenture and such Debentures shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
Section 13.11. The Company will have the right at all times to assign
any of its rights or obligations under this Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. The Indenture may
not otherwise be assigned by the parties thereto.
Section 13.12. The parties intend that, for each holder of a Debenture
and each person that acquires a beneficial ownership interest in a Debenture,
such Debentures shall constitute indebtedness for purposes of United States
federal, state and local taxes.
ARTICLE FOURTEEN
Subordination of Debentures
Section 14.01. The Company covenants and agrees, and each holder of
Debentures issued hereunder by his acceptance thereof likewise covenants and
agrees, that all Debentures shall be issued subject to the provisions of this
Article Fourteen; and each holder of a Debenture, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of and premium, if any, and interest on
all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the occurrence of
any default or Event of Default hereunder.
Section 14.02. In the event and during the continuation of any default
in the payment of principal, premium, interest or any payment due on any Senior
Indebtedness continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness (and the Trustee has received
written notice thereof from the Company or one or more holders of Senior
Indebtedness or their representative or representatives or a trustee), unless
and until such default shall have been cured or waived or shall have ceased to
exist, and in the event that the maturity of any Senior Indebtedness has been
accelerated because of a default (and the Trustee has received written notice
thereof from the Company or one or more holders of Senior Indebtedness or their
representative or representatives or a trustee), then no payment shall be made
by the Company with respect to the principal (including redemption and sinking
fund payments) of or premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by the
preceding paragraph of this Section 14.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
Section 14.03. Upon any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made on account of the principal (and premium, if any) or interest on the
Debentures; and upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article Fourteen, shall be paid by the Company, by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, by the holders of the Debentures or by the
Trustee under this Indenture if received by them or it directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Fourteen, the words, "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, the payment of which
is subordinated at least to the extent provided in this Article Fourteen with
respect to the Debentures to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Ten hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 14.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Ten hereof.
Nothing in Section 14.02 or in this Section 14.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.
Section 14.04. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Debentures shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article Fourteen,
and no payment over pursuant to the provisions of this Article Fourteen, to or
for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article Fourteen are
and are intended solely for the purposes of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness on the other hand.
Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Fourteen, the Trustee, subject to the provision of Section 7.01,
and the holders of the Debentures shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Debentures, for the purposes of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness 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 Fourteen.
Section 14.05. Each holder of a Debenture by acceptance thereof
authorizes and directs the Trustee in his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Fourteen and appoints the Trustee his attorney-in-fact for any and
all such purposes.
Section 14.06. The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or paying
agent in respect of the Debentures pursuant to the provisions of this Article
Fourteen. Notwithstanding the provisions of this Article Fourteen 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 of
monies to or by the Trustee or paying agent in respect of the Debentures
pursuant to the provisions of this Article Fourteen, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such facts
exist; provided that if the Trustee shall not have received the notice provided
for in this Section 14.06 at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes 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.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
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 Fourteen, 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 14.07. The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Fourteen in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee or any Authenticating Agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Fourteen, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 7.01, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Debentures,
the Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Fourteen or otherwise.
Section 14.08. No right of any present or future holder of any Senior
Indebtedness 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 which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the holders of the Debentures to the holders of
Senior Indebtedness, 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 Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other person.
The Bank of New York, as Trustee, hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
SOUTHWESTERN ELECTRIC POWER COMPANY
By:
Wendy G. Hargus, Treasurer
Attest:
By:
Marilyn Kirkland, Secretary
THE BANK OF NEW YORK
as Trustee
By:
Its:
Attest:
By:
Its:
STATE OF )
) ss.
COUNTY OF )
On , 1997 before me personally appeared Wendy G. Hargus, personally
known to me or proved to me on the basis of satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me
that she executed the same in her authorized capacity, and that by her signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
Witness my hand and official seal.
------------------------------
Signature of Notary Public
My Commission Expires:
STATE OF )
) ss.
COUNTY OF )
On this day of , 1997 before me personally appeared Marilyn S.
Kirkland proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged to me that
she executed the same in her authorized capacity and that by her signature on
the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
Witness my hand and official seal.
---------------------------
Signature of Notary Public
My Commission Expires:
SOUTHWESTERN ELECTRIC POWER COMPANY
AND
THE BANK OF NEW YORK,
as Trustee
--------------------
First Supplemental Indenture
Dated as of May 1, 1997
TO
INDENTURE
Dated as of May 1, 1997
--------------------
7.875% Junior Subordinated Deferrable Interest Debentures, Series A
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of the first day of
May, 1997 (the "First Supplemental Indenture"), between SOUTHWESTERN ELECTRIC
POWER COMPANY, a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as the "Company" or
"SWEPCO"), and THE BANK OF NEW YORK, a New York banking corporation, as trustee
(hereinafter sometimes referred to as the "Trustee") (under the Indenture dated
as of May 1, 1997 between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior subordinated
debentures (the "Debentures"), which Debentures are to be issued from time to
time in such series as may be determined by the Company under the Indenture, in
an unlimited aggregate principal amount which may be authenticated and delivered
thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to be
known as its 7.875% Junior Subordinated Deferrable Interest Debentures, Series A
(such series being hereinafter referred to as the "Series A Debentures"), which
Series A Debentures will be issued to evidence a loan made to the Company of the
proceeds from the issuance by SWEPCO Capital I, a Delaware business trust (the
"Trust"), of preferred undivided beneficial interests in the assets of the Trust
(the "Preferred Securities") and common undivided beneficial interests in the
assets of the Trust (the "Common Securities") pursuant to the terms of an
Amended and Restated Trust Agreement (the "Trust Agreement") dated as of May 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 (the "Administrative Trustees"), which Trust Agreement
shall be substantially in the form attached hereto as Annex A, the form and
substance of such Series A Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this First Supplemental
Indenture; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture,
and all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series A Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form and substance
of the Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
Additional Definitions
SECTION 1.01. For all purposes of this First Supplemental
Indenture, capitalized terms used herein without definition shall have the
meanings specified in the Indenture.
SECTION 1.02. The terms defined in this Section, for all
purposes of this First Supplemental Indenture, shall have the respective
meanings specified in this Section.
"Additional Sums" has the meaning specified in Section 5.05 of
this First Supplemental Indenture.
"Additional Taxes" means the sum of any additional taxes,
duties and other governmental charges to which the Trust has become subject from
time to time as a result of a Tax Event.
"Common Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Distributions" means amounts payable in respect of the
Preferred Securities and Common Securities as provided in the Trust Agreement.
"Extension Period' has the meaning specified in Section 4.01
of this First Supplemental Indenture.
"Guarantee" means the guarantee by the Company of
Distributions on the Preferred Securities of the Trust to the extent provided in
the Guarantee Agreement, substantially in the form attached hereto as Annex B.
"Investment Company Event" means, in respect of the Trust, the
receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a
recognized national tax and securities practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law), the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities of the Trust.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Preferred Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Property Trustee" means, in respect of the Trust, the
commercial bank or trust company identified as the Property Trustee in the Trust
Agreement, solely in its capacity as Property Trustee of the Trust under the
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.
"Special Event" mean a Tax Event or an Investment Company
Event.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities of the Trust, there is more than an insubstantial risk that (i) the
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 A Debentures, (ii) interest payable by the
Company on the Series A Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by SWEPCO, in whole or in part, for
United States federal income tax purposes or (iii) the Trust 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" has the meaning specified in the second recital of
this First Supplemental Indenture.
"Trust Agreement" has the meaning specified in the second
recital of this First Supplemental Indenture.
ARTICLE TWO
General Terms and Conditions of
the Series A Debentures
SECTION 2.01. There shall be and is hereby authorized a series
of Debentures designated the "7.875% Junior Subordinated Deferrable Interest
Debentures, Series A," limited in aggregate principal amount to $113,402,075,
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series A Debentures. The Series A Debentures
shall mature and the principal shall be due and payable, together with all
accrued and unpaid interest thereon, on April 30, 2037, provided that the
Company may shorten such maturity date at any time and from time to time at the
election of the Company, but in no event shall such maturity date be earlier
than April 30, 2002, and further provided that if the Company exercises its
right to liquidate the Trust and distribute the Debentures to holders of the
Preferred Securities pursuant to Section 904 of the Trust Agreement, the
maturity date of such Debentures may be shortened to any date selected by the
Company that is (i) no earlier than the date five years after the initial
issuance of the Preferred Securities and (ii) no later than April 30, 2037. The
Series A Debentures shall be issued in the form of registered Series A
Debentures without coupons.
SECTION 2.02. The Series A Debentures shall be issued in
certificated form and registered in the name of the Property Trustee or its
nominee, subject to the exchange of such certificated Series A Debentures for a
Global Debenture as provided in the Trust Agreement. Series A Debentures
represented by a Global Debenture will not be exchangeable for, and will not
otherwise be issuable as, Series A Debentures in certificated form, except as
provided in this First Supplemental Indenture. Principal and interest on the
Series A Debentures will be payable, the transfer of such Series A Debentures
will be registrable and such Series A Debentures will be exchangeable for Series
A Debentures bearing identical terms and provisions at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register or, with respect to a registered holder of
$1,000,000 or more in aggregate principal amount of Series A Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date (as defined in Section 2.03 below) electing to
have payments made by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such designated
account. The Company and the Trustee will act as co-paying agents for the Series
A Debentures. Payments of principal of and interest on the Series A Debentures
issued as a Global Debenture will be made to the Depositary. The Depository
Trust Company (55 Water Street, New York) will initially act as the Depositary
for the Global Debenture.
A Global Debenture shall be exchangeable for Series A
Debentures registered in the names of persons other than the Depositary or its
nominee only if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Debenture and no successor
depositary shall have been appointed, or if at any time the Depositary ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
Global Debenture shall be so exchangeable or (iii) the Global Debenture was
issued pursuant to Section 904 of the Trust Agreement and there shall have
occurred and be continuing an Event of Default with respect to such Global
Debenture and the holders of at least a majority of the beneficial interests in
such Global Debenture advise the Trustee in writing that the continuation of a
book-entry system through the Depositary is no longer in their best interest,
then the Trustee shall notify the Depositary and the Depositary shall notify all
holders of beneficial interests in the Global Debenture of the occurrence of
such event and the availability of Series A Debentures to such holders. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as the
Depositary shall direct.
SECTION 2.03. Each Series A Debenture will bear interest at
the rate of 7.875% per annum from and including the original date of issuance or
from the most recent Interest Payment Date referred to below to which interest
has been paid or duly provided for until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing on June 30, 1997, to the person in whose name such Series A
Debenture or any predecessor Series A Debenture is registered at the close of
business on the Business Day next preceding that Interest Payment Date (each, a
"Record Date"); provided, however, that if the Series A Debentures shall not be
in the form of a Global Debenture, the record date shall be the 15th day of the
month in which the relevant Interest Payment Date occurs. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series A
Debenture (or one or more predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Series A Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Series A
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture; provided, however, that
interest (other than interest described in the next sentence) shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period, unless the Company has elected to make a full or partial
payment of interest accrued on the Series A Debentures on that Interest Payment
Date. Any partial payment of interest accrued on the Series A Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to such registered holders based upon the principal amount of Series A
Debentures then held by such registered holders.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period. In the event that any date on which interest is payable
on the Series A Debentures is not a Business Day, then payment of interest
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 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.
ARTICLE THREE
Redemption of the Series A Debentures
SECTION 3.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A Debentures,
in whole, at any time, or in part, from time to time, on or after April 30,
2002, at a redemption price equal to 100% of the principal amount of Series A
Debentures to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption. If the Series A Debentures are only partially redeemed
pursuant to this Section, the Series A Debentures will be redeemed by lot or by
any other method utilized by the Trustee, such method to be determined solely in
the discretion of the Trustee. The Company may not redeem the Series A
Debentures in part unless all accrued and unpaid interest has been paid in full
on all outstanding Series A Debentures for all interest periods terminating on
or prior to the date of redemption.
SECTION 3.02. If a Special Event in respect of the Trust shall
occur and be continuing, the Company may, at its option, redeem the Series A
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole, but not in part, subject to the provisions of the Indenture. The
redemption price for any Series A Debenture so redeemed shall be equal to 100%
of the principal amount of the Series A Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of redemption.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Subject to Section 4.06 of the Indenture and
Section 5.06 of this First Supplemental Indenture, the Company shall have the
right, at any time during the term of the Series A Debentures, to defer the
payment of interest on such Series A Debentures at any time and from time to
time for a period not to exceed 20 consecutive calendar quarters from the last
Interest Payment Date to which interest was paid in full (but in no event beyond
the maturity of the Series A Debentures) (each, an "Extension Period"), during
which periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of such Extension Period
the Company shall pay all interest then accrued and unpaid thereon. Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions of such Extension Period shall not exceed
20 consecutive quarters or extend beyond the maturity of the Series A
Debentures. No such Extension Period shall end on a date other than an Interest
Payment Date. Upon termination of any such Extension Period and upon the payment
of all accrued and unpaid 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.
SECTION 4.02. The Company shall give the Trustee and the
Administrative Trustees written notice of (i) any election by the Company to
initiate an Extension Period and the duration thereof, (ii) any election by the
Company to extend an Extension Period beyond the Interest Payment Date on which
that Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full or partial
payment of interest accrued on the Series A Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment. In no event
shall such notice by the Company be given less than one Business Day prior to
the earlier of (A) the date the Administrative Trustees are required to give
notice to The New York Stock Exchange or other applicable self-regulatory
organization or to the holders of the Preferred Securities of the record date or
the date Distributions are payable but in any event not less than one Business
Day prior to such record date or (B) one Business Day prior to such date the
Distributions on the Preferred Securities would have been payable except for the
election to begin such Extension Period. Upon receipt of any such notice, the
Trustee shall give written notice of the Company's election by mail to the
Series A Debentureholders within five Business Days. The Company shall make a
public announcement of any such election in accordance with New York Stock
Exchange rules not less than five Business Days prior to such Record Date.
ARTICLE FIVE
Additional Terms Relating to the Preferred Securities
SECTION 5.01. (a) For so long as any Preferred Securities
remain outstanding, if, upon an Event of Default, the Trustee fails or the
holders of not less than 33% in aggregate principal amount of the outstanding
Series A Debentures fail to declare the principal of all of the Series A
Debentures to be immediately due and payable, the holders of at least 33% in
aggregate liquidation preference of the Preferred Securities then outstanding
(determined in accordance with the Trust Agreement) shall have such right by a
notice in writing to the Company and the Trustee; and upon any such declaration
such principal amount of and the accrued interest on all of the Series A
Debentures shall become immediately due and payable (subject to Section 6.01(c)
of the Indenture), provided that the payment of principal and interest on such
Series A Debentures shall remain subordinated to the extent provided in the
Indenture.
(b) For so long as any Preferred Securities remain
outstanding, if, upon an Event of Default, the Trustee fails to proceed to
enforce any right available to the holders of the Series A Debentures for 60
days, the holders of at least 33% in aggregate liquidation preference of the
Preferred Securities then outstanding (determined in accordance with the Trust
Agreement) shall have the right, to the fullest extent permitted by law, to
directly institute proceedings for enforcement of such rights.
(c) For so long as any Preferred Securities remain
outstanding, to the fullest extent permitted by law, upon the occurrence of an
Event of Default described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture,
any holder of Preferred Securities shall have the right to institute a
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on the Series A Debentures having a
principal amount equal to the aggregate liquidation preference of the related
Preferred Securities held by such holder after the due date specified for such
payment in the Series A Debentures.
SECTION 5.02. For so long as any Preferred Securities remain
outstanding, if the holders of a majority in aggregate principal amount of the
Series A Debentures fail to waive an Event of Default in accordance with Section
6.06 of the Indenture, the holders of a majority in aggregate liquidation
preference of the Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) have such right.
SECTION 5.03. For so long as any Preferred Securities remain
outstanding, the Company shall not consolidate with or merge into any other
corporation 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 such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Guarantee and
does not give rise to any breach or violation of the Trust Agreement or the
Guarantee.
SECTION 5.04. For so long as any Preferred Securities remain
outstanding, the Company shall not terminate the Indenture or amend or
supplement the Indenture in any manner that materially adversely affects the
interests of the holders of the Preferred Securities, and subject to Section
6.01(c) of the Indenture, no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective without the prior consent to
such waiver of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) unless and until the principal of the
Series A Debentures and all accrued and unpaid interest thereon have been paid
in full.
SECTION 5.05. In the event that (i) the Trust is the holder of
all of the Outstanding Series A Debentures, (ii) a Tax Event in respect of the
Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Series A Debentures pursuant to Section 3.02 of this First
Supplemental Indenture or (b) terminated the Trust pursuant to Section 902(b) of
the Trust Agreement, the Company shall pay to the Trust (and its permitted
successors or assigns under the Trust Agreement) for so long as the Trust (or
its permitted successor or assignee) is the registered holder of any Series A
Debentures, such additional amounts as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by the Trust on the related Preferred
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 the Indenture or the
Series A Debentures there is a reference in any context to the payment of
principal of or interest on the Series A Debentures, 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 interest pursuant to Section 4.01 of this
First Supplemental Indenture or the Series A Debentures shall not defer the
payment of any Additional Sums that may be due and payable during such interest
payment period.
SECTION 5.06. For so long as any Preferred Securities remain
outstanding, the Company covenants and agrees with each holder of Series A
Debentures issued to the Trust that it will not, and it will not permit any
Subsidiary of the Company to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or junior in
interest to the Series A Debentures or make any guarantee payments with respect
to the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of the Company or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of the Company that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
the Company and then outstanding and (2) the capital and surplus of the Company
to be stated on the books of account of the Company after giving effect to such
payment, provided, however, that any moneys deposited in any sinking fund and
not in violation of this provision may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by the Company with respect to any securities of a
subsidiary of the Company, provided that the proceeds from the issuance of such
securities were used to purchase Debentures of any series) if at such time (i)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) the Company shall have given notice of its election to begin an Extension
Period as provided herein and shall not have rescinded such notice, or such
period, or any extension thereof, shall be continuing.
SECTION 5.07. For so long as any Preferred Securities remain
outstanding, the Company also covenants with each holder of Series A Debentures
issued to the Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
the Trust, except (a) in connection with a distribution of the Series A
Debentures to the holders of Preferred Securities in liquidation of the Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to remain classified as a "grantor trust" and not to be classified as an
association taxable as a corporation for United States federal income tax
purposes.
ARTICLE SIX
Form of Series A Debenture
The Series A Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be issued as a Global Debenture,
insert--This Debenture is a Global Debenture 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 Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture 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, or to a successor Depositary or
to a nominee of such successor Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture 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.]
No.___________ $__________
CUSIP No. ______________
Southwestern Electric Power Company
7.875%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly
organized and existing under the laws of the State of Delaware (herein referred
to as the "Company", which term includes any successor corporation under the
Indenture), for value received, hereby promises to pay to _____________________
or registered assigns, the principal sum of $____, on April 30, 2037, or on such
earlier date as the Company may elect subject to the terms of Section 2.01 of
the First Supplemental Indenture and to pay interest on such principal sum from
and including May 8, 1997 or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing on June 30, 1997, at the rate of 7.875%
per annum, until the principal hereof shall have become due and payable, and on
any overdue principal and premium, if any, and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months and, for any period shorter than a full calendar month, on the
basis of the actual number of days elapsed in such period. In the event that any
date on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
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 such date. 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 Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the Business Day
next preceding that Interest Payment Date (each a "Record Date"); provided,
however, that if this Debenture shall not be in the form of a Global Debenture
the record date shall be the 15th day of the month in which the relevant
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may then be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture
hereinafter referred to; provided, however, that interest shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period (as defined below), unless the Company has elected to make a
full or partial payment of interest accrued on this Debenture on that Interest
Payment Date. Any partial payment of interest accrued on this series of
Debentures on any Interest Payment Date falling within an Extension Period shall
be paid pro rata to the registered holder of this Debenture based upon the
principal amount of this Debenture in relation to the aggregate principal amount
of all Debentures of this series then outstanding. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered holder at such address
as shall appear in the Debenture Register or, with respect to a registered
holder of $1,000,000 or more in aggregate principal amount of Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee its attorney-in-fact for
any and all such purposes. Each holder hereof, by its acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
SOUTHWESTERN ELECTRIC POWER COMPANY
By
Treasurer
Attest:
Secretary
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee or as Authenticating Agent
By
Authorized Signatory
<PAGE>
(REVERSE)
7.875% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
(continued)
This Debenture is one of a duly authorized series of
debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture (as defined below), all issued or to be issued in one
or more series under and pursuant to an Indenture dated as of May 1, 1997 duly
executed and delivered between the Company and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (herein referred to as the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of May 1, 1997 between
the Company and the Trustee (such Indenture as so supplemented being hereinafter
referred to as the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. By the terms of the
Indenture, the Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Debentures is limited in aggregate principal amount as
specified in the First Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Debentures of this series at the
option of the Company, without premium or penalty, in whole or in part at any
time and from time to time on or after April 30, 2002 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount of the
Debentures of this series to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption. If the Debentures of this series are
only partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures of this series will be redeemed by lot or by any other method
utilized by the Trustee, such method to be determined solely in the discretion
of the Trustee.
If a Special Event in respect of the Trust shall occur and be
continuing, the Company may, at its option, redeem this Debenture at any time
within 90 days of the occurrence of such Special Event, in whole, but not in
part, subject to the provisions of the Indenture. The redemption price for any
Debenture of this series so redeemed shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such redemption.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Debentures of
this series shall have occurred and be continuing, the principal of all of the
Debentures of this series may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of the Debentures of this series upon compliance by
the Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails or the holders of not less than
33% in principal amount of the outstanding Debentures of this series fail to
declare the principal of all of the Debentures of this series to be immediately
due and payable, the holders of at least 33% in aggregate liquidation preference
of the Preferred Securities then outstanding (determined in accordance with the
related Trust Agreement) shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures of this series shall become
immediately due and payable (subject to Section 6.01(c) of the Indenture),
provided that the payment of principal and interest on such Debentures shall
remain subordinated to the extent provided in the Indenture.
For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
For so long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series A Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series A
Debentures.
No reference herein to the Indenture and no provision of this
Debenture 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 Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to the provisions of the Indenture, the Company shall
have the right, at any time during the term of this series of Debentures, to
defer the payment of interest on this series of Debentures at any time and from
time to time for a period not to exceed 20 consecutive calendar quarters from
the last Interest Payment Date to which interest was paid in full (but in no
event beyond the maturity of the Series A Debentures) (each, an "Extension
Period") during which periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of such
Extension Period the Company shall pay all interest then accrued and unpaid
thereon. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions of such Extension Period
shall not exceed 20 consecutive quarters or extend beyond the maturity of the
Series A Debentures. Upon termination of any such Extension Period and upon the
payment of all accrued and unpaid interest then due, the Company may select 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.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If the Debenture is to be issued as a Global Debenture,
insert--This Global Debenture is exchangeable for Debentures in certificated
form only under certain limited circumstances set forth in the Indenture.] The
Debentures of this series are issuable in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE SEVEN
Original Issue of Series A Debentures
Series A Debentures in the aggregate principal amount of
$113,402,075 may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Debentures to or upon the written order of the Company, signed by its
Chairman, President, Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
the form of Series A Debenture that are defined in the Indenture shall have the
several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
SOUTHWESTERN ELECTRIC POWER COMPANY
By:
Wendy G. Hargus, Treasurer
THE BANK OF NEW YORK, as Trustee
By:
AMENDED AND RESTATED
TRUST AGREEMENT
among
SOUTHWESTERN ELECTRIC 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 May 1, 1997
SWEPCO CAPITAL I
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
Section 101. Definitions........................................... 2
ARTICLE II
Establishment of the Trust
Section 201. Name.................................................. 11
Section 202. Office of the Delaware Trustee; Principal Place
of Business........................................... 11
Section 203. Initial Contribution of Trust Property;
Organizational Expenses............................... 11
Section 204. Issuance of the Preferred Securities.................. 12
Section 205. Issuance of the Common Securities; Subscription
and Purchase of Debentures..................... 12
Section 206. Declaration of Trust.................................. 12
Section 207. Authorization to Enter into Certain Transactions...... 13
Section 208. Assets of Trust....................................... 17
Section 209. Title to Trust Property............................... 17
ARTICLE III
Payment Account
Section 301. Payment Account....................................... 17
ARTICLE IV
Distributions; Redemption
Section 401. Distributions......................................... 17
Section 402. Redemption............................................ 18
Section 403. Subordination of Common Securities.................... 20
Section 404. Payment Procedures.................................... 21
Section 405. Tax Returns and Reports............................... 21
Section 406. Payment of Taxes, Duties, Etc. of the Trust........... 22
ARTICLE V
Trust Securities Certificates
Section 501. Initial Ownership..................................... 22
Section 502. The Trust Securities Certificates..................... 22
Section 503. Execution and Delivery of Trust Securities
Certificates.......................................... 22
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates............................... 24
Section 506. Persons Deemed Securityholders........................ 24
Section 507. Access to List of Securityholders' Names and
Addresses............................................. 24
Section 508. Maintenance of Office or Agency....................... 25
Section 509. Appointment of Paying Agent........................... 25
Section 510. Ownership of Common Securities by Depositor........... 26
Section 511. Book-Entry Preferred Securities Certificates;
Common Securities Certificate......................... 26
Section 512. Notices to Clearing Agency............................ 27
Section 513. Definitive Preferred Securities Certificates.......... 27
Section 514. Rights of Securityholders............................. 28
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 601. Limitations on Voting Rights.......................... 29
Section 602. Notice of Meetings.................................... 30
Section 603. Meetings of Preferred Securityholders................. 30
Section 604. Voting Rights......................................... 31
Section 605. Proxies, etc.......................................... 31
Section 606. Securityholder Action by Written Consent.............. 31
Section 607. Record Date for Voting and Other Purposes............. 32
Section 608. Acts of Securityholders............................... 32
Section 609. Inspection of Records................................. 33
ARTICLE VII
Representations and Warranties
Section 701. Representations and Warranties of the Bank and the
Property Trustee............................... 33
Section 702. Representations and Warranties of the Delaware
Bank and the Delaware Trustee......................... 34
Section 703. Representations and Warranties of Depositor........... 36
ARTICLE VIII
The Trustees
Section 801. Certain Duties and Responsibilities................... 36
Section 802. Certain Notices....................................... 38
Section 803. Certain Rights of Property Trustee.................... 38
Section 804. Not Responsible for Recitals or Issuance of
Securities............................................ 40
Section 805. May Hold Securities................................... 40
Section 806. Compensation; Indemnity; Fees......................... 40
Section 807. Corporate Property Trustee Required; Eligibility
of Trustees........................................... 41
Section 808. Conflicting Interests................................. 42
Section 809. Co-Trustees and Separate Trustee...................... 42
Section 810. Resignation and Removal; Appointment of Successor..... 43
Section 811. Acceptance of Appointment by Successor................ 45
Section 812. Merger, Conversion, Consolidation or Succession to
Business.............................................. 46
Section 813. Preferential Collection of Claims Against Depositor
or Trust.............................................. 46
Section 814. Reports by Property Trustee........................... 46
Section 815. Reports to the Property Trustee....................... 47
Section 816. Evidence of Compliance with Conditions Precedent...... 47
Section 817. Number of Trustees.................................... 47
Section 818. Delegation of Power................................... 47
Section 819. Voting................................................ 48
ARTICLE IX
Termination, Liquidation and Merger
Section 901. Termination Upon Expiration Date...................... 48
Section 902. Early Termination..................................... 48
Section 903. Termination........................................... 49
Section 904. Liquidation........................................... 49
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust............................. 50
ARTICLE X
Miscellaneous Provisions
Section 1001. Limitation of Rights of Securityholders............... 52
Section 1002. Amendment............................................. 52
Section 1003. Separability.......................................... 53
Section 1004. Governing Law......................................... 53
Section 1005. Payments Due on Non-Business Day...................... 53
Section 1006. Successors............................................ 54
Section 1007. Headings.............................................. 54
Section 1008. Reports, Notices and Demands.......................... 54
Section 1009. Agreement Not to Petition............................. 55
Section 1010. Trust Indenture Act; Conflict with Trust Indenture
Act................................................... 55
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture............................................. 55
Section 1012. Counterparts........................................... 56
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities
SWEPCO CAPITAL I
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
ss. 310 (a)(1)......................................... 807
(a)(2)......................................... 807
(a)(3)......................................... 809
(a)(4)......................................... 207(a)(ii)
(b)............................................ 808
ss. 311 (a)............................................ 813
(b)............................................ 813
ss. 312 (a)............................................ 507
(b)............................................ 507
(c)............................................ 507
ss. 313 (a)............................................ 814(a)
(a)(4)......................................... 814(b)
(b)............................................ 814(b)
(c)............................................ 1008
(d)............................................ 814(c)
ss. 314 (a)............................................ 815
(b)............................................ Not Applicable
(c)(1)......................................... 816
(c)(2)......................................... 816
(c)(3)......................................... Not Applicable
(d)............................................ Not Applicable
(e)............................................ 101, 816
ss. 315 (a)............................................ 801(a), 803(a)
(b)............................................ 802, 1008
(c)............................................ 801(a)
(d)............................................ 801, 803
(e)............................................ Not Applicable
ss. 316 (a)............................................ Not Applicable
(a)(1)(A)...................................... Not Applicable
(a)(1)(B)...................................... Not Applicable
(a)(2)......................................... Not Applicable
(b)............................................ Not Applicable
(c)............................................ 607
ss. 317 (a)(1)......................................... Not Applicable
(a)(2)......................................... Not Applicable
(b)............................................ 509
ss. 318 (a)............................................ 1010
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 1, 1997,
among (i) Southwestern Electric Power Company, a Delaware corporation (including
any successors or assigns, the "Depositor"), (ii) The Bank of New York, a New
York banking corporation duly organized and existing under the laws of the State
of New York, as property trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) The Bank of New York (Delaware), a Delaware banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee," and, in its separate corporate capacity and not
in its capacity as Delaware Trustee, the "Delaware Bank") (iv) Wendy G. Hargus,
an individual, and R. Russell Davis, an individual, each of whose address is c/o
Southwestern Electric Power Company (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 (v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee, and Wendy G. Hargus, as Administrative Trustee (the "Prior
Administrative Trustee") have heretofore duly declared and established a
business trust pursuant to the Delaware Business Trust Act by the entering into
of that certain Trust Agreement, dated as of January 29, 1997 (the "Original
Trust Agreement"), and by the execution and filing by the Delaware Trustee, the
Property Trustee and the Prior Administrative Trustee with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on January 29,
1997, the form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property
Trustee and the Prior Administrative Trustee desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of an additional Administrative Trustee;
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 101. 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;
(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 608.
"ADDITIONAL AMOUNT" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of additional
interest accrued on interest in arrears and paid by the Depositor on a Like
Amount of Debentures for such period.
"ADDITIONAL SUMS" has the meaning specified in Section 5.05 of
the First Supplemental Indenture.
"ADMINISTRATIVE TRUSTEE" means each of Wendy G. Hargus and R.
Russell Davis, solely in his capacity as Administrative Trustee of the Trust
formed and continued hereunder and not in his 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 adjudging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of or in respect of such Person under the United States
Bankruptcy Code or any other similar applicable Federal or State law,
and the continuance of any such decree or order unvacated and unstayed
for a period of 90 days; or the commencement of an involuntary case
under the Federal Bankruptcy Code in respect of such Person, which shall
continue undismissed for a period of 90 days or entry of an order for
relief in such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and such
decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such
Person of a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or other similar
applicable Federal or State law, or the consent by such Person to the
filing of any such petition or to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or
trustee or assignee in bankruptcy or insolvency of such Person or of its
property, or shall make a general assignment for the benefit of
creditors.
"BANKRUPTCY LAWS" has the meaning specified in Section 1009.
"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 appropriate Trustee.
"BOOK ENTRY PREFERRED SECURITIES CERTIFICATES" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 511.
"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 Depositor 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.
"CERTIFICATE OF TRUST" means the certificate of trust filed with
the Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. 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 date of execution and delivery of this
Trust Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"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 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.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"CORPORATE TRUST OFFICE" means the principal corporate trust
office of the Property Trustee or Debenture Trustee, as the case may be, at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Amended and Restated
Trust Agreement is located at 101 Barclay Street, 21W, New York, New York 10286.
"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 TAX EVENT" means a "Tax Event" as defined in the
Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, a New York
banking corporation organized under the laws of the State of New York and any
successor thereto, as trustee under the Indenture.
"DEBENTURES" means the $113,402,075 aggregate principal amount of
the Depositor's 7.875% Junior Subordinated Deferrable Interest Debentures,
Series A, 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 511(a)
and (b) Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.
"DELAWARE BANK" has the meaning specified in the preamble to this
Trust Agreement.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (ss.) 3801, ET SEQ., as it may be amended from time to
time.
"DELAWARE TRUSTEE" means the commercial bank or trust company
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.
"DEPOSITOR" has the meaning specified in the preamble to this
Trust Agreement.
"DISTRIBUTION DATE" has the meaning specified in Section 401(a).
"DISTRIBUTIONS" means amounts payable in respect of the Trust
Securities as provided in Section 401.
"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 of which or the breach of which is dealt with in clause (b)
or (c), above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 33% in
aggregate liquidation preference 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
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"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 901.
"EXTENSION PERIOD" has the meaning specified in Section 4.01 of
the First Supplemental Indenture.
"FIRST SUPPLEMENTAL INDENTURE" means the First Supplemental
Indenture dated as of May 1, 1997 between the Depositor and the Debenture
Trustee, as Trustee.
"GLOBAL DEBENTURE" has the meaning specified in the Indenture.
"GUARANTEE" means the Guarantee Agreement executed and delivered
by the Depositor and The Bank of New York, as trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"INDENTURE" means the Indenture, dated as of May 1, 1997, as
supplemented by the First Supplemental Indenture, between the Depositor and the
Debenture Trustee, as trustee, as amended or supplemented from time to time.
"INVESTMENT COMPANY EVENT" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
"investment company" that is required to be registered under the 1940 Act, which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.
"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 and 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 termination or liquidation 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 termination and
liquidation of the Trust pursuant to Section 904(a).
"LIQUIDATION DISTRIBUTION" has the meaning specified in Section
904(d).
"1940 ACT" means the Investment Company Act of 1940, as amended.
"OFFICER'S CERTIFICATE" means a certificate signed by the
President, a General Manager, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the appropriate Trustee. The officer signing an
Officer's Certificate given pursuant to Section 816 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the
Officer's Certificate;
(c) a statement that the 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 the 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, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
"ORIGINAL TRUST AGREEMENT" has the meaning specified in the
recitals to this Trust Agreement.
"OUTSTANDING", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, EXCEPT:
(a) Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Preferred 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 Preferred
Securities; PROVIDED that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(c) Preferred 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 504, 505, 511 and 513;
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 such Trustee 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
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 509 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
trust department 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 shall make payments to the Securityholders in accordance with Sections
401 and 402.
"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
that a Person is a Holder of Preferred Securities, substantially in the form
attached as Exhibit E.
"PROPERTY TRUSTEE" means the commercial bank or trust company
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 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
810.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the
respective meanings specified in Section 504.
"SECURITYHOLDER" or "HOLDER" means a Person in whose name a Trust
Security or Trust Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act. If such Person is the Clearing Agency or its nominee, this shall not
prevent the Owners from having an undivided beneficial interest in the assets of
the Trust.
"TAX EVENT" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under this Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges.
"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 all exhibits hereto, including,
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
amended, 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 Guarantee, (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 trusts 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, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement and
Pricing Agreement, each dated as of April 30, 1997, among the Trust, the
Depositor and the Underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 201. NAME.
The Trust created and continued hereby shall be known as "SWEPCO
Capital 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.
Section 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
c/o The Bank of New York (Delaware), 23 White Clay Center, Newark, Delaware
19711, Attention: Corporate Trust Administration, 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 Southwestern Electric Power Copmany, 428 Travis Street, Shreveport, Louisiana
71156-0001.
Section 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.
The Trustees acknowledge 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.
Section 204. ISSUANCE OF THE PREFERRED SECURITIES.
On April 30, 1997 the Depositor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver in accordance with the
Underwriting Agreement Preferred Securities Certificates, registered in the name
of the nominee of the initial Clearing Agency, in an aggregate amount of
4,400,000 Preferred Securities having an aggregate Liquidation Amount of
$110,000,000, against receipt of the aggregate purchase price of such Preferred
Securities of $110,000,000, which amount such Administrative Trustee shall
promptly deliver to the Property Trustee.
Section 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
136,083 Common Securities having an aggregate Liquidation Amount of $3,402,075
against payment by the Depositor of such amount. 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 Property Trustee on
behalf of the Trust and having an aggregate principal amount equal to
$113,402,075, 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 $113,402,075.
Section 206. 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 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.
Section 207. 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 and Article VIII,
and in accordance with the following provisions (i) and (ii), the
Administrative Trustees shall have the authority to enter into all
transactions and agreements determined by the Administrative Trustees to
be appropriate in exercising the authority, express or implied,
otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including
without limitation, the following:
(i) As among the Trustees, each Administrative Trustee,
acting singly or jointly, shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) 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 or documents as may
be necessary or desirable in connection with the purposes
and function of the Trust;
(C) assisting 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;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges 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;
(E) the sending of 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;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) 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 Holders of the Preferred
Securities or to enable the Trust to effect the purposes
for which the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative 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 power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and
any other payments made in respect of the Debentures in
the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default, the taking of 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 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);
(J) registering transfers of the Trust
Securities in accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 207(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 fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes, (iv) incur any indebtedness
for borrowed money or issue any other debt or (v) take or consent
to any action that would result in the placement of a Lien on any
of the Trust Property. 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.
(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 in furtherance of the following prior to the date of
this Trust Agreement are hereby ratified and confirmed in all
respects):
(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, among other securities, the Preferred
Securities and the Debentures, 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, the Debentures
and the Guarantee and to do any and all such acts, other
than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take
on behalf of the Trust, and prepare for execution and
filing 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) 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 other organizations for listing upon notice
of issuance of any Preferred Securities or Debentures, if
applicable, and to file or cause an Administrative
Trustee to file thereafter with such exchange or
organization such notifications and documents as may be
necessary from time to time;
(iv) 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 or Debentures,
if applicable, under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the
execution and delivery of, 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, will be classified as a
"grantor trust" and not as an association taxable as a
corporation 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, subject to Section 1002, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such
purposes.
Section 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
Section 209. 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 for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 301. 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 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 401. DISTRIBUTIONS.
(a) 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 May 8, 1997,
and, except during any Extension Period with respect to the Debentures, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on June 30, 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) with the same force and effect as if made on such date (each date on
which distributions are payable in accordance with this Section 401(a) a
"Distribution Date").
(b) The Trust Securities represent undivided beneficial interests
in the Trust Property, and, as a practical matter, the Distributions on the
Trust Securities shall be payable at a rate of 7.875% per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions payable
for any full 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 the number of days elapsed in a 360-day year of twelve
30-day months. During any Extension Period with respect to the Debentures,
Distributions on the Preferred Securities will be deferred for a period equal to
the Extension Period. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely 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
immediately available in the Payment Account for the payment of such
Distributions.
(d) 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 and, if the Preferred Securities
are in book-entry form and registered to the Clearing Agency or its nominee,
will be paid by the Clearing Agency or its nominee to the Owners thereof, on the
relevant record date, which shall be one Business Day prior to 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 date 15
days prior to the relevant Distribution Date.
Section 402. 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. The
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. 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 total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(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.
(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 immediately available 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 402(c), the Property Trustee will, so
long as the Preferred Securities are in book-entry-only form, deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and 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 402(c), will 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 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, and such
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 accrue, 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 on the relevant record date, which shall be one
Business Day prior to 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 date fifteen days prior to the relevant
Redemption Date.
(f) Subject to Section 403(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 on a PRO RATA basis 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 such method (including,
without limitation, by lot) 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 which has been or is to be redeemed.
Section 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Sums, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; 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 Sums, 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 Sums, 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 Sums,
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 a 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 shall have been cured, waived
or otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities shall have 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 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Sums, 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 between the
Property Trustee and the Common Securityholder.
Section 405. 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 required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee 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 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Sums, the
Property Trustee at the direction of an Administrative Trustee or Depositor
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.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 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 502. 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 Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual 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 504, 511
and 513.
Section 503. 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 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, General Manager, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
Section 504. 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 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as 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 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee 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
508, the Administrative Trustees or any one of them shall execute 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 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.
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 508.
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 the Property 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 the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.
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 505. 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 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 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent 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. Nothing in this provision shall be
construed to prevent the Owners from having an undivided beneficial interest in
the assets of the Trust.
Section 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall furnish
or cause to be furnished (a) to the Property Trustee, semi-annually on or before
January 15 and July 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 the most recent Record Date 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 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 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in The City of New
York, 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 principal corporate trust office of the Property Trustee, 101
Barclay Street, New York, NY 10286, as the principal corporate trust office for
such purposes. The Administrative Trustees shall give prompt written notice to
the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 509. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from
the Payment Account and if the Preferred Securities are held in book-entry form
and registered to the Clearing Agency or its nominee, the Clearing Agency or its
nominee will in turn make Distributions to the Owners thereof, and the Paying
Agent 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 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 Property Trustee, and any co-paying agent chosen by the
Property Trustee, 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 Property Trustee 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
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 801, 803 and 806 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than a
transfer in connection with a merger or consolidation of the Depositor into
another corporation or transfer of assets substantially as an entirety pursuant
to Section 10.01 of the Indenture) shall be void. The Administrative Trustees
shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 511. 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 or held on behalf of The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Book-Entry 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 beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 513. Unless and
until Definitive Preferred Securities Certificates have been issued to
beneficial owners pursuant to Section 513:
(i) the provisions of this Section 511(a) shall be in
full force and effect;
(ii) the Securities Registrar, the Paying Agent 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 Book-Entry
Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities and shall have no obligations to deal with the Owners
thereof;
(iii) to the extent that the provisions of this Section
511 conflict with any other provisions of this Trust Agreement,
the provisions of this Section 511 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 513, 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.
Any Clearing Agency designated pursuant hereto will not be deemed
an agent of the Trustees for any purpose.
(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 512. 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
513, 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 513. 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 Property Trustee in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of the Owners of Preferred Securities Certificates, then the Property
Trustee shall notify the Clearing Agency, 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 Property Trustee 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 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 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
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 514. 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
209, and the Securityholders and/or Owners shall not have any right or title
therein other than the rights 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. When issued and delivered to Holders of the Preferred Securities against
payment of the purchase price therefor, the Preferred Securities will be fully
paid and nonassessable interests in the Trust. 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.
(b) (i) 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 33% in principal amount of the outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 33% in Liquidation Amount
of the Preferred Securities then Outstanding shall have such right 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 and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.
(ii) The provisions of subsection (b)(i), however, are
subject to the condition that if, at any time after such 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 provided
in the Indenture, the Depositor shall pay or shall deposit with
the Debenture Trustee a sum sufficient to pay all amounts
required to be paid pursuant to Section 6.01(c) of the Indenture
with respect to a rescission and annulment of such a declaration
and any and all Events of Default with respect to the Debentures,
other than nonpayment of principal on Debentures which shall have
not have become due by their terms, shall have been remedied or
waived as provided in Section 6.06 of the Indenture, then the
Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Depositor and the Debenture
Trustee, may rescind and annul such declaration and its
consequences, but no such rescission and annulment shall extend
to or shall affect any subsequent default, or shall impair any
right consequent thereon.
(c) For so long as any Preferred Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails to proceed to
enforce any right available to the Holders of the Debentures for 60 days, the
Holders of at least 33% in Liquidation Amount of the Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of such rights.
(d) For so long as any Preferred Securities remain Outstanding,
to the fullest extent permitted by law, upon the occurrence of a Debenture Event
of Default specified in Section 6.01(a)(1) or 6.01(a)(2) of the Indenture, any
Holder of Preferred Securities shall have the right to institute a proceeding
directly against the Depositor for enforcement of payment to such Holder of the
principal of or interest on Debentures having a principal amount equal to the
Liquidation Amount of the Preferred Securities of such Holder after the due date
specified for such payment in the Debentures. Except as set forth in Section
514(b), (c) and (d), 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.
(e) The Depositor will be subrogated to the rights of the Holder
of the Preferred Securities to the extent of any payment made by the Depositor
to any such Holder of Preferred Securities pursuant to Section 514(c) or (d)
hereof.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 514, 810 and
1002 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,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Article Six 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 Outstanding 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 the Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the Outstanding Preferred Securities. The Property Trustee shall
notify each Holder of the Outstanding 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 the Trust will continue to be classified as a
"grantor trust" and not as an association taxable as a corporation for United
States federal income tax purposes on account of such action.
(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, winding-up or termination 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. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
cease to be classified as a "grantor trust" or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
Section 602. 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 1008 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 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
33% of the Preferred Securities (based upon their aggregate 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 the Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate 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 aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 604. 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 605. 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 taken. 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 606. 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 aggregate 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 (based upon their aggregate Liquidation
Amount).
Section 607. 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 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 6.08. 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
801) conclusive in favor of the Trustees, if made in the manner provided in this
Section.
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.
Whether a Person is a Holder of Preferred 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.
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 Guarantee
Trustee (as defined in the Guarantee), the Trust or any Person.
Section 609. 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.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each Successor Property Trustee at
the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
Successor Property Trustee in its separate corporate capacity) hereby represents
and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York;
(b) the Bank 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) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it 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;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Property Trustee and does not
require any approval of stockholders of the Bank and such execution, delivery
and performance will not (i) violate the Bank's charter or by-laws, (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 Bank 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 New York , as the case may be, governing the banking or trust
powers of the Bank or the Property Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein or therein 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 Bank
or the Property Trustee, as the case may be, under the laws of the United States
or the State of New York; and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the Bank or the
Property 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 to enter into or perform its obligations as
one of the Trustees under this Trust Agreement.
Section 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK
AND THE DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on
behalf of and as to itself, as of the date hereof, and each Successor Delaware
Trustee at the time of the Successor Delaware Trustee's acceptance of
appointment as Delaware Trustee hereunder (the term "Delaware Bank" being used
to refer to such Successor Delaware Trustee in its separate corporate capacity),
hereby represents and warrants (as applicable) for the benefit of the Depositor
and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(b) the Delaware Bank 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) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it 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;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Delaware Trustee and does not
require any approval of stockholders of the Delaware Bank and such execution,
delivery and performance will not (i) violate the Delaware Bank's charter or
by-laws, (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 Delaware Bank 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 Delaware Bank or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein 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
Delaware Bank or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the Delaware Bank
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 Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 703. 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 Administrative 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 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 Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 801. 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, no provision of this
Trust Agreement shall require the Trustees to expend or risk 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 their rights or powers, if 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.
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 Administrative 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 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 801(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) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) 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;
(ii) 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;
(iii) 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;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree 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 301 and except to the extent
otherwise required by law; and
(v) 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
negligence, default or misconduct of the Administrative Trustees
or the Depositor.
Section 802. CERTAIN NOTICES.
(a) Within 15 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, 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. For
purposes of this Section the term "Event of Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in Section 1008, notice
of the Depositor's election to begin or further extend an Extension Period on
the Debentures (unless such election shall have been revoked) within the time
specified for transmitting such notice to the holders of the Debentures pursuant
to the Indenture.
Section 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(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
or (ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with 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 Officer's 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 Officer's
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 filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its Affiliates) 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, such counsel
may be counsel to the Depositor or any of its Affiliates, and may include any of
its employees; 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;
(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 recklessness with respect to 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 of the Trust Securities
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; and
(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.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property 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 the Property 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 Property Trustee shall be
construed to be a duty.
Section 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
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 805. 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 808 and 813 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 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to such
Trustee's negligence, bad faith or willful misconduct (or, in the case
of the Administrative Trustees, any such expense, disbursement or
advance as may be attributable to his or her gross negligence, bad faith
or willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any loss, damage,
claims, liability, penalty or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance
or administration of this Trust 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.
No Trustee may claim any lien or charge on any Trust Property as
a result of any amount due pursuant to this Section 806.
Section 807. 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 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, 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
that shall act through one or more persons authorized to bind such entity.
Section 808. CONFLICTING INTERESTS.
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.
Section 809. 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 shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor shall for
such purpose join with the Property Trustee in the execution, delivery and
performance of all 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 and delivered 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 Trustees specified
hereunder, shall be exercised, solely by such Trustees 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
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section 809.
(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 810. 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 811.
Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of acceptance
by the successor Trustee required by Section 811 shall not have been delivered
to the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Depositor,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee with respect to the Trust Securities.
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 on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
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 Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. 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 is 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 with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. 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 an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, 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 with
respect to the Trust Securities.
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 1008 and shall give notice to
the Depositor. 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, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of 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 Administrative Trustees set forth in Section 807).
Section 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, 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 trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee 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 with respect to the Trust Securities and the
Trust; 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 such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may be.
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 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee
or any Administrative 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
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided 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 813. 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 814. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than November 1 of each year commencing with
November 1, 1997 the Property Trustee shall transmit to all Securityholders in
accordance with Section 1008, and to the Depositor, a brief report dated as of
such September 1 with respect to:
(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be eligible
under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report and any
action taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
securities exchange or other organization upon which the Trust Securities are
listed, with the Commission and with the Depositor.
Section 815. 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 Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 816. 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
Officer's Certificate.
Section 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, 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 817(a), or
if the number of Trustees is increased pursuant to Section 817(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul 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 810, 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 818. 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 207(a); 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 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 the Trust, as set forth herein.
Section 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent
or approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically
terminate on April 30, 2042 (the "Expiration Date") subject to distribution of
the Trust Property in accordance with Section 904.
Section 902. 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 Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to terminate the Trust and distribute the
Debentures to Securityholders in exchange for the Preferred Securities
in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
Section 903. 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 upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (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.
Section 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b),
or (d) of Section 902 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder or if the Preferred
Securities are held in book-entry form, to each Owner through the Clearing
Agency or its nominee, a Like Amount of Debentures, subject to Section 904(d).
Notice of liquidation shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not later 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 notices of liquidation 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 904(d) applies receive
a Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to
effect the liquidation 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 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) 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 reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other securities
exchange or other organization as the Preferred Securities are then listed or
traded, (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.
(d) In the event that, notwithstanding the other provisions of
this Section 904, 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, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders or if the
Preferred Securities are held in book-entry form, Owners through the Clearing
Agency or its nominee, 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 accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or termination, 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, winding-up or
termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
Section 905. 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 Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, 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 (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities) so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
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, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (b) 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 (viii) the Depositor 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 Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other than a
"grantor trust" for United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity 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 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 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to acceptance of
appointment by a successor Trustee, (ii) 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 this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement, or (iii) 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 be classified for United States federal
income tax purposes as 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; PROVIDED, HOWEVER, that in the case
of clause (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 601(c) or Section 1002(c)
hereof, any provision of this Trust Agreement may be amended by the
Administrative Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) upon 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" 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 603 or 606 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 603 or 606 hereof), this
paragraph (c) of this Section 1002 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 to fail or cease to be
classified as 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, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
(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 Officer's
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
Section 1003. 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 1004. 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 SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
Section 1005. 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 which is a Business Day (except
as otherwise provided in Sections 401(a) and 402(d)), with the same force and
effect as though made on the date fixed for such payment, and no distribution
shall accumulate thereon for the period after such date.
Section 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant 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 Ten 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 1007. HEADINGS.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
Section 1008. 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 Southwestern
Electric Power Company, c/o Central and South West Corporation, 1616 Woodall
Rodgers Freeway, Dallas, Texas 75202, Attention: Director, Finance, facsimile
no: (214) 777-1223. Any notice to Preferred Securityholders shall also be given
to such owners as have, within two years preceding the giving of such notice,
filed their names and addresses with the Property Trustee for that purpose. 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.
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 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 The Bank of New York, 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust Trustee
Administration; (b) with respect to the Delaware Trustee, to 23 White Clay
Center, Newark, New Castle County, Delaware 19711, Attention: Corporate Trust
Trustee Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of SWEPCO Capital I." 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 1009. 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 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), 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. The
provisions of this Section 1009 shall survive the termination of this Trust
Agreement.
Section 1010. 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 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 to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
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 to be 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 Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 1011. 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 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.
Section 1012. COUNTERPARTS.
This Trust Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all counterparts shall together constitute but one and the same instrument.
SOUTHWESTERN ELECTRIC POWER COMPANY
By: _________________________________________
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK
as Property Trustee
By: _________________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By: _________________________________________
Name:
Title:
Wendy G. Hargus, as Administrative Trustee
R. Russell Davis, as Administrative Trustee
EXHIBIT A
CERTIFICATE OF TRUST
OF
SWEPCO CAPITAL I
THIS CERTIFICATE OF TRUST of SWEPCO Capital I (the "Trust"),
dated ________ __, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
SWEPCO Capital 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), 23 White Clay Center, Newark, New Castle County,
Delaware 19711.
3. Counterparts. This Certificate of Trust may be executed in
one or more counterparts, all of which together constitute one and the same
instrument.
4. Effective Date. This Certificate of Trust shall be effective
as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK,
as Trustee
By _____________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Trustee
BY
Name:
Title:
Wendy G. Hargus, not in her individual
capacity, but solely as Administrative
Trustee
EXHIBIT B
________, 1997
The Depository Trust Company, 55 Water Street, 49th Floor, New York, New York
10041-0099.
Attention:[ ]
General Counsel's Office
Re: SWEPCO Capital I Trust
PREFERRED SECURITIES, SERIES A
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
("DEPOSITORY TRUST COMPANY") of SWEPCO Capital I [ ]% Trust Preferred
Securities, Series A (the "Preferred Securities"), of SWEPCO Capital I, a
Delaware business trust (the "Issuer"), created pursuant to a Trust Agreement
between Southwestern Electric Power Company, a Delaware corporation ("SWEPCO"),
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
Issuer or redemption of the Preferred Securities, to the extent the Issuer has
funds available for the payment thereof, are guaranteed by SWEPCO to the extent
set forth in a Guarantee Agreement dated [ ], 1997 by SWEPCO with respect to the
Preferred Securities. SWEPCO and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated [ ], 1997 by and among the Underwriters, the Issuer
and SWEPCO, and the Underwriters wish to take delivery of the Preferred
Securities through DEPOSITORY TRUST COMPANY. The Bank of New York acting as
transfer agent and registrar with respect to the Preferred Securities (the
"Transfer Agent and Registrar").
To induce DEPOSITORY TRUST COMPANY to accept the Preferred
Securities as eligible for deposit at DEPOSITORY TRUST COMPANY, and to act in
accordance with DEPOSITORY TRUST COMPANY's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DEPOSITORY TRUST
COMPANY 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 [ ], 1997, there
shall be deposited with DEPOSITORY TRUST COMPANY one or more global certificates
(individually and collectively, the "Global Certificate") registered in the name
of DEPOSITORY TRUST COMPANY's Preferred Securities nominee, Cede & Co.,
representing an aggregate of [ ] Preferred Securities and bearing the following
legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DEPOSITORY TRUST COMPANY"), 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 DEPOSITORY TRUST COMPANY (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DEPOSITORY TRUST COMPANY), 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.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders of the Preferred Securities under certain
limited circumstances. The Issuer shall establish a record date for such
purposes and shall, to the extent possible, give DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY
TRUST COMPANY 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 DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST
COMPANY's Dividend Department of such payment 5 business days prior to payment
date. The notices provided for in this paragraph shall be sent as described in
Section 9.
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 DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as
described in paragraph 4. Notices to DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST
COMPANY'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:
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 DEPOSITORY TRUST
COMPANY 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 "SWEPCO Capital I [ ]% Trust Preferred Securities,
Series A."
8. The Issuer or the Transfer Agent and Registrar shall provide
automated notification of CUSIP-level detail for Distribution payments to
DEPOSITORY TRUST COMPANY no later than noon (Eastern Time) on the payment date.
9. Distribution payments shall be received by Cede & Co. as
nominee of DEPOSITORY TRUST COMPANY, or its registered assigns, in same-day
funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment
date. Absent any other arrangements between the Issuer and DEPOSITORY TRUST
COMPANY, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
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
DEPOSITORY TRUST COMPANY. 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 DEPOSITORY TRUST COMPANY in advance of the Distribution
payment date as soon as the information is available. This information should be
conveyed directly to DEPOSITORY TRUST COMPANY electronically. If electronic
transmission is not available, such information should be sent by telecopy to
DEPOSITORY TRUST COMPANY'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 DEPOSITORY TRUST COMPANY 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
10. DEPOSITORY TRUST COMPANY shall receive maturity and
redemption payments and CUSIP-level detail 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 DEPOSITORY TRUST COMPANY, such payments shall be wired
as follows:
The Chase Manhattan Bank
ABA 021000128
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
DEPOSITORY TRUST COMPANY's SDFS PAYING AGENT OPERATING PROCEDURES, a copy of
which has previously been furnished to the Transfer Agent and Registrar.
11. DEPOSITORY TRUST COMPANY shall receive all reorganization
payments and CUSIP-level detail resulting from corporation actions (such as
tender offers 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 DEPOSITORY TRUST COMPANY, such payments shall be wired as
follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DEPOSITORY TRUST COMPANY may by prior written notice direct
the Issuer and the Transfer Agent and Registrar to use any other telecopy number
or address of DEPOSITORY TRUST COMPANY as the number or address to which notices
or payments may be sent.
13. 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, DEPOSITORY TRUST COMPANY, 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.
14. DEPOSITORY TRUST COMPANY may discontinue its services as a
securities depositary with respect to the Preferred Securities at any time by
giving at least 90 days' prior written notice to the Issuer and the Transfer
Agent and Registrar (at which time DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY account, or issue definitive Preferred Securities
to the beneficial holders thereof, and in any such case, DEPOSITORY TRUST
COMPANY 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. 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
DEPOSITORY TRUST COMPANY 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 DEPOSITORY TRUST COMPANY and
others, and DEPOSITORY TRUST COMPANY 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.
16. The Issuer: (a) understands that DEPOSITORY TRUST COMPANY 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 DEPOSITORY
TRUST COMPANY'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
DEPOSITORY TRUST COMPANY.
17. 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 SWEPCO Capital I.
Very truly yours,
SWEPCO CAPITAL I
(As Issuer)
By
Name: [ ]
Title: Administrative Trustee
THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE
(As Transfer Agent and Registrar)
By:
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By
Authorized Officer
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
SWEPCO Capital I
[ ]% Common Securities
(liquidation amount $25 per Common Security)
SWEPCO Capital I, a statutory business trust created under the
laws of the State of Delaware (the "Trust") hereby certifies that Southwestern
Electric Power Company (the "Holder") is the registered owner of
______________________________________ (_______________) common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
and designated the [ ]% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 510 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 [ ], 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.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this eighth day of May, 1997.
SWEPCO CAPITAL I
By:
Name: Wendy G. Hargus
Administrative Trustee
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of [ ], 1997, between Southwestern Electric
Power Company, a Delaware corporation ("SWEPCO"), and SWEPCO Capital I, a
Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to, and receive Debentures (as defined in the Trust
Agreement) from, SWEPCO and to issue and sell [ ]% 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 [ ], 1997 as the same may be amended from
time to time (the "Trust Agreement");
WHEREAS, SWEPCO will directly or indirectly own all of the Common
Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder
of the Preferred Securities, which purchase SWEPCO hereby agrees shall benefit
SWEPCO and which purchase SWEPCO acknowledges will be made in reliance upon the
execution and delivery of this Agreement, SWEPCO, including in its capacity as
holder of the Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY SWEPCO.
Subject to the terms and conditions hereof, SWEPCO, including in
its capacity as 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 (as hereinafter defined) 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. 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.
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 the date hereof by SWEPCO 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.
SWEPCO hereby waives notice of acceptance of this Agreement and
of any Obligation to which it applies or may apply, and SWEPCO 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 SWEPCO 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, SWEPCO with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against SWEPCO
and SWEPCO waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against
SWEPCO.
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 SWEPCO
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):
SWEPCO Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Southwestern Electric Power Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above
written.
SOUTHWESTERN ELECTRIC POWER COMPANY
By:
Name: [ ]
Title: Treasurer
SWEPCO CAPITAL I
By:
Name: [ ]
Title: Administrative Trustee
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 (as defined below) 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
SWEPCO Capital 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-
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
SWEPCO Capital I
[ ]% Trust Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
SWEPCO Capital 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 SWEPCO Capital I [ ]% Trust Preferred Securities, Series A
(liquidation preference $25 per Preferred Security) (the "Preferred
Securities"). 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
504 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 [ ], 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 Southwestern Electric Power Company, a
Delaware corporation, and The Bank of New York, as guarantee trustee, dated as
of [ ], 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 eighth day of May, 1997.
SWEPCO CAPITAL I
By:
Name: Wendy G. Hargus
Title: Administrative Trustee
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 Securities 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
Securities Certificate)
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCK BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
SEC RULE 17Ad-15.
GUARANTEE AGREEMENT
Between
SOUTHWESTERN ELECTRIC POWER COMPANY
(as Guarantor)
and
The Bank of New York
(as Guarantee Trustee)
dated as of
May 1, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 101. Definitions...................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application..............................5
SECTION 202. List of Holders...............................................5
SECTION 203. Reports by the Guarantee Trustee..............................5
SECTION 204. Periodic Reports to Guarantee Trustee.........................5
SECTION 205. Evidence of Compliance with Conditions Precedent..............6
SECTION 206. Events of Default; Waiver.....................................6
SECTION 207. Event of Default; Notice......................................6
SECTION 208. Conflicting Interests.........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee....................7
SECTION 302. Certain Rights of Guarantee Trustee...........................8
SECTION 303. Indemnity....................................................10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility...............................10
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee............................................11
ARTICLE V
GUARANTEE
SECTION 501. Guarantee....................................................11
SECTION 502. Waiver of Notice and Demand..................................12
SECTION 503. Obligations Not Affected.....................................12
SECTION 504. Rights of Holders............................................13
SECTION 505. Guarantee of Payment.........................................13
SECTION 506. Subrogation..................................................13
SECTION 507. Independent Obligations......................................13
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination................................................14
SECTION 602. Pari Passu Guarantees........................................14
ARTICLE VII
TERMINATION
SECTION 701. Termination..................................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns.......................................14
SECTION 802. Amendments...................................................15
SECTION 803. Notices......................................................15
SECTION 804. Benefit......................................................16
SECTION 805. Interpretation...............................................16
SECTION 806. Governing Law................................................17
<PAGE>
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a).......................................................... 401(a)
310(b).......................................................... 401(c), 208
310(c).......................................................... Inapplicable
311(a).......................................................... 202(b)
311(b).......................................................... 202(b)
311(c).......................................................... Inapplicable
312(a).......................................................... 202(a)
312(b).......................................................... 202(b)
313............................................................. 203
314(a).......................................................... 204
314(b).......................................................... Inapplicable
314(c).......................................................... 205
314(d).......................................................... Inapplicable
314(e).......................................................... 101, 205, 302
314(f).......................................................... 201, 302
315(a).......................................................... 301(d)
315(b).......................................................... 207
315(c).......................................................... 301
315(d).......................................................... 301(d)
316(a).......................................................... 101, 206, 504
316(b).......................................................... 503
316(c).......................................................... 802
317(a).......................................................... Inapplicable
317(b).......................................................... Inapplicable
318(a).......................................................... 201(b)
318(b).......................................................... 201
318(c).......................................................... 201(b)
* 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.
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of May 1, 1997, is executed
and delivered by Southwestern Electric Power Company, a Delaware corporation
(the "Guarantor"), and The Bank of New York, a New York banking corporation
organized under the laws of the State of New York, as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of SWEPCO Capital I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of May 1, 1997 among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing 4,400,000 of its 7.875% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per preferred security) (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred 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 Preferred 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 Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 101. 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 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, provided, however, that an Affiliate
of the Guarantor shall not be deemed to include the Issuer. 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.
"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
for 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of
its payment 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 Preferred 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 Preferred 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 the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
the date of redemption, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accumulated and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, 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 Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
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.
"Indenture" means the Indenture dated as of May 1, 1997
relating to Junior Subordinated Debentures of the Guarantor, as supplemented and
amended between the Guarantor and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 202(a).
"Majority in liquidation preference of the Preferred
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
preference of all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, President, General Manager, the Treasurer,
an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the
Officer's Certificate;
(c) a statement that 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 such 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 Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers 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.
"Senior Indebtedness" means the principal of, and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Guarantee or thereafter
incurred, created or assumed: (a) all indebtedness of the Guarantor evidenced by
notes, debentures, bonds or other securities sold by the Guarantor for money,
(b) all indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Guarantor or in effect
guaranteed by the Guarantor through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Guarantor, in
accordance with generally accepted accounting principles as in effect from time
to time, unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is pari passu with this Guarantee. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article VI of this
Guarantee irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
401.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. 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 202. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15
and July 15 of each year, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) 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 Holders as of a date not more than
15 days prior to the time such list is furnished, in each case
to the extent such information is in the possession or control
of the Guarantor and is not identical to a previously supplied
list of Holders or has not otherwise been received by the
Guarantee Trustee in its capacity as such. The Guarantee
Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(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 203. Reports by the Guarantee Trustee.
Not later than November 1 of each year, commencing November 1,
1997, 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 204. Periodic Reports to 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 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.
SECTION 205. 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
Officer's Certificate.
SECTION 206. Events of Default: Waiver.
The Holders of a Majority in liquidation preference of the
Preferred 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 thereon.
SECTION 207. Event 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 known to 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 the
Board of Directors, the executive committee or a trust
committee of directors and/or 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 the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
SECTION 208. 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.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. 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 504(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 206), 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 failure to
act or 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
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 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
preference of the Preferred 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 302. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 301:
(i) The Guarantee Trustee may 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
Officer's 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 upon
an Officer's 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 choice, and the written 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 302(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 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 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 303. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense 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.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. 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 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 401(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 402(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 Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee.
(a) Subject to Section 402(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(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 402 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.
ARTICLE V
GUARANTEE
SECTION 501. 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 set-off 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 502. 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, 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 503. 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 Preferred 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 so provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
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 Preferred
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, 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
Preferred 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 503 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 504. 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 a Majority in
liquidation preference of the Preferred 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 Guarantee Trustee, the Issuer
or any other Person.
SECTION 505. 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 distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 506. 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 501; 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 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 507. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
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 503 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Guarantor.
SECTION 602. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any
similar Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by SWEPCO Capital I.
ARTICLE VII
TERMINATION
SECTION 701. Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred 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 Preferred Securities or
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 801. 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 Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 802. 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 only be
amended with the prior approval of the Holders of not less than a Majority in
liquidation preference of the Preferred Securities. The provisions of Article VI
of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval.
SECTION 803. 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 addressas the Guarantor may give notice of to the
Holders:
Southwestern Electric and Power Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
(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:
SWEPCO Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
with a copy to:
The Bank of New York
101 Barclay Street
21 West
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(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 804. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Preferred Securities.
SECTION 805. 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 101;
(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 genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 806. 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 CONFLICT OF LAW PRINCIPLES THEREOF.
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.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SOUTHWESTERN ELECTRIC POWER COMPANY
By:
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK, as Guarantee Trustee
By:
Name:
Title:
THE BANK OF NEW YORK, as Guarantee Trustee
By:
Name:
Title:
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of May 1, 1997, between Southwestern
Electric Power Company, a Delaware corporation ("SWEPCO"), and SWEPCO Capital I,
a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to, and receive Debentures (as defined in the Trust
Agreement) from, SWEPCO and to issue and sell 7.875% 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 May 1, 1997 as the same may be amended from
time to time (the "Trust Agreement");
WHEREAS, SWEPCO will directly or indirectly own all of the
Common Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each
holder of the Preferred Securities, which purchase SWEPCO hereby agrees shall
benefit SWEPCO and which purchase SWEPCO acknowledges will be made in reliance
upon the execution and delivery of this Agreement, SWEPCO, including in its
capacity as holder of the Common Securities, and the Trust hereby agree as
follows:
ARTICLE I
Section 1.1. Guarantee by SWEPCO.
Subject to the terms and conditions hereof, SWEPCO, including
in its capacity as 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 (as hereinafter defined) 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. 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.
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 the date hereof by SWEPCO 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.
SWEPCO hereby waives notice of acceptance of this Agreement
and of any Obligation to which it applies or may apply, and SWEPCO 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 SWEPCO
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, SWEPCO with respect to the happening of any of the foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against
SWEPCO and SWEPCO waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against SWEPCO.
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
SWEPCO 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):
SWEPCO Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Southwestern Electric Power Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of New York (without
regard to conflict of laws principles).
<PAGE>
THIS AGREEMENT is executed as of the day and year first above
written.
SOUTHWESTERN ELECTRIC POWER COMPANY
By:
Name: Wendy G. Hargus
Title: Treasurer
SWEPCO CAPITAL I
By:
Name: Wendy G. Hargus
Title: Administrative Trustee
EXHIBIT 12.1
CENTRAL POWER AND LIGHT COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTHS ENDED MARCH 31, 1997
(Thousands Except Ratio)
(Unaudited)
Operating Income $267,725
Adjustments:
Income taxes 38,214
Provision for deferred income taxes 47,498
Deferred investment tax credits (5,553)
Utility plant development costs, net of tax (16,908)
Other income and deductions 3,302
Allowance for borrowed and equity funds
used during construction 2,145
--------
Earnings $336,423
========
Fixed Charges:
Interest on long-term debt $110,081
Interest on short-term debt and other 18,959
--------
Fixed Charges $129,040
========
Ratio of Earnings to Fixed Charges 2.61
========
EXHIBIT 12.2
PUBLIC SERVICE COMPANY OF OKLAHOMA (CONSOLIDATED)
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTHS ENDED MARCH 31, 1997
(Thousands Except Ratio)
(Unaudited)
Operating Income $104,410
Adjustments:
Income taxes 31,677
Provision for deferred income taxes (6,875)
Deferred investment tax credits (2,784)
Utility plant development costs, net of tax (35,783)
Other income and deductions (514)
Allowance for borrowed and equity funds
used during construction 1,930
-------
Earnings $ 92,061
=======
Fixed Charges:
Interest on long-term debt $ 30,735
Amortization of debt issuance cost 1,722
Other interest 3,823
-------
Fixed Charges $ 36,280
=======
Ratio of Earnings to Fixed Charges 2.54
=======
EXHIBIT 12.3
SOUTHWESTERN ELECTRIC POWER COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTHS ENDED MARCH 31, 1997
(Thousands except Ratio)
(Unaudited)
Operating Income $137,808
Adjustments:
Income taxes 41,304
Provision for deferred income taxes (4,063)
Deferred investment tax credits (4,712)
Utility plant development costs, net of tax (22,298)
Other income and deductions (264)
Allowance for borrowed and equity funds
used during construction 1,743
Interest portion of financing leases 1,391
-------
Earnings $150,909
=======
Fixed Charges:
Interest on long-term debt $ 43,609
Amortization of debt issuance cost 3,457
Other interest 4,612
Interest portion of financing leases 1,391
-------
Fixed Charges $ 53,069
=======
Ratio of Earnings to Fixed Charges 2.84
=======
EXHIBIT 12.4
WEST TEXAS UTILITIES COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTHS ENDED MARCH 31, 1997
(Thousands Except Ratio)
(Unaudited)
Operating Income $51,864
Adjustments:
Income taxes 6,690
Provision for deferred income taxes 5,898
Deferred investment tax credits (1,321)
Utility plant development costs, net of tax (11,003)
Other income and deductions 459
Allowance for borrowed and equity funds
used during construction 1,181
------
Earnings $53,768
======
Fixed Charges:
Interest on long-term debt $20,962
Interest on short-term debt and other 4,862
------
Fixed Charges $25,824
======
Ratio of Earnings to Fixed Charges 2.08
======
EXHIBIT 18.1
LETTER RE: CHANGE IN ACCOUNTING PRINCIPLE
Re: Central and South West Corporation (CSW)
Form 10-Q Report for the quarter ended March 31, 1997
Ladies and Gentlemen:
This letter is written to meet the requirements of Regulation S-K
calling for a letter from a registrant's independent accountants whenever there
has been a change in accounting principle or practice.
As stated in Note 1 in the Notes to Financial Statements of this Form
10-Q, effective January 1, 1997, Central Power and Light Company (CPL), a CSW
subsidiary, began utilizing the Last-In First-Out (LIFO) method for valuation of
its coal inventory. Prior to January 1, 1997, CPL utilized the weighted average
costs method. The change was made to be consistent with the fossil fuel
inventory valuation method used by CSW's other Texas utility subsidiary, West
Texas Utilities Company (WTU). In addition, effective January 1, 1997, WTU began
utilizing the LIFO method of inventory valuation for all of its fossil fuel
inventory. Prior to January 1, 1997, WTU utilized a LIFO method for coal and a
weighted average costs method for fossil fuel inventories other than coal. The
change was made to be consistent with its coal inventory valuation method.
Neither of these changes in accounting had an effect of the results of
operations due to the regulatory treatment of such costs.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting profession.
Thus, we cannot make an objective determination of whether the change in
accounting described in the preceding paragraph is to a preferable method.
However, we have reviewed the pertinent factors, including those related to
financial reporting, in this particular case on a subjective basis, and our
opinion stated below is based on our determination made in this manner.
We are of the opinion that the Corporation's change in method of
accounting is to an acceptable alternative method of accounting, which, based
upon the reasons stated for the change and our discussions with management, is
also preferable under the circumstances in this particular case. In arriving at
this opinion, we have relied on the business judgment and business planning of
your management. We have not made an audit in accordance with generally accepted
auditing standards of the financial statements of the three month period ended
March 31, 1997 or 1996 and, accordingly, we express no opinion thereon or on the
financial information filed as part of the Form 10-Q of which this letter is to
be an exhibit.
Very truly yours,
ARTHUR ANDERSEN LLP
EXHIBIT 18.2
LETTER RE: CHANGE IN ACCOUNTING PRINCIPLE
Re: Central and South West Corporation (CSW)
Central Power and Light Company (CPL)
Form 10-Q Report for the quarter ended March 31, 1997
Ladies and Gentlemen:
This letter is written to meet the requirements of Regulation S-K
calling for a letter from a registrant's independent accountants whenever there
has been a change in accounting principle or practice.
As stated in Note 1 in the Notes to Financial Statements of this Form
10-Q, effective January 1, 1997, CPL began utilizing the Last-In First-Out
(LIFO) method for valuation of its coal inventory. Prior to January 1, 1997, CPL
utilized the weighted average costs method. The change was made to be consistent
with the fossil fuel inventory valuation method used by CSW's other Texas
utility subsidiary (West Texas Utilities Company). The change in accounting did
not affect results of operations due to the regulatory treatment of such costs.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting profession.
Thus, we cannot make an objective determination of whether the change in
accounting described in the preceding paragraph is to a preferable method.
However, we have reviewed the pertinent factors, including those related to
financial reporting, in this particular case on a subjective basis, and our
opinion stated below is based on our determination made in this manner.
We are of the opinion that the Corporation's change in method of
accounting is to an acceptable alternative method of accounting, which, based
upon the reasons stated for the change and our discussions with management, is
also preferable under the circumstances in this particular case. In arriving at
this opinion, we have relied on the business judgment and business planning of
your management. We have not made an audit in accordance with generally accepted
auditing standards of the financial statements of the three month period ended
March 31, 1997 or 1996 and, accordingly, we express no opinion thereon or on the
financial information filed as part of the Form 10-Q of which this letter is to
be an exhibit.
Very truly yours,
ARTHUR ANDERSEN LLP
EXHIBIT 18.3
LETTER RE: CHANGE IN ACCOUNTING PRINCIPLE
Re: Central and South West Corporation (CSW)
West Texas Utilities Company (WTU)
Form 10-Q Report for the quarter ended March 31, 1997
Ladies and Gentlemen:
This letter is written to meet the requirements of Regulation S-K
calling for a letter from a registrant's independent accountants whenever there
has been a change in accounting principle or practice.
As stated in Note 1 in the Notes to Financial Statements of this Form
10-Q, effective January 1, 1997, WTU began utilizing the Last-In First-Out
(LIFO) method for valuation of its fossil fuel inventory. Prior to
January 1, 1997, WTU utilized a LIFO method for coal and a weighted average
costs method for fossil fuel inventories other than coal. The change was made to
be consistent with its coal inventory valuation method. The change in accounting
did not affect results of operations due to the regulatory treatment of such
costs.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting profession.
Thus, we cannot make an objective determination of whether the change in
accounting described in the preceding paragraph is to a preferable method.
However, we have reviewed the pertinent factors, including those related to
financial reporting, in this particular case on a subjective basis, and our
opinion stated below is based on our determination made in this manner.
We are of the opinion that the Corporation's change in method of
accounting is to an acceptable alternative method of accounting, which, based
upon the reasons stated for the change and our discussions with management, is
also preferable under the circumstances in this particular case. In arriving at
this opinion, we have relied on the business judgment and business planning of
your management. We have not made an audit in accordance with generally accepted
auditing standards of the financial statements of the three month period ended
March 31, 1997 or 1996 and, accordingly, we express no opinion thereon or on the
financial information filed as part of the Form 10-Q of which this letter is to
be an exhibit.
Very truly yours,
ARTHUR ANDERSEN LLP
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