As filed with the Securities and Exchange Commission on December 16, 1996
Registration No. __________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________________
ENTERGY GULF STATES, INC. ENTERGY GULF STATES CAPITAL I
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in Trust Agreement)
Texas Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
74-0662730 To be Applied for
(I.R.S. Employer Identification (I.R.S. Employer Identification
Number) Number)
350 Pine Street c/o Entergy Gulf States, Inc.
Beaumont, Texas 77701 639 Loyola Avenue
(409) 838-6631 New Orleans, Louisiana 70113
(Address, including zip code, 504-576-4308
and telephone number, including (Address, including zip code,
area code, of registrant's and telephone number, including
principal executive offices) area code, of registrant's
principal executive office)
_________
_________
_________
LAURENCE M. HAMRIC, Esq. WILLIAM J. REGAN, JR.
DENISE C. REDMANN, Esq. Vice President and Treasurer
Entergy Services, Inc. Entergy Gulf States, Inc.
639 Loyola Avenue 639 Loyola Avenue
New Orleans, Louisiana 70113 New Orleans, Louisiana 70113
504-576-2272 504-576-4308
KEVIN STACEY, Esq.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
212-603-2144
(Names, addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
__________________
<PAGE>
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of the
Registration Statement.
___________________
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, check the following box.
[ ]
If the registrant elects to deliver its latest annual report
to security holders, or a complete and legible facsimile thereof,
pursuant to Item 11(a)(1) of this Form, check the following box.
[ ]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
===========================================================================
Proposed Proposed
Title of each maximum maximum
class of offering aggregate Amount of
securities being Amount to be price per offering registration
registered registered unit (1)(2) price (1)(2) fee(1)
- --------------------------------------------------------------------------
Entergy Gulf
States, Inc.
Junior
Subordinated
Deferrable
Interest
Debentures.......
- --------------------------------------------------------------------------
Entergy Gulf States
Capital I
Preferred
Securities.......
- --------------------------------------------------------------------------
Entergy Gulf
States, Inc.
Guarantee with
respect to Entergy
Gulf States
Capital 1
Preferred
Securities and
Entergy Gulf
States, Inc.
obligations with
respect to such
Preferred
Securities under
an Indenture,
Amended and
Restated Trust
Agreement and
Expense
Agreement(3).....
- ------------------------------------------------------------------------
Total............. $85,000,000 100% $85,000,000 $25,758
========================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the
Preferred Securities of the Trust and the Junior Subordinated Deferrable
Interest Debentures of the Company registered hereby will not exceed
$85,000,000.
(2) Exclusive of accrued interest and dividend, if any.
(3) Includes the rights of the holders of the Trust's Preferred
Securities under the Guarantee and certain back-up undertakings,
comprised of the obligations of the Company to provide certain
indemnities in respect of, and pay and be responsible for certain costs,
expenses, debts and liabilities of, the Trust and such obligations as set
forth in the Expense Agreement and the Indenture, in each case as further
described in the Registration Statement. The Guarantee, when taken
together with the Company's obligations under the Junior Subordinated
Deferrable Interest Debentures, the Indenture, the Amended and Restated
Declaration of Trust of the Trust and the Expense Agreement, will
effectively provide a full and unconditional guarantee, on a subordinated
basis, by the Company of payments due on the Trust's Preferred
Securities. No separate consideration will be received for the Guarantee
or such back-up obligations..
_______________________________
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
CROSS-REFERENCE SHEET
Item and Caption in Form S-2 Caption in Prospectus
------------------------------- ------------------------
1. Forepart of the Registration
Statement and Outside Front
Cover of Prospectus . . . . Outside Front Cover Page
2. Inside Front and Outside
Back Cover Pages of Inside Front Cover Page;
Prospectus . . . . . . . . Back Cover Page
3. Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges . . . . . Risk Factors; Ration of
Earnings to Fixed
Charges; Selected
Financial Data
4. Use of Proceeds . . . . . . Use of Proceeds
5. Determination of Offering
Price . . .. . . . . . . . . Not Applicable
6. Dilution . . . . . . . . . . Not Applicable
7. Selling Security Holders . . Not Applicable
8. Plan of Distribution . . . . Underwriting
9. Description of Securities to
be Registered. . . .. . . . Description of the
Preferred Securities;
Description of the
Guarantee; Description of
the Junior Subordinated
Debentures; Relationship
Among the Preferred
Securities, the Junior
Subordinated Debentures
and the Guarantee
10. Interest of Named Experts
and Counsel . . . . . . . . Experts; Legal Opinions
11. Information With Respect to
the Registrant . . . . . . Risk Factors; The
Company; Selected
Financial Data;
Capitalization;
Management's Discussion
and Analysis; Financial
Statements; Interim
Financial Statements
12. Incorporation of Certain
Information by Reference . . Incorporation of Certain
Information by Reference
13. Disclosure of Commission
Position on Indemnification For
Securities Act Liabilities . Not Applicable
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 16, 1996
3,400,000 Preferred Securities
ENTERGY GULF STATES CAPITAL I
___% Cumulative Quarterly Income Preferred Securities, Series A
(QUIPSsm)*
(liquidation preference $25 per preferred security)
fully and unconditionally guaranteed, as set forth herein, by
ENTERGY GULF STATES, INC.
________________
The ___% Cumulative Quarterly Income Preferred Securities,
Series A (the "Preferred Securities"), offered hereby represent
undivided beneficial interests in the assets of Entergy Gulf
States Capital I, a business trust created under the laws of the
State of Delaware (the "Issuer"). Entergy Gulf States, Inc.
(formerly Gulf States Utilities Company), a Texas corporation
(the "Company"), will be the owner of the beneficial interests
represented by common securities of the Issuer (the "Common
Securities"). The Bank of New York is the Property Trustee of
the Issuer. The Issuer exists for the sole purpose of issuing
the Preferred Securities and the Common Securities and investing
the proceeds thereof in ___% Junior Subordinated Deferrable
Interest Debentures, Series A, Due_____ (the "Junior Subordinated
Debentures") to be issued by the Company under the Indenture for
Unsecured Subordinated Debt Securities relating to Trust
Securities dated as of February 1, 1997 (the "Indenture"), which
will be qualified under and subject to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Preferred
Securities will have a preference under certain circumstances
with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the Common Securities.
See "Description of the Preferred Securities--Subordination of
Common Securities".
(Continued on next page)
________________
See "Risk Factors" beginning on page ___ hereof for certain
information relevant to an investment in the Preferred
Securities.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________
<TABLE>
<CAPTION>
Proceeds to
Initial Public Underwriting the
Offering Price Commission (1) Issuer (2) (3)
<S> <C> <C> <C>
Per Preferred $ (2) $
Security..............
Total................. $ (2) $
__________
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Preliminary Prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE>
(1) The Issuer and the Company have agreed to indemnify the
several Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".
(2) In view of the fact that the proceeds of the sale of the
Preferred Securities will be used to purchase the Junior
Subordinated Debentures, the Underwriting Agreement
provides that the Company will pay to the Underwriters, as
compensation ("Underwriters' Compensation") for their
arranging the investment therein of such proceeds, $_____
per Preferred Security; provided, that such compensation
will be $______ per Preferred Security sold to certain
institutions. Accordingly, the maximum aggregate amount
of Underwriters' compensation will be less than such
amount to the extent that the Preferred Securities are
sold to such institutions. See "Underwriting".
(3) Expenses of the offering, which are payable by the
Company, are estimated to be $________.
________________
The Preferred Securities offered hereby are offered
severally by the Underwriters, as specified herein, subject to
receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that
delivery of the Preferred Securities will be ready for delivery
in book-entry form only through the facilities of The Depository
Trust Company ("DTC") in New York, New York, on or about
___________, 1997, against payment therefor in immediately
available funds.
__________
*QUIPS is a servicemark of Goldman, Sachs & Co.
Goldman, Sachs & Co.
________________
The date of this Prospectus is _____________________, 1997
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE PREFERRED SECURITIES AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
__________________________
(Continued from previous page)
Holders of the Preferred Securities will be entitled to
receive preferential cumulative cash distributions accruing from
the date of original issuance and payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year,
commencing _____ , 1997, at the rate of ___% per annum of the
liquidation preference of $25 per Preferred Security
("Distributions"). The Company has the right to defer the
payment of interest on the Junior Subordinated Debentures at any
time or from time to time for one or more periods (each, an
"Extension Period"), provided that such Extension Period,
together with all previous and further extensions thereof prior
to its termination, does not exceed 20 consecutive quarters and
does not extend beyond the maturity of the Junior Subordinated
Debentures. Upon the termination of any such Extension Period
and the payment of all amounts then due, the Company may elect to
begin a new Extension Period subject to the requirements set
forth herein. If interest payments on the Junior Subordinated
Debentures are so deferred, Distributions on the Preferred
Securities will also be deferred and the Company will not be
permitted, subject to certain exceptions set forth herein, to
declare or pay any cash distributions with respect to the
Company's capital stock or debt securities that rank pari passu
with or junior to the Junior Subordinated Debentures or make any
guarantee payments with respect to the foregoing. During an
Extension Period, interest on the Junior Subordinated Debentures
will continue to accrue (and the Preferred Securities will
accumulate additional Distributions thereon at the rate of ___%
per annum, compounded quarterly), and holders of the Preferred
Securities will be required to accrue interest income for United
States Federal income tax purposes prior to receipt of cash
related to such interest income. See Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment
Period" and "Certain United States Federal Income Tax
Considerations--Potential Extension of Interest Payment Period
and Original Issue Discount".
The Company has, through the Guarantee, the Trust Agreement,
the Junior Subordinated Debentures, the Indenture and the Expense
Agreement (each as defined herein), taken together, fully,
irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Preferred Securities. The Guarantee of the
Company guarantees the payment of Distributions and payments on
liquidation of the Issuer or redemption of the Preferred
Securities as set forth below, in each case out of funds held by
the Issuer, to the extent described herein (the "Guarantee").
See "Description of the Guarantee." If the Company does not make
interest payments on the Junior Subordinated Debentures held by
the Issuer, the Issuer will have insufficient funds to pay
Distributions on the Preferred Securities. The Guarantee does
not cover payment of Distributions when the Issuer does not have
sufficient funds to pay such Distributions. The obligations of
the Company under the Guarantee are subordinate and junior in
right of payment to all Senior Debt (as defined in "Description
of the Junior Subordinated Debentures--Subordination") of the
Company.
The Preferred Securities are subject to mandatory redemption,
in whole or in part, upon repayment of the Junior Subordinated
Debentures at maturity or their earlier redemption in an amount
equal to the amount of Junior Subordinated Debentures maturing or
being redeemed at a redemption price equal to the aggregate
liquidation preference of such Preferred Securities plus
accumulated and unpaid Distributions thereon to the date of
redemption. See "Description of the Preferred Securities--
Redemption". The Junior Subordinated Debentures are redeemable
prior to maturity at the option of the Company (i) on or after
___________________, 2002, in whole at any time or in part from
time to time, at a redemption price equal to the accrued and
unpaid interest on the Junior Subordinated Debentures so redeemed
to the date fixed for redemption plus 100% of the principal
amount thereof, or (ii) at any time, in whole (but not in part),
upon the occurrence and continuation of a Special Event (as
defined herein), at a redemption price equal to the accrued and
unpaid interest on the Junior Subordinated Debentures so redeemed
to the date fixed for redemption plus 100% of the principal
amount thereof. See "Description of the Junior Subordinated
Debentures -- Redemption".
At any time, the Company will have the right to terminate the
Issuer and, after satisfaction of liabilities to creditors of the
Issuer, if any, as provided by applicable law, cause the Junior
Subordinated Debentures to be distributed to the holders of the
Preferred Securities and the Common Securities in liquidation of
the Issuer. See "Description of the Preferred Securities--
Redemptions -- Special Event Redemption or Distribution of Junior
Subordinated Debentures" and " -- Liquidation Distribution upon
Termination".
The Junior Subordinated Debentures are subordinate and junior
in right of payment to all Senior Debt of the Company. As of
September 30, 1996, the Company had approximately $2.3 billion of
Senior Debt outstanding. The terms of the Junior Subordinated
Debentures place no limitation on the amount of Senior Debt that
may be incurred by the Company. See "Description of the Junior
Subordinated Debentures--Subordination."
In the event of the liquidation of the Issuer, after
satisfaction of liabilities to creditors of the Issuer, if any,
as provided by applicable law, the holders of the Preferred
Securities will be entitled to receive a liquidation preference
of $25 per Preferred Security plus accumulated and unpaid
Distributions thereon to the date of payment, which liquidation
preference may be in the form of a distribution of such amount of
Junior Subordinated Debentures, subject to certain exceptions.
See "Description of the Preferred Securities--Liquidation
Distribution Upon Termination."
Application will be made to list the Preferred Securities on
the New York Stock Exchange (the "NYSE"). If the Junior
Subordinated Debentures are distributed to the holders of the
Preferred Securities upon the liquidation of the Issuer, the
Company will use its best efforts to list the Junior Subordinated
Debentures on the NYSE or such other stock exchanges or other
organizations, if any, on which the Preferred Securities are then
listed.
The Preferred Securities will be represented by one or more
global certificates registered in the name of DTC or its nominee.
Beneficial interests in the Preferred Securities will be shown
on, and transfers thereof will be effected only through, records
maintained by participants in DTC. Except as described under
"Description of the Preferred Securities--Book-Entry Issuance",
the Preferred Securities in certificated form will not be issued
in exchange for the global certificates.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade
Center, 13th Floor, Suite 1300, New York, New York 10048 and
Suite 1400, Citicorp Center, 14th Floor, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can also be
obtained at prescribed rates by writing to the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549. The Commission maintains a
Worldwide Web site that contains reports, proxy and information
statements and other information regarding reporting companies
under the Exchange Act, including the Company, at
http://www.sec.gov. In addition, such reports, proxy statements
and other information concerning the Company can be inspected at
the offices of the NYSE, 20 Broad Street, New York, New York
10005.
The Company and the Issuer have filed with the Commission a
Registration Statement on Form S-2 (together with all amendments
and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities offered hereby. This Prospectus does
not contain all the information set forth in the Registration
Statement and the exhibits thereto, certain portions of which
have been omitted as permitted by the rules and regulations of
the Commission. For further information with respect to the
Company, the Issuer and the securities offered hereby, reference
is made to the Registration Statement and the exhibits filed as a
part thereof or incorporated by reference therein, which may be
inspected at the public reference facilities of the Commission,
at the addresses set forth above. Statements made in this
Prospectus concerning the contents of any documents referred to
herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such
document filed as an exhibit to the Registration Statement.
No separate financial statements of the Issuer have been
included herein. The Company and the Issuer do not consider that
such financial statements would be material to holders of the
Preferred Securities because the Issuer is a newly formed special
purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage
in any activity other than its holding, as trust assets, the
Junior Subordinated Debentures of the Company and its issuance of
the Preferred Securities and Common Securities. The Issuer does
not intend to file separate reports under the Exchange Act, but
must apply for and be granted relief by the Commission to avoid
the requirement to file such reports. See "Entergy Gulf States
Capital I", "Description of the Preferred Securities",
"Description of the Guarantee" and "Description of the Junior
Subordinated Debentures".
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated into this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996.
3. The Company's Current Reports on Form 8-K dated March
22, 1996, April 19, 1996, April 29, 1996, August 26, 1996,
September 5, 1996 and November 27, 1996.
Any statement contained herein, or in a document all or a
portion of which is incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of the
Registration Statement and this Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document that also is incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or
this Prospectus.
The Company will provide without charge to any person to whom
this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the foregoing documents
incorporated by reference herein (other than exhibits not
specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to:
Christopher T. Screen, Assistant Secretary, P.O. Box 61000, New
Orleans, Louisiana 70161, telephone: (504) 576-4212.
<PAGE>
As used herein, (i) the term "Indenture" means the Indenture for
Unsecured Subordinated Debt Securities relating to Trust
Securities, as the same may be amended and supplemented from time
to time, between the Company and The Bank of New York, as
Debenture Trustee, pursuant to which the Junior Subordinated
Debentures will be issued, and (ii) the term "Trust Agreement"
means the Amended and Restated Trust Agreement, among the
Company, as Depositor, The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, and the
three Administrative Trustees named therein who are employees or
officers of or affiliated with the Company (collectively, with
the Property Trustee and the Delaware Trustee, the "Issuer
Trustees"). Each of the other capitalized terms used in this
Prospectus and not otherwise defined has the meaning set forth in
the Indenture or the Trust Agreement, as the case may be.
RISK FACTORS
Prospective purchasers of the Preferred Securities should
carefully review the information contained elsewhere in this
Prospectus and should particularly consider the following
matters.
Obligations Under the Guarantee and the Junior Subordinated
Debentures are Unsecured and Subordinate to Senior Debt
The obligations of the Company under the Guarantee issued by
the Company for the benefit of the holders of the Preferred
Securities are unsecured and rank subordinate and junior in right
of payment to all Senior Debt of the Company. The obligations of
the Company under the Junior Subordinated Debentures are
subordinate and junior in right of payment to all such Senior
Debt. At September 30, 1996, Senior Debt of the Company
aggregated approximately $2.3 billion. None of the Indenture,
the Guarantee or the Trust Agreement places any limitation on the
amount of secured or unsecured debt, including Senior Debt, that
may be incurred by the Company. See "Description of the
Guarantee--Status of the Guarantee" and "Description of the
Junior Subordinated Debentures--Subordination".
The ability of the Issuer to pay amounts due on the Preferred
Securities is solely dependent upon the Company making payments
on the Junior Subordinated Debentures as and when required.
Option to Extend Interest Payment Period; Tax Consequences;
Potential Market Volatility During Extension Period
The Company has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debentures at any
time or from time to time for one or more Extension Periods, each
of which, together with all previous and further extensions of
such Extension Period prior to its termination, may not exceed 20
consecutive quarters and may not extend beyond the maturity of
the Junior Subordinated Debentures. As a consequence of any such
election, quarterly Distributions on the Preferred Securities
would be deferred (but would continue to accumulate additional
Distributions thereon at the rate of ___% per annum, compounded
quarterly) by the Issuer during any such Extension Period. In
the event that the Company exercises this right, the Company may
not during any such Extension Period (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of the Company's
capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt
securities (including other Junior Subordinated Debentures ) that
rank pari passu with or junior in interest to the Junior
Subordinated Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company and (b) payments
under the Guarantee). Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to the above
requirements. Consequently, there could be multiple Extension
Periods of varying lengths throughout the term of the Junior
Subordinated Debentures. See "Description of the Preferred
Securities--Distributions" and "Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment
Period".
Should an Extension Period occur, a holder of the Preferred
Securities will continue to accrue interest income in respect of
its pro rata share of the Junior Subordinated Debentures held by
the Issuer for United States Federal income tax purposes. As a
result, a holder of the Preferred Securities will include such
interest in gross income for United States Federal income tax
purposes in advance of the receipt of cash, and will not receive
the cash related to such income from the Issuer if the holder
disposes of the Preferred Securities prior to the record date for
the payment of Distributions. See "Certain United States Federal
Income Tax Considerations--Potential Extension of Interest
Payment Period and Original Issue Discount" and "--Sale, Exchange
and Redemption of the Preferred Securities".
In the event the Company elects to exercise its right to
defer payments of interest on the Junior Subordinated Debentures,
the market price of the Preferred Securities is likely to be
affected. A holder that disposes of its Preferred Securities
during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its
Preferred Securities. In addition, as a result of the existence
of the Company's right to defer interest payments, the market
price of the Preferred Securities (which represent preferred
undivided beneficial interests in the Junior Subordinated
Debentures) may be more volatile than the market prices of other
securities on which original issue discount accrues that are not
subject to such deferrals.
Special Event Redemption; Adverse Effect of Possible Tax Law
Changes
Upon the occurrence and continuation of a Special Event, as
described in "Description of the Preferred Securities--Redemption-
- -Special Event Redemption or Distribution of Junior Subordinated
Debentures", the Company has the right to redeem the Junior
Subordinated Debentures in whole (but not in part), and thereby
cause a mandatory redemption of the Preferred Securities and the
Common Securities, at a redemption price equal to the accrued and
unpaid interest on the Junior Subordinated Debentures so redeemed
to the date fixed for redemption plus 100% of the principal
amount thereof, within 90 days following the occurrence of such
Special Event.
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the
"Bill"), the revenue portion of President Clinton's budget
proposal, was released. The Bill would, among other things,
generally have denied interest deductions for interest on an
instrument issued by a corporation that has a maximum weighted
average maturity of more than 40 years. The Bill would also
generally have treated as equity an instrument, issued by a
corporation, that has a maximum term of more than 20 years and
that is not shown as indebtedness on the separate balance sheet
of the issuer or, where the instrument is issued to a related
party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. The
above-described provisions were proposed to be effective
generally for instruments issued on or after December 7, 1995.
If either provision were to apply to the Junior Subordinated
Debentures, the Company would be unable to deduct interest on the
Junior Subordinated Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance and House Ways and Means
Committees issued a joint statement to the effect that it was
their intention that the effective date of the President's
legislative proposals, if adopted, would be no earlier than the
date of appropriate Congressional action. The 104th Congress
adjourned without any such action having been taken. There can
be no assurance, however, that future legislative proposals or
final legislation will not affect the ability of the Company to
deduct interest on the Junior Subordinated Debentures. If
legislation were enacted limiting, in whole or in part, the
deductibility by the Company of interest on the Junior
Subordinated Debentures for United States Federal income tax
purposes, such enactment could give rise to a Tax Event. A Tax
Event would permit the Company to cause a mandatory redemption of
the Preferred Securities, as described more fully under
"Description of the Preferred Securities--Redemption--Special
Event Redemption or
Distribution of Junior Subordinated Debentures".
Distribution of the Junior Subordinated Debentures
At any time, the Company has the right to terminate the
Issuer and, after satisfaction of liabilities to creditors, if
any, of the Issuer as provided by applicable law, cause the
Junior Subordinated Debentures to be distributed to the holders
of the Preferred Securities in liquidation of the Issuer.
There can be no assurance as to the market prices for the
Preferred Securities or the Junior Subordinated Debentures that
may be distributed in exchange for the Preferred Securities if a
liquidation of the Issuer were to occur. Accordingly, the
Preferred Securities that an investor may purchase, whether
pursuant to the offer made hereby or in the secondary market, or
the Junior Subordinated Debentures that a holder of the Preferred
Securities may receive on liquidation of the Issuer, could trade
at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby. Because holders of the
Preferred Securities may receive the Junior Subordinated
Debentures if the Company exercises its right to terminate the
Issuer, prospective purchasers of the Preferred Securities are
also making an investment decision with regard to the Junior
Subordinated Debentures and should carefully review all the
information regarding the Junior Subordinated Debentures
contained herein. See "Description of the Preferred Securities--
Redemption--Special Event Redemption or Distribution of Junior
Subordinated Debentures" and "Description of the Junior
Subordinated Debentures--Distribution of the Junior Subordinated
Debentures".
Rights under the Guarantee; Limitation as to Funds Available to
the Issuer
The Guarantee will be qualified as an indenture under the
Trust Indenture Act. The Bank of New York will act as Guarantee
Trustee for the purposes of compliance with the Trust Indenture
Act and will hold the Guarantee for the benefit of the holders of
the Preferred Securities. The Bank of New York will also act as
Debenture Trustee for the Junior Subordinated Debentures and as
Property Trustee under the Trust Agreement. The Bank of New York
(Delaware) will act as Delaware Trustee under the Trust
Agreement. The Guarantee guarantees to the holders of the
Preferred Securities the following payments, to the extent not
paid by the Issuer: (i) any accumulated and unpaid Distributions
required to be paid on the Preferred Securities, to the extent
that the Issuer has funds on hand available therefor, (ii) the
redemption price with respect to any Preferred Securities called
for redemption to the extent that the Issuer has funds on hand
available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer (unless the
Junior Subordinated Debentures are distributed to holders of the
Preferred Securities), the lesser of (a) the aggregate of the
liquidation preference amount and all accumulated and unpaid
Distributions to the date of payment and (b) the amount of assets
of the Issuer remaining available for distribution to holders of
the Preferred Securities. The holders of a majority in aggregate
Liquidation Preference Amount (as defined in "Description of the
Preferred Securities--Redemption") 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 the Guarantee or to direct the exercise of any
trust power conferred upon the Guarantee Trustee under the
Guarantee. Any holder of the Preferred Securities may institute
a legal proceeding directly against the Company to enforce its
rights under the Guarantee without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other
person or entity. If the Company were to default on its
obligation to pay amounts payable under the Junior Subordinated
Debentures, the Issuer would lack funds for the payment of
Distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and, in such event, holders of the
Preferred Securities would not be able to rely upon the Guarantee
for payment of such amounts. If the Property Trustee fails to
enforce its rights under the Junior Subordinated Debentures or
the Trust Agreement, a holder of the Preferred Securities may
institute a legal proceeding directly against the Company to
enforce the Property Trustee's rights under the Junior
Subordinated Debentures or the Trust Agreement, to the fullest
extent permitted by law, without first instituting any legal
proceeding against the Property Trustee or any other person or
entity. Notwithstanding the foregoing, a holder of the Preferred
Securities may directly institute a proceeding for enforcement of
payment to such holder of principal of or interest on the Junior
Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Preference Amount of the Preferred
Securities of such holder on or after the due dates specified in
the Junior Subordinated Debentures. See "Description of the
Preferred Securities", "Description of the Junior Subordinated
Debentures" and "Description of the Guarantee". The Trust
Agreement provides that each holder of the Preferred Securities,
by acceptance thereof, agrees to the provisions of the Guarantee
and the Indenture.
Limited Voting Rights
Holders of the Preferred Securities will generally have
limited voting rights relating only to the modification of the
Preferred Securities and the dissolution, winding-up or
termination of the Issuer. Holders of the Preferred Securities
will not be entitled to vote to appoint, remove or replace the
Property Trustee or the Delaware Trustee; such voting rights are
vested exclusively in the holder of the Common Securities except
upon the occurrence of certain events. The Administrative
Trustees and the Company may amend the Trust Agreement to ensure
that the Issuer will be classified for United States Federal
income tax purposes as a "grantor trust" without the consent of
holders, unless such action adversely affects in any material
respect the interests of holders. See "Description of the
Preferred Securities--Voting Rights; Amendment of Trust
Agreement" and "--Removal of Issuer Trustees".
Trading Price of the Preferred Securities May Not Reflect Value
of Accrued But Unpaid Interest
Application will be made to list the Preferred Securities on
the NYSE. If approved for listing, the Preferred Securities may
trade at a price that does not fully reflect the value of accrued
but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder of Preferred Securities who
disposes of its Preferred Securities will be required to include
in income (as ordinary income) accrued but unpaid interest on the
Junior Subordinated Debentures through the date of disposition
for United States Federal income tax purposes and to add such
amount to its adjusted tax basis in the Preferred Securities
disposed of by such holder. Such holder will recognize a capital
loss to the extent that the selling price (which may not fully
reflect the value of accrued but unpaid interest) is less than
its adjusted tax basis (which will include accrued but unpaid
interest). Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States
Federal income tax purposes. See "Certain United States Federal
Income Tax Considerations--Sale, Exchange and Redemption of the
Preferred Securities".
Significant Legal and Regulatory Proceedings and Other Issues
Affecting the Company
Reference is made to the Company's Annual Report on Form 10-
K for the year ended December 31, 1995, its Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, June 30, and
September 30, 1996, and its Current Reports on Form 8-K dated
March 22, 1996, April 19, 1996, April 29, 1996, August 26, 1996,
September 5, 1996, and November 27, 1996, incorporated by
reference herein, and to the Company's balance sheets as of
December 31, 1995 and 1994 and the statements of income (loss),
retained earnings, and cash flows for each of the three years in
the period ended December 31, 1995 and the Notes thereto (the
"Annual Financial Statements"), and the Company's balance sheet
as of September 30, 1996 and the statements of income (loss) for
the three and nine month periods ended September 30, 1996 and
1995 and the statement of cash flows for the nine month periods
ended September 30, 1996 and 1995 and the Notes thereto (the
"Interim Financial Statements"), set forth in this Prospectus ,
for a discussion of certain legal and/or regulatory proceedings
and other factors affecting the Company, including but not
limited to those described in the following paragraphs:
1. $1.4 billion of Company-wide abeyed and disallowed
costs associated with the River Bend Nuclear Plant ("River Bend")
that have not been allowed in rates in Texas and are the subject
of a writ of appeal before the Texas Supreme Court and which, if
ultimately disallowed in their entirety, could result in a write-
off, net of tax, of approximately $280 million, as of September
30, 1996 (See Note 2, "Rate and Regulatory Matters -- River Bend"
to the Interim Financial Statements and to the Annual Financial
Statements):
2. An increasing percentage of the Company's industrial
sales are or may be made at negotiated prices that recover less
than the fully allocated cost of service in order to meet
competitive pressures. In some cases, the Company is not
permitted to recover from other customers revenues that are
foregone as a result of charging such prices. (See "Management's
Financial Discussion and Analysis -- Significant Factors and
Known Trends", for the year ended December 31, 1995 and
"Management's Financial Discussion and Analysis -- Significant
Factors and Known Trends", for the quarterly period ended
September 30, 1996).
3. The increasing competitive challenges that are facing
the Company (See "Management's Financial Discussion and Analysis-
- -Significant Factors and Known Trends - Competition and Industry
Challenges" for the year ended December 31, 1995 and
"Management's Financial Discussion and Analysis--Significant
Factors and Known Trends - Competition and Industry Challenges"
for the quarterly period ended September 30, 1996).
4. The Company is subject to the risks attendant upon the
ownership and operation of River Bend, a 655 megawatt nuclear
powered generating unit. These include risks arising from the
operation of nuclear facilities and the storage, handling and
disposal of high-level and low-level radioactive materials,
limitations on the amounts and types of insurance commercially
available in respect of losses that might arise in connection
with nuclear operations, and uncertainties with respect to the
technological and financial aspects of decommissioning nuclear
plants at the end of their licensed lives. The Nuclear
Regulatory Commission (the "NRC") has broad authority under
Federal law to impose licensing and safety-related requirements
upon owners and operators of nuclear generating facilities and,
in the event of non-compliance, has the authority to impose fines
or shut down a unit, or both, depending upon its assessment of
the severity of the situation, until compliance is achieved.
Safety requirements promulgated by the NRC have, in the past,
necessitated substantial capital expenditures at nuclear plants
and additional such expenditures could be required in the future.
In addition, although the Company has no reason to anticipate a
serious nuclear incident at River Bend, if such an incident did
occur, it could have a material adverse effect on the financial
position of the Company.
<PAGE>
THE COMPANY
Entergy Gulf States, Inc. (formerly Gulf States Utilities
Company) was originally incorporated under the laws of the State
of Texas in 1925. The Company's principal executive offices are
located at 350 Pine Street, Beaumont, Texas 77701. Its telephone
number is 409-838-6631.
The Company is an electric public utility company engaged in
the generation, distribution and sale of electric energy with
substantially all of its operations in the States of Texas and
Louisiana. In addition to its principal electric business, the
Company produces and sells steam for industrial use and purchases
and retails natural gas in the Baton Rouge, Louisiana area. The
Company serves approximately 623,000 electric customers in
southeastern Texas and south Louisiana, of which approximately
49.9% reside in Louisiana and 50.1% reside in Texas. The Company
serves approximately 90,000 natural gas customers in Baton Rouge,
Louisiana. All of the outstanding common stock of the Company is
owned by Entergy ("Entergy"), a Delaware corporation. Entergy is
a registered public utility holding company under the Public
Utility Holding Company Act of 1935, as amended. The Company is
subject to the jurisdiction of the municipal authorities of
incorporated cities in Texas as to retail rates and services
within their boundaries, with appellate jurisdiction over such
matters residing in the Public Utility Commission of Texas (the
"PUCT"). The Company is also subject to regulation by the PUCT
as to retail rates and services in rural areas, certification of
new generating plants and extensions of service into new areas in
Texas. The Company is subject to regulation by the Louisiana
Public Service Commission ("the LPSC") as to electric and gas
service, rates and charges, certification of generating
facilities and power or capacity purchase contracts,
depreciation, accounting and other matters involving its service
territories in Louisiana. For the nine month period ended
September 30, 1996 and the twelve month period ended December 31,
1995, residential customers comprised 32.5% and 32% of total
sales, respectively, commercial customers comprised 22.6% and
23.1%, respectively, industrial customers comprised 34.9% and
33.8%, respectively, and governmental and other sales comprised
10% and 11.1%, of total sales, respectively.
Recent Developments
Cajun Settlement. Litigation brought by Cajun Electric
Power Cooperative, Inc. ("Cajun"), a generation cooperative,
which is a 30% co-owner of River Bend, against the Company
seeking recission and termination of the River Bend Joint
Ownership Participation and Operating Agreement and recovery of
Cajun's $1.6 billion investment in River Bend plus certain costs
and expenses is pending in federal court. An agreement (the
"Cajun Settlement") setting forth terms for resolution of all
such disputes has been reached by the Company, the Cajun
bankruptcy trustee and the U.S. Rural Utility Services, and was
approved by the United States District Court for the Middle
District of Louisiana (the "District Court") on August 26, 1996.
On September 6, 1996, the Committee of Unsecured Creditors in the
Cajun bankruptcy proceeding filed a Notice of Appeal to the
United States Court of Appeals for the Fifth Circuit, objecting
that the order approving the Cajun Settlement was separate from
the approval of a plan of reorganization and, therefore,
improper. The Cajun Settlement is subject to this appeal and to
approvals by the appropriate regulatory agencies. The Company
believes that it is probable that the Cajun Settlement will
ultimately be approved and consummated (See Note 1, "Commitments
and Contingencies," to the Interim Financial Statements).
Beginning in 1992, Cajun failed to pay its full share of
capital costs, operating and maintenance expenses, and other
costs for repairs and improvements to River Bend. Cajun's unpaid
portion of River Bend operating and maintenance expenses
(including nuclear fuel) and capital costs for the nine months
ended September 30, 1996, was approximately $42.9 million. The
cumulative cost to the Company resulting from Cajun's failure to
pay its full share of River Bend related costs, reduced by the
proceeds from the sale by the Company of Cajun's share of River
Bend power, and payments into the registry of the District Court
for the Company's portion of expenses for Big Cajun 2, Unit 3,
was $17.0 million as of September 30, 1996, compared with $31.1
million as of December 31, 1995. Cajun's unpaid portion of the
River Bend related costs is reflected in long-term receivables
with an offsetting reserve in other deferred credits. The Cajun
Settlement will conclude all disputes regarding the non-payment
by Cajun of operating and maintenance expenses (See Note 1,
"Commitments and Contingencies," to the Interim Financial
Statements).
On December 21, 1994, Cajun filed a petition in the United
States Bankruptcy Court for the Middle District of Louisiana (the
"Bankruptcy Court") seeking relief under Chapter 11 of the United
States Bankruptcy Code. In the bankruptcy proceedings, Cajun
filed a motion on January 10, 1995, to reject the Operating
Agreement as a burdensome executory contract. The Company
responded on January 10, 1995, with a memorandum opposing Cajun's
motion. This dispute will be resolved upon effectiveness of the
Cajun Settlement.
On March 8, 1996, Southwestern Electric Power Company
("SWEPCO"), the Company and certain member cooperatives of Cajun
filed with the Bankruptcy Court a joint proposal to bring an end
to the Cajun bankruptcy proceeding. The proposal was submitted
in response to a bid procedure established by the Cajun
bankruptcy trustee. On April 19, 1996, SWEPCO, the Company, and
certain Cajun member cooperatives filed a separate plan of
reorganization with the Bankruptcy Court based upon their earlier
proposal. On April 22, 1996, the Cajun bankruptcy trustee filed
a plan of reorganization with the Bankruptcy Court based on the
proposal of two non-affiliated companies to take over the non-
nuclear operations of Cajun. Proponents of all of the plans of
reorganization submitted to the Bankruptcy Court have
incorporated the Cajun Settlement as an integral condition to the
effectiveness of their plan. The timing and completion of the
reorganization depends on Bankruptcy Court approval and any
required regulatory approvals (See Note 1, "Commitments and
Contingencies" to the Interim Financial Statements ).
Competitive Transition Filings. On November 27, 1996, the
Company. filed a plan with the PUCT that calls for the
accelerated recovery of costs associated with River Bend. The
costs would be recovered over a seven year period and include
only those River Bend costs already in rate base. River Bend
costs not in rate base and which are the subject of an appeal
pending before the Texas Supreme Court are not included in the
plan.
This plan is designed to achieve an orderly transition to retail
electric competition in Texas while protecting ratepayers from
potential cost shifting among customer classes. It contains the
following key elements:
* Base rates will be frozen for seven years.
* The investment in River Bend as of June 30, 1996 will
be recovered over a seven year period. At the end of
this period, that investment would cease to be
recovered from customers through electric rates.
* To prevent unfair cost shifting among customer classes,
the plan provides for a universal service charge to be
paid by all customers, including those who choose to
purchase their electricity from another source, but
remain connected to the Company system. For customers
who continue to purchase electricity from the Company,
electric bills would not increase because the charge is
already included in electric rates.
* The filing proposes performance standards for River
Bend by setting a ceiling on operating, capital and
fuel expenses. If expenses exceed the ceiling, then
the Company will absorb the higher costs unless they
were caused by a catastrophic event. If expenses fall
below the ceiling, the Company will benefit from those
efficiencies.
* The filing also includes a performance rate plan that
has a return on equity band of two percent around a mid-
point established by the PUCT. The Company will absorb
costs or keep savings within the band. However, if
costs or savings are outside of the band, then these
would be shared equally with customers. This proposal
provides an incentive for the Company to operate more
efficiently.
The PUCT has not yet established a procedural schedule for
this proceeding. See "Management's Financial Discussion and
Analysis -- Significant Factors and Known Trends" for the quarter
ended September 30, 1996, regarding the Company's competitive
transition filing in Louisiana with the LPSC.
Significant Legal and Regulatory Proceedings
Proceedings currently pending before Texas and Louisiana
regulators, in which various parties are seeking reductions in
the Company's base rates or disallowances of fuel costs, are
discussed in Note 2, "Rate and Regulatory Matters" to the Interim
Financial Statements.
The foregoing information relating to the Company does not
purport to be comprehensive and should be read together with the
Annual Financial Statements and the Interim Financial Statements
and other information contained herein.
ENTERGY GULF STATES CAPITAL I
Entergy Gulf States Capital I is a statutory business trust
created under Delaware law pursuant to (i) a trust agreement
executed by the Company, as depositor of the Issuer, the Property
Trustee, the Delaware Trustee and an Administrative Trustee who
is an officer of the Company and (ii) the filing of a certificate
of trust with the Delaware Secretary of State. Such trust
agreement will be amended and restated in its entirety
substantially in the form of the Trust Agreement filed as an
exhibit to the Registration Statement of which this Prospectus is
a part. The Trust Agreement will be qualified as an indenture
under the Trust Indenture Act. The Issuer will have five Issuer
Trustees: The Bank of New York, as Property Trustee, The Bank of
New York (Delaware), as Delaware Trustee, and three individual
Administrative Trustees who are employees or officers of or
affiliated with the Company. The Bank of New York, as Property
Trustee, will act as sole indenture trustee under the Trust
Agreement for purposes of compliance with the Trust Indenture
Act. The Bank of New York will also act as Guarantee Trustee
under the Guarantee, and Debenture Trustee under the Indenture.
See "Description of the Guarantee" and "Description of the Junior
Subordinated Debentures". The holder of the Common Securities,
or the holders of a majority in liquidation preference of the
Preferred Securities if a Debenture Event of Default has occurred
and is continuing, will be entitled to appoint, remove or replace
the Property Trustee and/or the Delaware Trustee. In no event
will the holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustees;
such voting rights are vested exclusively in the holder of the
Common Securities. The duties and obligations of the Issuer
Trustees are governed by the Trust Agreement. The Company will
pay all fees and expenses related to the Issuer and the offering
of the Preferred Securities and will pay, directly or indirectly,
all ongoing costs, expenses and liabilities of the Issuer.
The Issuer exists for the exclusive purposes of (i) issuing
and selling the Preferred Securities and the Common Securities,
(ii) using the proceeds from the sale of such securities to
acquire the Junior Subordinated Debentures issued by the Company
and (iii) engaging in only those other activities necessary or
incidental thereto. Accordingly, the Junior Subordinated
Debentures will be the sole assets of the Issuer and payments
under the Junior Subordinated Debentures will be the sole revenue
of the Issuer. All of the Common Securities will be owned by the
Company. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of an
event of default under the Trust Agreement resulting from a
Debenture Event of Default, the rights of the Company as holder
of the Common Securities to payment in respect of Distributions
and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred
Securities. See "Description of the Preferred
Securities--Subordination of Common Securities". The Company
will acquire Common Securities having an aggregate liquidation
amount equal to 3% of the total capital of the Issuer. The
Issuer has a term of approximately 54 years, but may terminate
earlier as provided in the Trust Agreement. The principal
executive office of the Issuer is 639 Loyola Avenue, New Orleans,
Louisiana 70113, Attention: Treasurer, telephone: (504) 576-
4308.
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTH PERIOD ENDED
September 30, December 31,
- -------------- --------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ------ ---- ---- ----
1.34 1.09 1.86 0.36(1) 1.54 1.72 1.56
(1) Earnings for the year ended December 31, 1994 for the
Company were not adequate to cover fixed charges by $144.8
million.
SELECTED FINANCIAL DATA
(Dollars in Thousands)
The selected financial information of the Company set forth
below has been derived from and should be read in conjunction
with the Annual Financial Statements and the Interim Financial
Statements of the Company and other financial information
contained elsewhere in this Prospectus.
<TABLE>
<CAPTION>
For the Nine Months For the Twelve Months
Ended September 30 Ended December 31
------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1995 1994 1993 1992(1) 1991(1)
------ ------ ------ ------ ------ ------ ------
Operating $1,574,328 $1,419,242 $1,861,974 $1,797,365 $1,827,620 $1,773,374 $1,702,235
Revenues
Operating
Income 262,065 249,680 304,429 213,651 270,616 338,620 334,970
Interest
Expense (net) 148,149 148,034 199,199 203,059 209,868 247,469 259,968
Net Income
(Loss) before
extraordinary
items and the
cumulative
effect of
accounting
changes (14,152) 115,100 122,919 (82,755) 69,461 139,413 112,391
Net Income
(Loss) (14,152) 115,100 122,219 82,755) 78,862 133,848 112,030
Total Assets 6,568,575 6,858,223 6,861,058 6,843,461 7,137,351 7,164,447 7,183,119
Long-term
obligations(2) $2,346,532 $2,585,558 $2,521,103 $2,689,042 $2,772,002 $2,798,768 $2,816,577
</TABLE>
(1) Selected financial information for the years ended
December 31, 1992 and 1991 have been restated due to the
adoption on January 1, 1993 of Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income
Taxes.
(2) Includes long-term debt (excluding currently maturing
debt), preferred and preference stock with sinking fund, and
non- current capital lease obligations.
<PAGE>
<TABLE>
<CAPTION>
For the Nine Months For the Twelve Months
Ended September 30 Ended December 31
----------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <>c
1996 1995 1995 1994 1993 1992 1991
------ ------ ------ ------ ------ ------ ------
Electric Operating Revenues:
Residential $488,000 $447,700 $573,566 $569,997 $585,799 $560,552 $547,147
Commercial 340,500 311,900 412,601 414,929 415,267 400,803 383,883
Industrial 524,300 454,800 604,688 626,047 650,230 642,298 582,568
Governmental 23,500 18,300 25,042 25,242 26,118 26,195 24,792
Total retail 1,376,300 1,232,700 1,615,897 1,636,215 1,677,414 1,629,848 1,538,390
Sales for resale
Associated -
companies 13,600 43,900 62,431 45,263 - -
Non-associated 44,136
companies 61,300 52,300 67,103 52,967 31,898 24,485
Other (1) 50,500 37,200 43,533 (15,244) 38,649 40,203 41,433
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total $1,501,700 $1,366,100 $1,788,964 $1,719,201 $1,747,961 $1,694,536 $1,623,959
========== ========== ========== ========== ========== ========== ==========
Billed Electric Energy
Sales (Millions of kWh):
Residential 6,396 6,012 7,699 7,351 7,192 6,825 6,925
Commercial 4,905 4,680 6,219 6,089 5,711 5,474 5,460
Industrial 12,457 11,500 15,393 15,026 14,294 14,413 13,629
329 231 311 297 296 302 295
Governmental
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total retail 24,087 22,423 29,622 28,763 27,493 27,014 26,309
Sales for resale
Associated 399 2,092 2,935 1,866 - - -
companies
Non-associated 1,714 1,744 2,212 1,650 666 540 1,049
companies
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Electric 26,200 26,259 34,769 32,279 28,159 27,554 27,358
Department
Steam 1,367 1,308 1,742 1,659 1,597 1,722 1,711
Department
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total 27,567 27,567 36,511 33,938 29,756 29,276 29,069
========== ========== ========== ========== ========== ========== ==========
</TABLE>
(1) 1994 includes the effects of the Company's reserve for rate
refund.
Quarterly Financial Data
Operating Operating Net Income
Revenues Income (Loss)
---------- --------- -----------
1996:
First Quarter 456,631 65,075 (152,257)
Second Quarter 525,567 89,550 47,140
Third Quarter 592,130 107,440 90,965
<PAGE>
CAPITALIZATION
(Dollars in Thousands)
The following table sets forth the capitalization of the
Company as of September 30, 1996. The following data has been
derived from and should be read in conjunction with the Interim
Financial Statements of the Company and other financial
information contained elsewhere in this Prospectus.
<TABLE>
<CAPTION>
As of September 30, 1996
--------------------------------------
Actual As Adjusted(1)
-------------------------------------
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Common Stock and Paid-in
Capital.......... $ 1,266,744 31.8%
Retained Earnings... 322,054 8.1
Total Common
Shareholder's Equity 1,588,798 39.9
Preference Stock 150,000 3.8
Preferred Stock (without
sinking fund) 136,444 3.4
Preferred Stock (with
sinking fund)....... 77,460 1.9
Company Obligated
Mandatorily Redeemable
Preferred Securities of -- --
Subsidiary Trust (2)
First Mortgage Bonds (3) 1,489,611 37.4
Other Long-Term Debt (3) 540,683 13.6
----------- ------
Total Capitalization... $ 3,982,996 100.0%
</TABLE>
(1) Adjusted to give effect to the consummation of the offering
of the Preferred Securities and the application of the
estimated net proceeds therefrom, together with general
corporate funds, to redeem shares of preferred stock. See
"Use of Proceeds".
(2) As described herein, all of the assets of the Issuer will
be approximately $____ million of the Junior Subordinated
Debentures issued by the Company to the Issuer. The Junior
Subordinated Debentures will bear interest at the annual rate
of ___% of the principal amount thereof and will mature on
___________________. The Company owns all of the Common
Securities of the Issuer.
(3) Excludes current maturities of First Mortgage Bonds and
Other Long-Term Debt of $110.0 million and $50.9 million,
respectively.
<PAGE>
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
DECEMBER 31, 1995
Cash Flows
The Company is involved in a capital-intensive business
that requires large investments in long-lived assets. While
capital expenditures for the construction of new generating
capacity are not currently planned, the Company does require
significant capital resources for the periodic maturity of debt
and preferred stock and ongoing construction expenditures. Net
cash flow from operations totaled $401 million, $326 million, and
$ 255 million in 1995, 1994, and 1993, respectively. The
Company's net cash flow from operations increased in 1995 due to
higher revenues and lower operation and maintenance expenses.
This increase was partially offset by a Texas retail rate refund
recorded in 1994 and paid in 1995.
Financing Sources
In recent years, cash flows of the Company, supplemented by
cash on hand, have been sufficient to meet substantially all
investing and financing requirements, including capital
expenditures, dividends and debt/preferred stock maturities. The
Company's ability to fund these capital requirements with cash
from operations results, in part, from continued efforts to
streamline operations and reduce costs, as well as from
collections under rate phase-in plans that exceed current cash
requirements for the related costs. In the income statement,
these revenue collections are offset by the amortization of
previously deferred costs; therefore, there is no effect on net
income.
The Company's phase-in plan for River Bend will expire in
1998. In addition, the Company has the ability to meet future
capital requirements through future debt or preferred stock
issuances, as discussed below. Also, to the extent current
market interest and dividend rates allow, the Company may
continue to refinance high-cost debt and preferred stock prior to
maturity. See Notes 5, 6, and 8 in the Annual Financial
Statements for additional information on the Company's capital
and refinancing requirements in 1996 - 2000.
The Company periodically reviews its capital structure to
determine its future needs for debt and equity financing.
Certain agreements and restrictions limit the amount of mortgage
bonds and preferred stock that can be issued by the Company.
Based on the most restrictive applicable tests and available
retired bond credits as of December 31, 1995, and an assumed
annual interest rate of 8.25%, the Company could have issued
mortgage bonds in the amount of $1.4 billion. The Company was
precluded from issuing preferred stock at December 31, 1995.
In addition to these amounts, the Company has the ability,
subject to certain conditions, to issue bonds against retired
bonds. Such amounts may be significant in some instances, and,
in some cases, no earnings coverage test is required. The Company
has no earnings coverage limitations on the issuance of
preference stock. See Notes 5 and 6 in the Annual Financial
Statements for long-term debt and preferred stock issuances and
retirements. See Note 4 in the Annual Financial Statements for
information on the Company's short-term borrowings.
SIGNIFICANT FACTORS AND KNOWN TRENDS
Financing Requirements
See Notes 2 and 8 in the Annual Financial Statements
regarding River Bend rate appeals and litigation with Cajun.
Adverse rulings in the River Bend rate appeal could result in
approximately $289 million of potential write-offs (net of tax)
and $182 million in refunds of previously collected revenue.
Such write-offs and charges, as well as the application of
Statement of Financial Accounting Standards ("SFAS") 121 (see
Note 1 in the Annual Financial Statements ), could result in
substantial net losses being reported in the future by the
Company, with resulting adverse adjustments to common equity of
the Company. Adverse resolution of these matters could adversely
affect the Company's ability to obtain financing, which could in
turn affect the Company's liquidity and ability to pay dividends.
Competition and Industry Challenges
Electric utilities traditionally have operated as regulated
monopolies in which there was little opportunity for direct
competition in the provision of electric service. In return for
the ability to receive a reasonable return on and of their
investments, utilities were obligated to provide service and meet
future customer requirements. However, the electric utility
industry is now undergoing a transition to an environment of
increased retail and wholesale competition.
Pressures that underlie the movement toward increasing
competition are numerous and complex. They include legislative
and regulatory changes, technological advances, consumer demands,
greater availability of natural gas, environmental needs, and
other factors. The increasingly competitive environment presents
opportunities to compete for new customers, as well as the risk
of loss of existing customers. Competition presents the Company
with many challenges. The following have been identified by the
Company as its major competitive challenges.
The Energy Policy Act of 1992
The Energy Policy Act of 1992 ("EPAct") addresses a wide
range of energy issues and is being implemented by both the
Federal Energy Regulatory Commission ("FERC") and state
regulators. The EPAct is designed to promote competition among
utility and non utility generators by amending the Public Utility
Holding Company Act of 1935, as amended, ("PUHCA") to exempt from
regulation a class of Exempt Wholesale Generators ("EWGs"), among
others, consisting of utility affiliates and non utilities that
own and operate facilities for the generation and transmission of
power for sale at wholesale. The EPAct also gave FERC the
authority to order investor-owned utilities to transmit power and
energy to or for wholesale purchasers and sellers. This creates
potential for electric utilities and other power producers to
gain increased access to the transmission systems of other
utilities to facilitate wholesale sales.
In response to the EPAct, FERC issued a notice of proposed
rulemaking in mid-1994. This rulemaking concerns a regulatory
framework for dealing with recovery of costs that were prudently
incurred by electric utilities to serve customers under the
traditional regulatory framework. These costs may become
"stranded" as a result of increased competition. On March 29,
1995, FERC issued a supplemental notice of proposed rulemaking in
this proceeding that would require public utilities to provide
nondiscriminatory open access transmission service to wholesale
customers and would also provide guidance on the recovery of
wholesale and retail stranded costs. The risk of exposure to
stranded costs that may result from competition in the industry
will depend on the extent and timing of retail competition, the
resolution of jurisdictional issues concerning stranded cost
recovery, and the extent to which such costs are recovered from
departing or remaining customers.
With regard to pending proceedings, including Entergy's open
access transmission tariff proceedings originally filed in 1991
and amended in 1994 and 1995, FERC directed the parties to
proceed with their cases while taking into account FERC's
proposed rule. Comments and reply comments on the proposed
rulemaking have now been filed with FERC by interested parties.
Certain of the parties filing comments have proposed that FERC
should order the immediate unbundling of all retail services as
part of the final rulemaking in this proceeding, which is
expected in the second quarter of 1996. In its comments in the
proposed rulemaking, Entergy urged FERC to exercise its authority
and responsibility to serve as a "backstop" in the event a state
is unable or unwilling to provide for stranded-cost recovery --
particularly in the case of multi-state utilities (such as
Entergy and its subsidiaries), where cost shifting among
jurisdictions might otherwise occur.
Retail and Wholesale Rate Issues
The Company has recently been ordered to grant base rate
reductions and has refunded or credited customers for previous
overcollections of rates. See Note 2 in the Annual Financial
Statements for additional discussion of rate reductions and
incentive-rate regulation.
In connection with the Merger consummated on December 31,
1993, by which the Company became a subsidiary of Entergy (the
"Merger"), the Company agreed with the LPSC and the PUCT to a
five-year rate cap on retail electric rates, which is the level
of the Company's retail electric base rates in effect at December
31, 1993, for the Louisiana retail jurisdiction, and the level of
such rates in effect prior to the settlement agreement with the
PUCT on July 21, 1994, for the Texas retail jurisdiction, which
may not be exceeded before December 31, 1998 ("Rate Cap").
Additionally, the Company agreed to pass through to retail
customers the fuel savings and a certain percentage of the
nonfuel savings created by the Merger. Under the terms of their
respective Merger agreements, the LPSC and PUCT have reviewed the
Company's base rates during the first post-Merger earnings
analysis and ordered rate reductions. See Note 2 in the Annual
Financial Statements for additional discussion of the Company's
post-Merger filings with the LPSC and the PUCT.
Potential Changes in the Electric Utility Industry
Retail wheeling, the transmission by an electric utility of
energy produced by another entity over the utility's transmission
and distribution system to a retail customer in the electric
utility's area of service, continues to evolve. Approximately 40
states including Louisiana and Texas have initiated studies of
the concept of retail competition or are considering it as part
of industry restructuring.
The PUCT is currently developing rules that will permit
greater wholesale electric competition in Texas, as mandated by
the Texas legislature in its 1995 session. These wholesale
transmission access rules are expected to be in place by the
first quarter of 1996. In addition, the PUCT is developing
information to be contained in reports that will be submitted to
the 1997 legislature concerning broader competitive issues such
as the unbundling of electric utility operations, market-based
pricing, performance-based ratemaking, and the identification and
recovery of potential stranded costs as part of the transition to
a more competitive electric industry environment. This
information will be developed through a series of workshops and
comments by interested parties throughout 1996. In addition,
during 1995, the Texas legislature revised the Public Utility
Regulatory Act, the law regulating electric utilities in Texas.
The revised law permits utility and non-utility EWGs and power
marketers to sell wholesale power in the state. The revised law
also permits the discounting of rates with certain conditions,
but does not change the current law governing retail wheeling or
the treatment of federal income taxes.
During the second quarter of 1995, the Louisiana legislature
considered a bill permitting local retail wheeling. The bill was
defeated, but similar bills are likely to be introduced in the
future. During the same time period, the LPSC initiated a
generic docket to investigate retail, wholesale, and affiliate
wheeling of electricity. Currently, no procedural schedule has
been set for this docket.
During January 1996, a bill entitled the "Electric Power
Competition Act of 1996" was introduced into the United States
House of Representatives. The bill proposes to amend certain
provisions under Public Utility Regulatory Policies Act
("PURPA") for the purpose of facilitating future deregulation of
the electric power industry.
In some areas of the country, municipalities (or comparable
entities) whose residents are served at retail by an investor-
owned utility pursuant to a franchise, are exploring the
possibility of establishing new electric distribution systems,
or extending existing ones. In some cases, municipalities are
also seeking new delivery points in order to serve retail
customers, especially large industrial customers, which
currently receive service from an investor-owned utility. Where
successful, however, the establishment of a municipal system or
the acquisition by a municipal system of a utility's customers
could result in the utility's inability to recover costs that it
has incurred for the purpose of serving those customers.
Significant Industrial Cogeneration Effects
Many of the Company's industrial customers, whose costs
structures are energy-sensitive, have energy alternatives
available to them such as fuel switching, cogeneration, and
production shifting. Cogeneration is generally defined as the
combined production of electricity and some other useful form of
heat, typically steam. Cogenerated power may either be sold by
its producer to the local utility at its avoided cost under
PURPA, and/or utilized by the cogenerator to displace purchases
from the utility. To the extent that cogeneration is used by
industrial customers to meet their own power requirements, the
Company may suffer loss of industrial load. It is the practice
of the Company to negotiate the renewal of contracts with large
industrial customers prior to their expiration. In certain
cases, contracts or special tariffs that use flexible pricing
have been negotiated with industrial customers to keep these
customers as the Company's customers. The pricing agreements are
not at fully allocated cost of service. Such rates may fully
recover all related costs, but provide only a minimal return, if
any, on investment. In 1995, kilowatt-hour ("kWh") sales to the
Company's industrial customers at less than full cost-of-service
rates made up approximately 27% of the Company's total industrial
class sales.
Since PURPA was enacted in 1978, the Company has been
largely successful in retaining industrial load. The Company
anticipates it will be successful in renegotiating such contracts
with large industrial customers. However, this competitive
challenge will likely increase. There can be no assurance that
the Company will be successful or that future revenues will not
be lost to other forms of generation.
Deregulated Utility Operations
The Company discontinued regulatory accounting principles
for its wholesale jurisdiction and steam department and the
Louisiana deregulated portion of River Bend during 1989 and 1991,
respectively. The operating income (loss) from these operations
was $7.2 million in 1995, $(5.2) million in 1994, and $(2.9)
million in 1993.
The increase in 1995 net income from deregulated operations
was due to increased revenues and reduced operation and
maintenance expenses, partially offset by increased depreciation.
The larger net loss from deregulated operations in 1994 was
principally due to a smaller income tax benefit. The future
impact of the deregulated utility operations on the Company's
results of operations and financial position will depend on
future operating costs, the efficiency and availability of
generating units, and the future market for energy over the
remaining life of the assets. The Company expects the performance
of its deregulated utility operations to improve, due to
continued reductions in operation and maintenance expenses. The
deregulated operations will be subject to the requirements of
SFAS 121, as discussed in Note 1 in the Annual Financial
Statements, in determining the recognition of any asset
impairment.
Property Tax Exemptions
The Company is working with tax authorities to determine
the method for calculating the amount of property taxes to be
paid once River Bend's local property tax exemptions expire.
River Bend's exemption expires in December 1996.
Environmental Issues
The Company has been notified by the U. S. Environmental
Protection Agency ("EPA") that it has been designated as a
Potentially Responsible Party ("PRP") for the clean-up of certain
hazardous waste disposal sites. See Note 8 in the Annual
Financial Statements for additional information.
Accounting Issues
New Accounting Standard - In March 1995, the Financial
Accounting Standards Board ("FASB") issued SFAS 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of" ("SFAS 121"), effective January 1, 1996. This
standard describes circumstances that may result in assets being
impaired and provides criteria for recognition and measurement of
asset impairment. See Notes 1 and 2 in the Annual Financial
Statements for information regarding the potential impacts of the
new accounting standard on the Company.
Continued Application of SFAS 71 - As a result of the EPAct
and actions of regulatory commissions, the electric utility
industry is moving toward a combination of competition and a
modified regulatory environment. The Company's financial
statements currently reflect, for the most part, assets and costs
based on current cost-based ratemaking regulations in accordance
with SFAS 71, "Accounting for the Effects of Certain Types of
Regulation" ("SFAS 71"). Continued applicability of SFAS 71 to
the Company's financial statements requires that rates set by an
independent regulator on a cost-of-service basis can actually be
charged to and collected from customers.
In the event that all or a portion of a utility's operations
cease to meet those criteria for various reasons, including
deregulation, a change in the method of regulation, or a change
in the competitive environment for the utility's regulated
services, the utility should discontinue application of SFAS 71
for the relevant portion. That discontinuation should be
reported by elimination from the balance sheet of the effects of
any actions of regulators recorded as regulatory assets and
liabilities.
Except for certain portions of the Company's business, as of
December 31, 1995, and for the foreseeable future, the Company's
financial statements continue to follow SFAS 71. See Note 1 in
the Annual Financial Statements for additional discussion of the
Company's application of SFAS 71.
Accounting for Decommissioning Costs - The staff of the
Commission has been reviewing the financial accounting practices
of the electric utility industry regarding the recognition,
measurement, and classification of nuclear decommissioning costs
for nuclear generating stations in the financial statements of
electric utilities. In February 1996 the FASB issued an exposure
draft of the proposed SFAS addressing the accounting for
decommissioning costs as well as liabilities related to the
closure and removal of all long-lived assets. See Note 8 in the
Annual Financial Statements for a discussion of proposed changes
in the accounting for decommissioning/closure costs and the
potential impact of these changes on the Company.
<PAGE>
RESULTS OF OPERATIONS
December 31, 1995
Net Income
Net income increased in 1995 principally as the result of an
increase in electric operating revenues, a decrease in other
operation and maintenance expenses, and an increase in other
income. These changes were partially offset by higher income
taxes.
Net income decreased in 1994 due primarily to write-offs and
charges associated with the resolution of contingencies and
additional Merger-related costs aggregating $137 million, a base
rate reduction ordered by the PUCT applied retroactively to March
1994, and restructuring costs. See Note 2 and Note 11 in the
Annual Financial Statements for additional information.
Significant factors affecting the results of operations and
causing variances between the years 1995 and 1994, and 1994 and
1993, are discussed under "Revenues and Sales", "Expenses", and
"Other" below.
Revenues and Sales
See "SELECTED FINANCIAL DATA", for information on operating
revenues by source and kWh sales. The changes in electric
operating revenues for the twelve months ended December 31, 1995,
are as follows:
Increase/
Description (Decrease)
(In Millions)
--------------------- ------------
Change in base $32.0
revenues
Fuel cost recovery (29.6)
Sales volume/weather 35.0
Other revenue 1.1
(including unbilled)
Sales for resale 31.3
---------
Total $69.8
=========
Electric operating revenues increased in 1995 primarily due
to increased sales volume/weather and higher sales for resale.
These increases were partially offset by lower fuel adjustment
revenues, which do not affect net income. Base revenues also
increased in 1995 as a result of rate refund reserves established
in 1994, as discussed below, which were subsequently reduced as a
result of an amended PUCT order. The increase in base revenues
was partially offset by rate reductions in effect for Texas and
Louisiana. Sales volume/weather increased because of warmer than
normal weather and an increase in usage by all customer classes.
Sales for resale increased as a result of changes in generation
availability and requirements among the subsidiaries of Entergy
which include Entergy Arkansas, Inc., the Company, Entergy
Louisiana, Inc., Entergy Mississippi, Inc., and Entergy New
Orleans, Inc., (collectively referred to as the "Operating
Companies").
Electric operating revenues decreased in 1994 due primarily
to a base rate reduction ordered by the PUCT applied
retroactively to March 1994, see Note 2 in the Annual Financial
Statements for additional information, and lower retail fuel
revenues partially offset by increased wholesale revenues
associated with higher sales for resale and increased retail base
revenue. The decrease in retail revenues is primarily due to a
decrease in fuel recovery revenue and a November 1993 rate
reduction in Texas. Energy sales increased due primarily to
higher sales for resale as a result of the Company's
participation in the Entergy power pool, which includes Entergy
and its various direct and indirect subsidiaries (the "System").
Gas operating revenues decreased for 1995 primarily due to a
decrease in residential sales. This decrease was the result of a
milder winter than in 1994.
Expenses
Operating expenses decreased in 1995 as a result of lower
other operation and maintenance expenses and purchased power
expenses, partially offset by higher income taxes. Other
operation and maintenance expenses decreased primarily due to
charges made in 1994 for Merger-related costs, restructuring
costs, and certain pre-acquisition contingencies including
unfunded Cajun-River Bend costs and environmental clean-up costs.
Purchased power expenses decreased because of the availability of
less expensive gas and nuclear fuel for use in electric
generation as well as changes in the generation requirements
among the Operating Companies. In addition, the decrease in
purchased power expenses in 1995 was the result of the recording
of a provision for refund of disallowed purchased power expenses
in 1994. Income taxes increased primarily due to higher pre-tax
income in 1995.
Operating expenses increased in 1994 due primarily to higher
purchased power and other operation and maintenance expenses,
partially offset by lower fuel for electric generation and fuel-
related expense and lower income tax expense. Purchased power
expenses increased in 1994 due to the Company's participation in
joint dispatch through the System power pool resulting from
increased energy sales as discussed above. The increase in
purchased power expenses in 1994 was also due to the recording of
a provision for refund of disallowed purchased power costs
resulting from a Louisiana Supreme Court ruling. Fuel, fuel-
related expenses, and gas purchased for resale decreased in 1994
primarily due to lower gas prices.
Other operation and maintenance expenses increased in 1994
due primarily to charges associated with certain pre-acquisition
contingencies, additional Merger-related costs and restructuring
costs as discussed in Note 11 in the Annual Financial Statements.
Income taxes decreased in 1994 due primarily to lower pretax
income resulting from the charges discussed above.
Other
Other miscellaneous income increased in 1995 as the result
of certain adjustments made in 1994 related to pre-acquisition
contingencies including Cajun-River Bend litigation (see Note 8
in the Annual Financial Statements for additional information)
the write-off of previously disallowed rate deferrals, and plant
held for future use. As a result of these charges, income taxes
on other income were significantly higher in 1995 compared to
1994.
Other miscellaneous income decreased in 1994 due to the
write-off of plant held for future use, establishment of a
reserve related to the Cajun-River Bend litigation, the write-off
of previously disallowed rate deferrals, and obsolete spare
parts. These charges were partially offset by lower interest
expense as a result of the continued refinancing of high-cost
debt.
Income taxes decreased in 1994 due primarily to the charges
discussed above.
<PAGE>
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
SEPTEMBER 30, 1996
Cash Flows
Net cash flow from operations for the Company was $263.4
million and $344.3 million for the nine months ended September
30, 1996, and 1995, respectively. The Company's cash flow from
operations decreased for the nine months ended September 30,
1996, due to increased accounts receivable balances resulting
from higher energy sales, and greater amounts of under-recovered
fuel costs over the same period in 1995.
Financing Sources
The Company's current ability to fund most of the capital
requirements for its domestic utility businesses with cash from
operations results from continued efforts to streamline
operations and to reduce costs, as well as from collections under
rate phase-in plans that exceed current cash requirements for the
related costs. In the income statement, these revenue
collections are offset by the amortization of previously deferred
costs so that there is no effect on net income. These phase-in
plans will continue to contribute to the Company's cash position
until 1998. Should additional cash be needed for investing and
financing requirements, the Company has the ability, subject to
regulatory approval and compliance with issuance tests, to issue
debt or preferred securities to meet such requirements, as
discussed below. In addition, to the extent market interest and
dividend rates allow, the Company will continue to refinance
higher cost debt and preferred stock prior to maturity.
The Company periodically reviews its capital structure to
determine its future needs for debt and equity financing.
Certain agreements and restrictions limit the amount of mortgage
bonds and preferred stock that can be issued by the Company.
Based on the most restrictive applicable tests and available
retired bond credits as of September 30, 1996, and an assumed
annual interest rate of 8.5%, the Company could have issued
mortgage bonds in the amount of $867 million. The Company was
precluded from issuing preferred stock under its earnings
coverage tests at September 30, 1996. The Company has no
earnings coverage limitations on the issuance of preference
stock.
The Company also has Commission authorization to effect
short-term borrowings. See Note 4 in the Annual Financial
Statements for information on the Company's short-term borrowing
authorizations and bank lines of credit.
Financing Uses
Due to its financial position, the Company has not paid
common stock dividends since the third quarter of 1994 and is not
currently expected to pay common stock dividends during the
remainder of 1996. Declarations of dividends on common stock are
made at the discretion of the Company's Board of Directors. See
Note 7 in the Annual Financial Statements for information on
dividend restrictions.
See Notes 1 and 2 in the Interim Financial Statements
regarding the River Bend rate appeal and litigation with Cajun,
including the Cajun Settlement. An adverse ruling in this appeal
could result in approximately $280 million of potential write-
offs (net of tax) and $199 million in refunds of previously
collected revenue. Such write-offs and charges could result in
additional substantial net losses being reported in the future by
the Company, with resulting adverse adjustments to common equity
of the Company. Adverse resolution of these matters could
adversely affect the Company's' ability to obtain financing,
which in turn could affect its liquidity and ability to pay
dividends.
<PAGE>
SIGNIFICANT FACTORS AND KNOWN TRENDS
Competition and Industry Challenges
See "Management's Financial Discussion and Analysis -
Significant Factors and Known Trends" for the year ended December
31, 1995, for a discussion of the increasing competitive
pressures facing the Company and the electric utility industry.
On April 24, 1996, the FERC issued Order No. 888 affirming
its initial proposal that all public utilities subject to its
jurisdiction provide comparable wholesale transmission access
through the filing of a single open access tariff. FERC
established the minimum conditions that must be included in such
open access tariffs and also set forth certain provisions
concerning the structuring of transactions within power pools,
public utility holding companies, and bilateral coordination
arrangements. The rules took effect sixty days after they were
published in the Federal Register. In addition, FERC ruled that
public utilities are entitled to full recovery of prudently
incurred costs allocable to FERC jurisdictional customers. If
the costs are stranded by retail wheeling, public utilities
should first seek recovery of these costs from the appropriate
state or local regulators.
Concurrent with the issuance of Order No. 888, FERC issued
Order No. 889 which prescribes the requirements and procedures
for the implementation and maintenance of an open access same-
time information system by each public utility. In addition,
FERC issued a Notice of Proposed Rulemaking concerning capacity
reservation tariffs as the next phase of FERC's efforts to
promote wholesale competition. On July 9, 1996, Entergy filed,
on behalf of its subsidiaries including the Company, an open
access proforma tariff.
On September 20, 1996, FERC issued an order revising the
original requirement in Order No. 889 that open access same-time
information service sites and Standards of Conduct be in place
for all transmission providers by November 1, 1996. The
Commission has now scheduled a two-step compliance procedure
where the operation of open access same-time information service
sites must begin on a test basis starting on December 2, 1996,
with full commercial operations and compliance with the Standards
of Conduct to begin January 3, 1997.
As discussed in "Management's Financial Discussion And
Analysis - Significant Factors And Known Trends" for the year
ended December 31, 1995, Entergy proposed that FERC serve in a
federal "back-stop" role for wholesale stranded cost recovery in
a holding company or other multi-state situation. FERC's final
rule in Order No. 888 recognized that denial of retail stranded
cost recovery by a state regulatory authority could
inappropriately shift the disallowed costs to affiliated
operating companies in other states. FERC encouraged the
affected state regulators in such situations to seek a mutually
agreeable approach to this potential problem. If the approach
results in a filing to modify a jurisdictional agreement, FERC
could agree with such a proposal, particularly if other
interested parties support the filing. In the event the state or
local regulators cannot reach a consensus, FERC would ultimately
have to resolve the appropriate treatment of such stranded costs.
The Company has initiated discussions with its state and
local (Texas Cities) regulators regarding an orderly transition
to a more competitive market for electricity.
On October 5, 1996, the Company filed a proposal with the
LPSC designed to achieve an orderly transition to retail electric
competition in Louisiana, while protecting certain classes of
ratepayers from unfairly bearing the burden of cost shifting.
The proposal does not increase rates for any customer class.
However, the proposal does provide for a universal service charge
for customers that remain connected to the Company's electric
facilities and choose to purchase their electricity from another
source. In addition, the proposal includes a base rate freeze,
which would be put into effect for seven years in the Louisiana
areas serviced by the Company. This proposal also allows for the
complete amortization of the remaining plant investment
associated with River Bend over a seven year period.
Retail and Wholesale Rate Issues
See Note 2 in the Annual Financial Statements for a
discussion of the ongoing trend of regulatory-ordered rate
reductions including recent LPSC orders for the Company.
Potential Changes in the Electric Utility Industry
Refer to "Management's Financial Discussion and Analysis -
Significant Factors And Known Trends" for the year ended December
31, 1995 for a discussion of legislative and regulatory
developments relating to the potential for retail competition in
the areas served by the Company.
Significant Industrial Cogeneration Effects
The development of proposals for cogeneration projects by
certain industrial customers of the Company over the last several
years has caused the Company to develop and secure approval for
rate tariffs lower than those previously approved by the PUCT and
the LPSC for such industrial customers. In certain cases,
contracts or special tariffs that use flexible pricing have been
negotiated with industrial customers to keep these customers as
the Company's customers. The contracts and tariffs are not at
fully allocated cost-of-service rates. Although the rates fully
recover operating expenses and depreciation, they provide no more
than a minimal return on investment. During the nine months
ended September 30, 1996, kWh sales to industrial customers of
the Company at less than fully allocated cost-of-service rates
made up approximately 30% of total industrial sales.
Deregulated Utility Operations
The Company discontinued regulatory accounting principles in
1989 for its wholesale jurisdiction and steam department and in
1991 for the Louisiana deregulated portion of River Bend. The
recent improving trend in net income from these operations
continued during the three months and nine months ended September
30, 1996, when the related operating income was $3.3 million and
$11.3 million, respectively, compared to $1.2 million for the
fiscal year ended 1995.
The improvement in net income from deregulated operations in
the three months and nine months ended September 30, 1996, was
principally due to increased revenues, partially offset by
increased income taxes. The future impact of the deregulated
utility operations on the Company's results of operations and
financial position will depend on future operating costs, future
efficiency and availability of generating units, and future
market prices for energy over the remaining life of the assets.
The Company expects the performance of its deregulated utility
operations to continue to improve due to ongoing reductions in
operation and maintenance expenses.
Property Tax Exemptions
As discussed in "Management's Financial Discussion And
Analysis - Significant Factors And Known Trends" for the year
ended December 31, 1995, River Bend's local property tax
exemption will expire in December 1996. The Company is working
with tax authorities to determine the method for calculating the
amount of property taxes to be paid when River Bend's local
property tax exemption expires in December 1996.
Environmental Issues
The Company has been notified by the EPA that it has been
designated as a PRP for the clean-up of certain hazardous waste
disposal sites. See Note 1 in the Annual Financial Statements
for additional information.
Accounting Issues
Continued Application of SFAS 71 - As a result of the EPAct,
the actions of regulatory commissions, and other factors, the
electric utility industry is moving toward a combination of
competition and a modified regulatory environment. The Company's
financial statements currently reflect, for the most part, assets
and costs based on existing cost-based ratemaking regulations in
accordance with SFAS 71. Continued applicability of SFAS 71 to
the Company's financial statements requires that rates set by an
independent regulator on a cost-of-service basis be charged to
and collected from customers.
In the event that all or a portion of a utility's operations
cease to meet those criteria for various reasons, including
deregulation, a change in the method of regulation, or a change
in the competitive environment for the utility's regulated
services, the utility shall discontinue application of SFAS 71
for the relevant portion of its operations by eliminating from
the balance sheet the effects of any actions of regulators
recorded as regulatory assets and liabilities.
The Company's financial statements continue to follow SFAS
71 for their regulated operations, except for those portions of
the Company's business described in "Deregulated Utility
Operations" above.
Accounting for Decommissioning Costs - In February 1996, the
FASB issued an exposure draft of a proposed SFAS addressing the
accounting for decommissioning costs of nuclear generating units
as well as liabilities related to the closure and removal of all
long-lived assets. See Note 1 in the Interim Financial
Statements for a discussion of proposed changes in the
accounting for decommissioning/closure costs and the potential
impact of these changes on the Company.
_______________________________________________
Investors are cautioned that forward-looking statements contained
herein with respect to the revenues, earnings, competitive
performance, or other prospects for the business of the Company
may be influenced by factors that could cause actual outcomes and
results to be materially different than projected. Such factors
include, but are not limited to, the effects of weather, the
performance of generating, units, fuel prices and availability,
regulatory decisions and the effects of changes in law, capital
spending requirements, the evolution of competition, changes in
accounting standards, and other factors.
<PAGE>
RESULTS OF OPERATIONS
September 30, 1996
Net Income
Net income increased for the three months ended September
30, 1996, primarily due to the reversal of an accrual for the
Cajun-River Bend litigation. In September 1994, the Company
recorded a reserve for the anticipated costs of the Cajun-River
Bend litigation. Based on the Bankruptcy Court's approval of the
settlement (refer to Note 1 in the Interim Financial Statements
), the litigation accrual was reversed resulting in miscellaneous
income. Excluding the effects of the reversal of the litigation
reserve, net income for the three months ended September 30, 1996
would have decreased approximately 11% due to an increase in
other operation and maintenance expenses and other interest
expense.
Net income decreased for the nine months ended September 30,
1996, due to the $174 million net of tax write-off of River Bend
rate deferrals required by the adoption of SFAS 121. Excluding
the write-off and the third quarter reversal of the Cajun-River
Bend litigation accrual, net income for the nine months ended
September 30, 1996, would have increased due to reduced other
operation and maintenance expenses.
Significant factors affecting the results of operations and
causing variances between the three months and nine months ended
September 30, 1996, and 1995 are discussed under "Revenues and
Sales," "Expenses," and "Other" below.
Revenues and Sales
The changes in electric operating revenues for the three
months and nine months ended September 30, 1996, are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Description Increase/(Decrease) Increase/(Decrease)
<S> <C> <C>
Change in base ($11.2) ($30.4)
revenues
Fuel cost recovery 44.1 135.4
Sales 13.8 60.2
volume/weather
Other revenue
(including 4.0 (8.3)
unbilled)
Sales for resale (3.6) (21.3)
------ --------
Total $47.1 $135.6
======= ========
</TABLE>
Electric operating revenues increased for the three months
and nine months ended September 30, 1996, as a result of higher
fuel adjustment revenues, which do not affect net income,
increased number of customers, and increased customer usage.
These increases were partially offset by a rate reduction ordered
for Texas in 1995 and lower sales for resale to associated
companies, due to changing generation availability and
requirements among the operating companies of Entergy.
Gas operating revenues and steam operating revenues
increased for the three months and nine months ended September
30, 1996, primarily due to higher fuel prices and increased
usage.
Expenses
Operating expenses increased for the three months and nine
months ended September 30, 1996, as a result of higher fuel
expenses, including purchased power, and higher income taxes.
Fuel and purchased power expenses, taken together, increased
because of higher gas prices. In addition, increased energy
requirements resulting from higher energy sales contributed to
the increase in fuel and purchased power for the nine months
ended September 30, 1996. Income taxes increased primarily due
to higher pre-tax income, excluding the net effect of the write-
off of River Bend rate deferrals discussed below. For the three
months ended September 30, 1996, other operation and maintenance
expenses increased as a result of increased litigation reserves
and higher lease expenses relating to computer equipment. These
increases were partially offset by lower payroll-related expenses
due to employee attrition. Other operation and maintenance
expenses decreased for the nine months ended September 30, 1996,
principally due to lower payroll-related expenses associated with
restructuring programs recorded in 1995.
Other interest charges increased for the three months and
nine months ended September 30, 1996 due to interest charges
recorded in connection with a fuel cost refund.
Other
Other income increased for the three months ended September
30, 1996, due to the reversal of the Cajun-River Bend litigation
accrual, as discussed above.
Other income decreased for the nine months ended September
30, 1996, primarily due to the write-off of River Bend rate
deferrals pursuant to the adoption of SFAS 121, which became
effective January 1, 1996. See Note 2 in the Interim Financial
Statements for further discussion. This decrease was partially
offset by the reversal of the Cajun-River Bend litigation
accrual, as discussed above.
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer will be treated
as a subsidiary of the Company and, accordingly, the accounts of
the Issuer will be included in the consolidated financial
statements of the Company. The Preferred Securities will be
presented as a separate line item in the consolidated balance
sheet of the Company entitled "Company Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trust Holding
Solely Company Junior Subordinated Deferrable Debentures" and
appropriate disclosures about the Preferred Securities, the
Guarantee and the Junior Subordinated Debentures will be included
in the notes to the consolidated financial statements. For
financial reporting purposes, the Company will record
Distributions payable on the Preferred Securities as an expense.
USE OF PROCEEDS
All of the proceeds from the sale of the Preferred
Securities will be invested by the Issuer in the Junior
Subordinated Debentures. The Company intends to use the proceeds
from the sale of such Junior Subordinated Debentures, together
with general corporate funds, to redeem shares of its outstanding
preferred stock. The series of preferred stock that may be
redeemed are as follows: $35 million in aggregate par value of
the Company's 9.96 % Preferred Stock and $50 million in aggregate
par value of the Company's 8.52% Preferred Stock.
DESCRIPTION OF THE PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement, the Issuer will
issue the Preferred Securities and the Common Securities. The
Preferred Securities will represent preferred undivided
beneficial interests in the assets of the Issuer and the holders
thereof will be entitled to a preference in certain circumstances
with respect to Distributions and amounts payable on redemption
or liquidation over the Common Securities of the Issuer, as well
as other benefits as described in the Trust Agreement. This
summary of certain provisions of the Trust Agreement does not
purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Trust
Agreement, including the definitions therein of certain terms,
and the Trust Indenture Act. Wherever particular defined terms
of the Trust Agreement are referred to, such defined terms are
incorporated herein by reference. The form of the Trust
Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
General
The Preferred Securities of the Issuer will rank pari passu
and payments will be made thereon pro rata with the Common
Securities of the Issuer except as described under "--
Subordination of Common Securities". Legal title to the Junior
Subordinated Debentures will be held by the Property Trustee in
trust for the benefit of the holders of the Preferred Securities
and Common Securities. The Company has, through the Guarantee,
the Trust Agreement, the Junior Subordinated Debentures, the
Indenture and the Expense Agreement, taken together, fully,
irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Preferred Securities.
Distributions
Distributions on each Preferred Security will be payable at
the rate of ___% per annum of the stated Liquidation Preference
Amount of $25, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year. Distributions that
are in arrears for more than one quarter will accumulate
additional Distributions thereon at the rate of _____% per annum
thereof, compounded quarterly ("Additional Amounts"). The term
"Distributions" as used herein shall include any such Additional
Amounts. Distributions will accumulate from ____________, 1997,
the date of original issuance. The first Distribution payment
date for the Preferred Securities will be _______ __, 1997,. The
amount of Distributions payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months.
So long as no Debenture Event of Default under the Indenture
has occurred and is continuing, the Company has the right under
the Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time and from time to time, for
one or more Extension Periods, each of which, together with all
previous and further extensions of such Extension Period prior to
its termination, may not exceed 20 consecutive quarters and may
not extend beyond the maturity of the Junior Subordinated
Debentures. As a consequence of any such election, quarterly
Distributions on the Preferred Securities would be deferred (but
would continue to accumulate additional Distributions thereon at
the rate of ___% per annum, compounded quarterly) by the Issuer
during any such Extension Period. In the event that the Company
exercises this right, during any such Extension Period, the
Company may not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make
any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities (including other
Indenture Debentures as defined herein) that rank pari passu with
or junior in interest to the Junior Subordinated Debentures or
make any guarantee payments with respect to the foregoing (other
than (a) dividends or distributions in common stock of the
Company and (b) payments under the Guarantee and all other
guarantees issued by the Company with respect to any preferred
securities issued by any trust, partnership or other entity which
is a financing vehicle of the Company). Upon the termination of
any such Extension Period and the payment of all amounts then
due, the Company may elect to begin a new Extension Period,
subject to the above requirements. See "Description of the
Junior Subordinated Debentures--Option to Extend Interest Payment
Period" and "Certain United States Federal Income Tax
Considerations--Potential Extension of Interest Payment Period
and Original Issue Discount".
The Company has no current intention of exercising its right
to defer payments of interest by extending the interest payment
period on the Junior Subordinated Debentures.
In the event that any date on which Distributions are payable
on the Preferred Securities is not a Business Day (as defined
below), payment of the Distributions 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, payment of such Distributions shall be
made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on
which Distributions are payable in accordance with the foregoing,
a "Distribution Date"). A "Business Day" shall mean any day
other than a Saturday or a Sunday, or 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 a day on which the
corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
It is anticipated that the revenue of the Issuer available
for distribution to holders of its Preferred Securities will be
limited to payments under the Junior Subordinated Debentures in
which the Issuer will invest the proceeds from the issuance and
sale of its Preferred Securities and its Common Securities. See
"Description of the Junior Subordinated Debentures". If the
Company does not make interest payments on the Junior
Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Preferred Securities. The
payment of Distributions (if and to the extent the Issuer has
funds available for the payment of such Distributions and cash
sufficient to make such payments) is guaranteed by the Company on
a limited basis as set forth herein under "Description of the
Guarantee".
Distributions on the Preferred Securities of the Issuer will
be payable to the holders of record thereof as they appear on the
register of the Issuer on the relevant record dates, which, as
long as the Preferred Securities remain in book-entry only form,
will be one Business Day prior to the relevant Distribution Date.
Subject to any applicable laws and regulations and the provisions
of the Trust Agreement, each such payment will be made as
described under "--Book-Entry Issuance". In the event any
Preferred Securities are not in book-entry only form, the
relevant record date for such Preferred Securities shall be the
date 15 days prior to the relevant Distribution Date.
Redemptions
Mandatory Redemption. Upon the repayment or redemption, in
whole or in part, of the Junior Subordinated Debentures, whether
at maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall
be applied by the Property Trustee to redeem a Like Amount of the
Preferred Securities, upon not less than 30 nor more than 60 days
notice to each holder of Preferred Securities at its registered
address, at a Redemption Price equal to the aggregate Liquidation
Preference Amount of the Preferred Securities plus accumulated
and unpaid Distributions thereon to the Redemption Date.
Optional Redemption of Junior Subordinated Debentures. The
Company will have the right to redeem the Junior Subordinated
Debentures on or after ___________, 2002, in whole at any time or
in part from time to time, at a redemption price equal to the
accrued and unpaid interest on the Junior Subordinated Debentures
so redeemed to the date fixed for redemption plus 100% of the
principal amount thereof and thereby cause a mandatory redemption
of a Like Amount of Preferred Securities at the Redemption Price.
See "Description of the Junior Subordinated Debentures--
Redemption."
Special Event Redemption or Distribution of Junior
Subordinated Debentures. If a Special Event in respect of the
Preferred Securities and Common Securities shall occur and be
continuing, the Company has the right to redeem the Junior
Subordinated Debentures at any time in whole (but not in part) at
a redemption price equal to the accrued and unpaid interest on
the Junior Subordinated Debentures so redeemed to the date fixed
for redemption plus 100% of the principal amount thereof, and
thereby cause a mandatory redemption of the Preferred Securities
and Common Securities in whole (but not in part) at the
Redemption Price within 90 days following the occurrence of such
Special Event.
Whether or not a Special Event has occurred, the Company has
the right, at any time, to terminate the Issuer and, after
satisfaction of liabilities to creditors of the Issuer, if any,
as provided by applicable law, cause the Junior Subordinated
Debentures to be distributed to the holders of the Preferred
Securities and Common Securities in liquidation of the Issuer.
Under current United States federal income tax law, provided the
Issuer is treated as a "grantor trust" at the time of such
distribution, such distribution would not be a taxable event to
holders of the Preferred Securities. See "Certain United States
Federal Income Tax Considerations -- Receipt of the Junior
Subordinated Debentures or Cash Upon Liquidation of the Issuer".
If the Company does not elect any of the options described above,
the Preferred Securities will remain outstanding and, in the
event a Tax Event has occurred and is continuing, Additional
Interest (as described under "Description of the Junior
Subordinated Debentures -- Certain Covenants of the Company")
will be payable on the Junior Subordinated Debentures. See "--
Liquidation Distribution Upon Termination", "Description of the
Junior Subordinated Debentures -- Redemption" and " --
Distribution of the Junior Subordinated Debentures".
"Tax Event" means the receipt by the Issuer or the Company of
an Opinion of Counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, 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 by the Issuer under the Trust Agreement,
there is more than an insubstantial risk that (i) the Issuer is,
or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income received or
accrued on the Junior Subordinated Debentures, (ii) interest
payable by the Company on the Junior Subordinated Debentures is
not, or within 90 days of the date thereof, will not be,
deductible by the Company, in whole or in part, for United States
Federal income tax purposes, or (iii) the Issuer is, or will be
within 90 days of the date thereof, subject to more than a de
minimis amount of other taxes, duties or other governmental
charges.
"Investment Company Event" means 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") to
the effect that the Issuer is or will be considered an
"investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment
Company Act"), which Change in 1940 Act Law becomes effective on
or after the date of original issuance of the Preferred
Securities.
"Special Event' means the occurrence of a Tax Event or an
Investment Company Event.
"Like Amount" means (i) with respect to a redemption of any
Preferred Securities, Preferred Securities and Common Securities
having a Liquidation Preference Amount equal to that portion of
the principal amount of Junior Subordinated 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 Preferred Securities and Common Securities, and (ii) with
respect to a distribution of Junior Subordinated Debentures to
holders of the Preferred Securities in connection with a
termination and liquidation of the Issuer, Junior Subordinated
Debentures having a principal amount equal to the Liquidation
Preference Amount of the Preferred Securities of the holder to
whom such Junior Subordinated Debentures are distributed.
"Liquidation Preference Amount" means the stated amount of
$25 per Preferred Security and Common Security.
After the liquidation date fixed for any distribution of
Junior Subordinated Debentures for the Preferred Securities (i)
the Preferred Securities will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the record holder of the
Preferred Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated
Debentures to be delivered upon such distribution, (iii) the
Company will use its reasonable efforts to list the Junior
Subordinated Debentures on the NYSE or such other exchanges or
other organizations, if any, on which the Preferred Securities
are then listed or traded and (iv) any certificates representing
the Preferred Securities not held by DTC or its nominee will be
deemed to represent the Junior Subordinated Debentures having a
principal amount equal to the stated liquidation preference of
the Preferred Securities, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on the
Preferred Securities until such certificates are presented to the
Administrative Trustees or their agent for transfer or
reissuance.
There can be no assurance as to the market prices for the
Preferred Securities or the Junior Subordinated Debentures that
may be distributed in exchange for the Preferred Securities if a
termination and liquidation of the Issuer were to occur.
Accordingly, the Preferred Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor
may receive upon termination and liquidation of the Issuer, may
trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby.
Redemption Procedures
Preferred Securities redeemed on each Redemption Date shall
be redeemed at the Redemption Price with the applicable proceeds
from the contemporaneous redemption of the Junior Subordinated
Debentures. Redemptions of the Preferred Securities shall be
made and the Redemption Price shall be payable on each Redemption
Date only to the extent that the Issuer has funds on hand
available for the payment of such Redemption Price. See also
"--Subordination of Common Securities".
If the Issuer gives a notice of redemption in respect of the
Preferred Securities, then, by 12:00 noon, New York City time, on
the Redemption Date, to the extent funds are available, the
Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give
DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of such Preferred Securities. See
"--Book-Entry Issuance". If the Preferred Securities are no
longer in book-entry form, the Issuer, to the extent funds are
available, will irrevocably deposit with the paying agent for the
Preferred Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the
holders thereof upon surrender of their certificates evidencing
such Preferred Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to
the holders of such Preferred Securities as of 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 the holders of
such Preferred Securities so called for redemption will cease,
except the right of the holders of such Preferred Securities to
receive the Redemption Price, but without interest on such
Redemption Price, and such Preferred Securities will cease to be
outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the
Redemption Price 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 falls in the next succeeding calendar year,
such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price in
respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer
or by the Company pursuant to the Guarantee as described under
"Description of the Guarantee", Distributions on the Preferred
Securities will continue to accrue at the then applicable rate,
from the Redemption Date originally established by the Issuer for
such Preferred 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.
Subject to applicable law (including, without limitation,
United States Federal securities law), the Company or its
subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or
by private agreement.
Payment of the Redemption Price on the Preferred Securities
and any distribution of Junior Subordinated Debentures to holders
of Preferred Securities shall be made to the applicable
recordholders thereof as they appear on the register for the
Preferred Securities as of the relevant record date, which shall
be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the
event that the Preferred Securities are not in book-entry form,
the relevant record date for the Preferred Securities shall be
the date 15 days prior to the Redemption Date or liquidation
date, as applicable.
If less than all of the Preferred Securities and Common
Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Preference Amount of such Preferred
Securities and Common Securities to be redeemed shall be
allocated pro rata among the Preferred Securities and the Common
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 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 Preference Amount of
Preferred Securities of a denomination larger than $25. The
Property Trustee shall promptly notify the transfer agent and
registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected
for partial redemption, the aggregate Liquidation Preference
Amount thereof to be redeemed. For all purposes of the 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 aggregate
Liquidation Preference Amount of Preferred Securities which has
been or is to be redeemed.
Subordination of Common Securities
Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, shall be made
pro rata based on the Liquidation Preference Amount of such
Preferred Securities and Common 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 Amounts, if applicable) on, or Redemption
Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of
the Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions (including
Additional Amounts, if applicable) on all of the 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 of the
outstanding Preferred Securities, shall have been made or
provided for, and all funds available to the Property Trustee
shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on,
or Redemption Price of, the Preferred Securities then due and
payable.
In the case of any Event of Default resulting from a
Debenture Event of Default, the Company, as holder of the Common
Securities, will be deemed to have waived any right to act with
respect to any such Event of Default under the Trust Agreement
until the effect of all such Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under the Trust
Agreement with respect to the Preferred Securities 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 on behalf of the Company as 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.
Liquidation Distribution upon Termination
Pursuant to the Trust Agreement, the Issuer shall
automatically terminate upon expiration of its term and shall be
terminated on the first to occur of: (i) the occurrence of
certain events of bankruptcy, dissolution or liquidation of the
Company; (ii) the delivery of written direction to the Property
Trustee to terminate the Issuer (which direction is optional and
wholly within the discretion of the Company as Depositor of the
Issuer) (see "-- Redemptions--Special Event Redemption or
Distribution of Junior Subordinated Debentures"); (iii) the
redemption of all of the Preferred Securities as described under
"--Redemptions -- Mandatory Redemption"; and (iv) an order for
the termination of the Issuer shall have been entered by a court
of competent jurisdiction.
If an early termination occurs as described in clause (i),
(ii) or (iv) above, the Issuer shall be liquidated by the Issuer
Trustees as expeditiously as the Issuer Trustees determine to be
possible by distributing, after satisfaction of liabilities to
creditors of the Issuer, if any, as provided by applicable law,
to the holders of such Preferred Securities and Common Securities
a Like Amount of the Junior Subordinated Debentures, unless such
distribution is determined by the Property Trustee not to be
practical, in which event the holders will be entitled to receive
out of the assets of the Issuer available for distribution to
holders, after satisfaction of liabilities to creditors of the
Issuer, if any, as provided by applicable law, an amount equal
to, in the case of holders of Preferred Securities, the aggregate
of the Liquidation Preference Amount plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being
the "Liquidation Distribution"). See "Description of the Junior
Subordinated Debentures--Distribution of the Junior Subordinated
Debentures". If such Liquidation Distribution can be paid only
in part because the Issuer has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Issuer on the Preferred
Securities shall be paid on a pro rata basis. The holder(s) of
the Common Securities will be entitled to receive distributions
upon any such liquidation pro rata with the holders of the
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.
Liquidation Value
The amount payable on the Preferred Securities in the event
of any liquidation of the Issuer is $25 per Preferred Security
plus accumulated and unpaid Distributions, unless, subject to
certain exceptions, in connection with such liquidation, the
Junior Subordinated Debentures are distributed to the holders of
the Preferred Securities. See "--Liquidation Distribution upon
Termination".
Events of Default; Notice
Any one of the following events constitutes an "Event of
Default" under the Trust Agreement (an "Event of Default")
(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):
(i) the occurrence of a Debenture Event of Default under
the Indenture (see "Description of the Junior Subordinated
Debentures--Debenture Events of Default"); or
(ii) default by the Issuer in the payment of any
Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(iii) default by the Issuer in the payment of any
Redemption Price of any Preferred Security or Common Security
when it becomes due and payable; or
(iv) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Issuer
Trustees in the 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 (ii) or (iii) 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 Issuer Trustee or Trustees by the
holders of at least 10% in aggregate Liquidation Preference
Amount of the outstanding Preferred Securities, a written
notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of
Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy with
respect to the Issuer.
Within five Business Days after the occurrence of any Event
of Default known to the Property Trustee, the Property Trustee
shall transmit notice of such Event of Default to the holders of
the Preferred Securities, the Administrative Trustees and the
Company, as depositor, unless such Event of Default shall have
been cured or waived. The Company, as depositor, and the
Administrative Trustees are required to file annually with the
Property Trustee a certificate as to whether or not they are in
compliance with all the conditions and covenants applicable to
them under the Trust Agreement.
If a Debenture Event of Default with respect to the Junior
Subordinated Debentures has occurred and is continuing, the
Preferred Securities shall have a preference over the Common
Securities upon termination of the Issuer as described above.
See "--Liquidation Distribution upon Termination".
Removal of Issuer Trustees
Unless a Debenture Event of Default with respect to the
Junior Subordinated Debentures shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the
holder of the Common Securities. If such a Debenture Event of
Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders
of a majority in aggregate Liquidation Preference Amount of the
outstanding Preferred Securities. In no event will the holders
of the Preferred Securities have the right to vote to appoint,
remove or replace the Administrative Trustees, which voting
rights are vested exclusively in the Company as the holder of the
Common Securities. No resignation or removal of an Issuer
Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by a successor
trustee in accordance with the provisions of the Trust Agreement.
Co-trustees and Separate Property 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 applicable Trust Property
may at the time be located, the Company, as the holder of the
Common Securities, and the Property Trustee shall have the power
to appoint one or more persons either to act as a co-trustee,
jointly with the Property Trustee, of all or any part of such
Trust Property, or 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 such capacity any property, title, right or power
deemed necessary or desirable, subject to the provisions of the
Trust Agreement. In case a Debenture Event of Default with
respect to the Junior Subordinated Debentures has occurred and is
continuing, the Property Trustee alone shall have power to make
such appointment.
Merger or Consolidation of Issuer Trustees
Any entity into which the Property Trustee, the Delaware
Trustee or any Administrative Trustee that is not a natural
person may be merged or converted or with which it may be
consolidated, or any entity resulting from any merger, conversion
or consolidation to which such Trustee shall be a party, or any
entity succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee
under the Trust Agreement, provided such entity shall be
otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the
Issuer
The Issuer 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 as described below or as
otherwise described in the Trust Agreement. The Issuer may, at
the request of the Company, with the consent of the
Administrative Trustees and without the consent of the holders of
the Preferred Securities, 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 Issuer with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other
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 Company expressly
appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee
as the holder of the Junior Subordinated 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 Issuer, (vii) prior to
such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an
opinion from independent counsel to the Issuer experienced in
such matters 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 Issuer nor such successor entity
will be required to register as an investment company under the
Investment Company Act and (viii) the Company or any permitted
successor or assignee 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
Issuer shall not, except with the consent of holders of 100% in
aggregate Liquidation Preference Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit
any other entity to consolidate, amalgamate, merge with or into,
or replace it if such consolidation, amalgamation, merger or
replacement would cause the Issuer or the successor entity to be
classified as other than a "grantor trust" for United States
Federal income tax purposes.
Voting Rights; Amendment of Trust Agreement
Except as provided below and under "Description of the
Guarantee--Amendments and Assignment" and as otherwise required
by law and the Trust Agreement, the holders of the Preferred
Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the
Company and the Administrative Trustees, without the consent of
the holders of the Preferred Securities (i) to cure any
ambiguity, correct or supplement any provisions in the Trust
Agreement which may be inconsistent with any other provision, or
to make any other provisions with respect to matters or questions
arising under the Trust Agreement, that shall not be inconsistent
with the other provisions of the Trust Agreement, (ii) to modify,
eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Issuer will be
classified for United States Federal income tax purposes as a
grantor trust at all times that any of its Preferred Securities
and Common Securities are outstanding or to ensure that the
Issuer will not be required to register as an "investment
company" under the Investment Company Act, or (iii) to effect the
acceptance of appointment by a successor Issuer Trustee;
provided, however, that in the case of clause (ii), such action
shall not adversely affect in any material respect the interests
of any holder of the Preferred Securities or Common Securities,
and, in the case of clause (i), any amendments of the Trust
Agreement shall become effective when notice thereof is given to
the holders of Preferred Securities and Common Securities. The
Trust Agreement may be amended by the Administrative Trustees and
the Company with (i) the consent of holders representing a
majority (based upon aggregate Liquidation Preference Amount) of
the outstanding Preferred Securities and Common Securities and
(ii) receipt by the Issuer Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power
granted to the Issuer Trustees in accordance with such amendment
will not affect the Issuer's status as a grantor trust for United
States Federal income tax purposes or the Issuer's exemption from
status of an "investment company" under the Investment Company
Act, provided that without the consent of each holder of the
Preferred Securities and Common Securities, the Trust Agreement
may not be amended to (i) change the amount or timing of any
Distribution on the Preferred Securities and Common Securities or
otherwise adversely affect the amount of any Distribution
required to be made in respect of the Preferred Securities and
Common Securities as of a specified date or (ii) restrict the
right of holders of the Preferred Securities and Common
Securities to institute suit for the enforcement of any such
payment on or after such date as described below.
So long as any Junior Subordinated Debentures are held by the
Property Trustee, the Issuer 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 Property Trustee with respect to such
Junior Subordinated Debentures, (ii) waive any past default that
is waiveable under Section 813 of the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of
all the Junior Subordinated Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of
the Indenture or the Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the
prior approval of the holders of a majority in aggregate
Liquidation Preference Amount of all outstanding Preferred
Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Junior
Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior written
consent of each holder of the Preferred Securities. The Issuer
Trustees shall not revoke any action previously authorized or
approved by a vote of the Preferred Securities except by
subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify all holders of Preferred Securities
of any notice of default with respect to the Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of
the holders of the Preferred Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an
Opinion of Counsel experienced in such matters to the effect that
the Issuer will 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.
If the Property Trustee fails to enforce its rights under the
Junior Subordinated Debentures or the Trust Agreement, a holder
of Preferred Securities may institute a legal proceeding directly
against the Company to enforce the Property Trustee's rights with
respect to the Junior Subordinated Debentures or the Trust
Agreement, to the fullest extent permitted by law, without first
instituting any legal proceeding against the Property Trustee or
any other person. Notwithstanding the foregoing, a holder of
Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of principal of or interest
on the Junior Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Preference Amount of the
Preferred Securities of such holder on or after the due dates
specified in the Junior Subordinated Debentures. See
"Description of the Guarantee".
Any required approval of holders of Preferred Securities may
be given at a meeting of holders of Preferred Securities convened
for such purpose or pursuant to written consent. The Property
Trustee will cause a notice of any meeting at which holders of
Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken,
to be given to each holder of record of Preferred Securities in
the manner set forth in the Trust Agreement.
No vote or consent of the holders of Preferred Securities
will be required for the Issuer to redeem and cancel the
Preferred Securities in accordance with the Trust Agreement.
Notwithstanding that holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are owned
by the Company, the Issuer Trustee or any affiliate of the
Company or any Issuer Trustees, shall, for purposes of such vote
or consent, be treated as if they were not outstanding.
Payment and Paying Agency
Payments in respect of the Preferred Securities shall be made
to DTC, which shall credit the relevant accounts at DTC on the
applicable Distribution Dates or, if any Preferred Securities are
not held by DTC, such payments shall be made by check mailed to
the address of the holder entitled thereto as such address shall
appear on the Securities Register. The paying agent (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 Company. The Paying Agent shall
be permitted to resign as Paying Agent upon 30 days' written
notice to the Administrative Trustees and the Company. In the
event that the Property Trustee shall no longer be the Paying
Agent, the Administrative Trustees shall appoint a successor to
act as Paying Agent (which shall be a bank or trust company
acceptable to the Property Trustee and the Company).
Book-Entry Issuance
DTC will act as securities depositary for the Preferred
Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global
certificates will be issued for the Preferred Securities,
representing the aggregate total number of the Preferred
Securities, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number
of its Direct Participants and by the NYSE, the American Stock
Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships
with Direct Participants, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must
be made by or through Direct Participants, which will receive a
credit for the Preferred Securities on DTC's records. The
ownership interest of each actual purchaser of each Preferred
Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests
in the Preferred Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Preferred Securities,
except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
To facilitate subsequent transfers, all of the Preferred
Securities deposited by the Participants with DTC are registered
in the name of DTC's nominee, Cede & Co. The deposit of
Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has
no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Preferred Securities are
credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the
registered holder of the Preferred Securities. If less than all
of the Preferred Securities are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of
each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities is
limited to the holders of record of the Preferred Securities, in
those instances in which a vote is required, neither DTC nor Cede
& Co. will itself consent or vote with respect to Preferred
Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Issuer as soon as
possible after the record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to
whose accounts such Preferred Securities are credited on the
record date (identified in a listing attached to the Omnibus
Proxy).
Distribution payments on the Preferred Securities will be
made to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payments on such payment
date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and
will be the responsibility of such Participant and not of DTC,
the Property Trustee, the Issuer or the Company, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Payment of Distributions to DTC is the
responsibility of the Issuer, disbursement of such payments to
Direct Participants is the responsibility of DTC, and
disbursements of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities
depositary with respect to the Preferred Securities at any time
by giving reasonable notice to the Issuer and the Company. In
the event that a successor securities depositary is not obtained,
definitive Preferred Security certificates representing the
Preferred Securities are required to be printed and delivered.
The Company, at its option, may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor
depositary). After a Debenture Event of Default, the holders of
a majority in aggregate Liquidation Preference Amount of
Preferred Securities may determine to discontinue the system of
book-entry transfers through DTC. In any such event, definitive
certificates for the Preferred Securities will be printed and
delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Issuer
and the Company believe to be accurate, but the Issuer and the
Company assume no responsibility for the accuracy thereof.
Neither the Issuer nor the Company has any responsibility for the
performance by DTC or its Participants of their respective
obligations as described herein or under the rules and procedures
governing their respective operations.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent
for the Preferred Securities.
Registration of transfers of Preferred Securities will be
effected without charge by or on behalf of the Issuer, but upon
payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The Issuer
will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities
have been called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and
continuance of an Event of Default, undertakes to perform only
such duties as are specifically set forth in the Trust Agreement
and, after such Event of Default, must exercise the same degree
of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Trust Agreement at
the request of any holder of Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee
is required to decide between alternative causes of action,
construe ambiguous provisions in the Trust Agreement or is unsure
of the application of any provision of the Trust Agreement, and
the matter is not one on which holders of Preferred Securities
are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Company and
if not so directed, shall take such action as it deems advisable
and in the best interests of the holders of the Preferred
Securities and the Common Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to
conduct the affairs of and to operate the Issuer in such a way
that the Issuer will not be deemed to be an "investment company"
required to be registered under the Investment Company Act or
classified other than as a "grantor trust" for United States
Federal income tax purposes and so that the Junior Subordinated
Debentures will be treated as indebtedness of the Company for
United States Federal income tax purposes. In this connection,
the Company and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the
certificate of trust of the Issuer or the Trust Agreement, that
the Company and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the
interests of the holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive or
similar rights.
The Issuer may not borrow money or issue debt or mortgage or
pledge any of its assets.
DESCRIPTION OF THE GUARANTEE
The Guarantee will be executed and delivered by the Company
concurrently with the issuance by the Issuer of the Preferred
Securities for the benefit of the holders from time to time of
the Preferred Securities. The Bank of New York will act as
indenture trustee (the "Guarantee Trustee") under the Guarantee
for the purposes of compliance with the Trust Indenture Act, and
the Guarantee will be qualified as an Indenture under the Trust
Indenture Act. This summary of certain provisions of the
Guarantee does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions
of the Guarantee Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. The form of the
Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Guarantee
Trustee will hold the Guarantee for the benefit of the holders of
the Preferred Securities.
General
The Company will irrevocably agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee
Payments (as defined below) to the holders of the Preferred
Securities, as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert other
than the defense of payment. The following payments with respect
to the Preferred Securities, to the extent not paid by or on
behalf of the Issuer (the "Guarantee Payments"), will be subject
to the Guarantee: (i) any accumulated and unpaid Distributions
required to be paid on the Preferred Securities, to the extent
that the Issuer has funds on hand available therefor, (ii) the
Redemption Price with respect to any Preferred Securities called
for redemption to the extent that the Issuer has funds on hand
available therefor, or (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer (unless the
Junior Subordinated Debentures are distributed to holders of the
Preferred Securities), the lesser of (a) the aggregate of the
Liquidation Preference Amount and all accumulated and unpaid
Distributions on the Preferred Securities to the date of payment
and (b) the amount of assets of the Issuer remaining available
for distribution to holders of the Preferred Securities. The
Company's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Company to the
holders of the Preferred Securities or by causing the Issuer to
pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a
subordinated basis of the Issuer's obligations under the
Preferred Securities, but will apply only to the extent that the
Issuer has funds sufficient to make such payments, and is not a
guarantee of collection.
If the Company does not make interest payments on the Junior
Subordinated Debentures held by the Issuer, it is expected that
the Issuer will not pay Distributions on the Preferred Securities
and will not have funds available therefor. The Guarantee will
rank subordinate and junior in right of payment to all Senior
Debt. See "--Status of the Guarantee". The Guarantee will not
limit the incurrence or issuance of other secured or unsecured
debt of the Company, whether under the Indenture, any other
indenture that the Company may enter into in the future or
otherwise.
The Company has, through the Guarantee, the Trust Agreement,
the Junior Subordinated Debentures, the Indenture and the Expense
Agreement, taken together, fully, irrevocably and unconditionally
guaranteed all of the Issuer's obligations under the Preferred
Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents
constitutes such a guarantee. It is only the combined operation
of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's
obligations under the Preferred Securities. See "Relationship
Among the Preferred Securities, the Junior Subordinated
Debentures and the Guarantee".
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the
Company and will rank subordinate and junior in right of payment
to all Senior Debt.
The Guarantee will rank pari passu with all other guarantees
issued by the Company with respect to any preferred securities
issued by any trust, partnership or other entity which is a
financing vehicle of the Company. The Guarantee will constitute
a guarantee of payment and not of collection (i.e., the
guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other
person or entity). The Guarantee will be held for the benefit of
the holders of the Preferred Securities. The Guarantee will not
be discharged except by payment of the Guarantee Payments in full
to the extent not paid by the Issuer or upon distribution to the
holders of the Preferred Securities of the Junior Subordinated
Debentures. The Guarantee does not place a limitation on the
amount of additional Senior Debt that may be incurred by the
Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Debt.
Amendments and Assignment
Except with respect to any changes that do not materially
adversely affect the rights of holders of the Preferred
Securities (in which case no vote will be required), the
Guarantee may not be amended without the prior approval of the
holders of a majority of the aggregate Liquidation Preference
Amount of the outstanding Preferred Securities. The manner of
obtaining any such approval is set forth under "Description of
the Preferred Securities--Voting Rights; Amendment of Trust
Agreement". All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Company and shall inure to the benefit
of the holders of the Preferred Securities then outstanding.
Events of Default
An event of default under the Guarantee will occur upon the
failure of the Company to perform any of its payment or other
obligations thereunder. The holders of a majority in aggregate
Liquidation Preference Amount 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 the Guarantee or to direct the exercise of any trust
or power conferred upon the Guarantee Trustee under the
Guarantee.
Any holder of the Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights
under the Guarantee without first instituting a legal proceeding
against the Issuer, the Guarantee Trustee or any other person or
entity.
The Company, as guarantor, is required to file annually with
the Guarantee Trustee a certificate as to whether or not the
Company is in compliance with all the conditions and covenants
applicable to it under the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than prior to the occurrence and
after the curing of a default by the Company in performance of
the Guarantee, undertakes to perform only such duties as are
specifically set forth in the Guarantee and, after default with
respect to the Guarantee, must exercise the same degree of care
and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Notwithstanding this
provision, the Guarantee Trustee is under no obligation to
exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and
effect upon full payment of the Redemption Price of the Preferred
Securities, upon full payment of the amounts payable upon
liquidation of the Issuer or upon distribution of the Junior
Subordinated Debentures to the holders of the Preferred
Securities. The Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of
the Preferred Securities must restore payment of any sums paid
under the Preferred Securities or the Guarantee.
Governing Law
The Guarantee will be governed by and construed in accordance
with the laws of the State of New York.
The Expense Agreement
Pursuant to the Expense Agreement entered into by the Company
under the Trust Agreement (the "Expense Agreement"), the Company
will irrevocably and unconditionally guarantee to each person or
entity to whom the Issuer becomes indebted or liable, the full
payment, when and as due, of any costs, expenses or liabilities
of the Issuer, other than obligations of the Issuer to pay to the
holders of the Preferred Securities the amounts due such holders
pursuant to the terms of the Preferred Securities.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued under the
Indenture with terms corresponding to the terms of the Preferred
Securities. This summary of certain terms and provisions of the
Junior Subordinated Debentures and the Indenture does not purport
to be complete and is subject to, and is qualified in its
entirety by reference to, the Indenture, the form of which is
filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and the Trust Indenture Act. Whenever
particular defined terms of the Indenture (as supplemented or
amended from time to time) are referred to herein, such defined
terms are incorporated herein or therein by reference.
General
Concurrently with the issuance of the Preferred Securities,
the Issuer will invest the proceeds thereof and the consideration
paid by the Company for the Common Securities in the Junior
Subordinated Debentures issued by the Company. The Junior
Subordinated Debentures will bear interest at the rate of ____%
per annum of the principal amount thereof, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing _____
__, 1997, to the person in whose name each Junior Subordinated
Debenture is registered, subject to certain exceptions, as of the
close of business on the Business Day (as defined in the
Indenture) next preceding such Interest Payment Date. Each
Junior Subordinated Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the
Preferred Securities. The amount of interest payable for any
period will be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is
payable on the Junior Subordinated Debentures is not a Business
Day, then payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was
originally payable. Interest that is in arrears for more than
one quarter will bear additional interest on the amount thereof
(to the extent permitted by law) at the rate of ___% per annum
thereof, compounded quarterly. The term "interest" as used
herein shall include quarterly interest payments, interest on
quarterly interest payments in arrears and Additional Interest,
as applicable.
The Junior Subordinated Debentures will mature on
____________, _____. The Junior Subordinated Debentures will be
unsecured and will rank junior and be subordinate in right of
payment to all Senior Debt of the Company. Additional series of
debentures (together with the Junior Subordinated Debentures, the
"Indenture Debentures") may be issued, without limitation as to
amount, under the Indenture and the Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the
Company, whether under the Indenture, any other indenture that
the Company may enter into in the future or otherwise. See "--
Subordination".
Option to Extend Interest Payment Period
So long as no Debenture Event of Default under the Indenture
has occurred and is continuing, the Company has the right under
the Indenture at any time during the term of the Junior
Subordinated Debentures to defer the payment of interest at any
time or from time to time for one or more Extension Periods, each
of which, together with all previous and further extensions of
such Extensions Period prior to its termination, may not exceed
20 consecutive quarters and may not extend beyond the maturity of
the Junior Subordinated Debentures. At the end of such Extension
Period, the Company must pay all interest then accrued and unpaid
(together with interest thereon at the rate of _____% per annum
to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of the
Junior Subordinated Debentures will be required to accrue
interest income for United States Federal income tax purposes.
See "Certain United States Federal Income Tax Considerations --
Potential Extension of Interest Payment Period and Original Issue
Discount".
In the event that the Company exercises this right, during
any such Extension Period, the Company may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem
any debt securities (including other Indenture Debentures) that
rank pari passu with or junior in interest to the Junior
Subordinated Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company and (b) payments
under the Guarantee). Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company must
give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its selection of such Extension
Period at least one Business Day prior to the earlier of (i) the
date the Distributions on the Preferred Securities are payable
and (ii) the date the Administrative Trustees are required to
give notice to the NYSE or other applicable self-regulatory
organization or to holders of such the Preferred Securities of
the record date or the date such Distributions are payable, but
in any event not less than one Business Day prior to such record
date. An Administrative Trustee shall give notice of the
Company's election to begin such Extension Period to the holders
of the Preferred Securities within five business days of the
receipt of notice thereof.
Redemption
The Junior Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after ________,
2002, in whole at any time or in part from time to time, at a
redemption price equal to the accrued and unpaid interest on the
Junior Subordinated Debentures so redeemed to the date fixed for
redemption plus 100% of the principal amount thereof, or (ii) at
any time, in whole (but not in part), within 90 days following
the occurrence of a Special Event, at a redemption price equal to
the accrued and unpaid interest on the Junior Subordinated
Debentures so redeemed to the date fixed for redemption plus 100%
of the principal amount thereof.
For so long as the Issuer is the holder of the Junior
Subordinated Debentures, the proceeds of any such redemption will
be used by the Issuer to redeem the Preferred Securities in
accordance with their terms. The Company may not redeem less
than all of Junior Subordinated Debentures unless all accrued and
unpaid interest if any, has been paid in full on all outstanding
Junior Subordinated Debentures for all interest periods
terminating on or prior to the Redemption Date.
Notice of any redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each holder
of Junior Subordinated Debentures to be redeemed at his
registered address. Unless the Company defaults in payment of
the redemption price, on and after the Redemption Date interest
ceases to accrue on the Junior Subordinated Debentures or
portions thereof called for redemption.
Distribution of the Junior Subordinated Debentures
Whether or not a Special Event has occurred, at any time,
the Company has the right to terminate the Issuer, and, in such
event, cause the Junior Subordinated Debentures to be distributed
to the holders of the Preferred Securities in liquidation of the
Issuer after satisfaction of liabilities to creditors of the
Issuer as provided by applicable law. See "Description of the
Preferred Securities -- Liquidation Distribution upon
Termination". If distributed to holders of the Preferred
Securities in liquidation, the Junior Subordinated Debentures
will initially be issued in the form of one or more global
securities and DTC, or any successor depositary for the Preferred
Securities, will act as depositary for the Junior Subordinated
Debentures. It is anticipated that the depositary arrangements
for the Junior Subordinated Debentures would be substantially
identical to those in effect for the Preferred Securities. If
the Junior Subordinated Debentures are distributed to the holders
of the Preferred Securities upon the liquidation of the Issuer,
the Company will use its best efforts to list the Junior
Subordinated Debentures on the NYSE or such other stock exchanges
or other organizations, if any, on which the Preferred Securities
are then listed. There can be no assurance as to the market
price of the Junior Subordinated Debentures that may be
distributed to the holders of the Preferred Securities. For a
description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemption and
other notices and other matters, see "Description of the
Preferred Securities--Book-Entry Issuance".
Debenture Events of Default
The Indenture provides that any one or more of the following
described events with respect to a series of Indenture Debentures
that has occurred and is continuing constitutes a "Debenture
Event of Default" with respect to such series of Indenture
Debentures:
(i) failure for 60 days to pay any interest on such
series of Indenture Debentures, when due and payable (subject
to the deferral of any interest payments in the case of an
Extension Period); or
(ii) failure to pay any principal or premium, if any, on
such series of Indenture Debentures when due and payable; or
(iii) failure to perform, or breach of, any covenant or
warranty of the Company contained in the Indenture for 60
days after written notice to the Company from the Debenture
Trustee or to the Company and the Debenture Trustee by the
holders of at least 33% in aggregate principal amount of such
series of outstanding Indenture Debentures as provided in
the Indenture; or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Company; or
(v) any other Event of Default specified with respect to
such series of Indenture Debentures.
If a Debenture Event of Default due to the default in
payment of principal of, or interest on, any series of Indenture
Debentures or due to the default in the performance or breach of
any other covenant or warranty of the Company applicable to the
Indenture Debentures of such series but not applicable to all
series occurs and is continuing, then either the Debenture
Trustee or the holders of not less than 33% in aggregate
principal amount of the outstanding Indenture Debentures of such
series may declare the principal of all of the Indenture
Debentures of such series and interest accrued thereon to be due
and payable immediately (subject to the subordination provisions
of the Indenture) and, in the case of the Junior Subordinated
Debentures, should the Debenture Trustee or such holders of such
Junior Subordinated Debentures fail to make such declaration, the
holders of at least 33% in aggregate Liquidation Preference
Amount of the Preferred Securities shall have such right. If a
Debenture Event of Default due to the default in the performance
of any other covenants or agreements in the Indenture applicable
to all outstanding Indenture Debentures or due to certain events
of bankruptcy, insolvency or reorganization of the Company has
occurred and is continuing, either the Debenture Trustee or the
holders of not less than 33% in aggregate principal amount of all
outstanding Indenture Debentures (or Preferred Securities, as
described above), considered as one class, and not the holders of
the Indenture Debentures (or Preferred Securities) of any one of
such series may make such declaration of acceleration (subject to
the subordination provisions of the Indenture).
At any time after such a declaration of acceleration with
respect to the Indenture Debentures of any series has been made
and before a judgment or decree for payment of the money due has
been obtained, the Debenture Event or Events of Default giving
rise to such declaration of acceleration will, without further
act, be deemed to have been waived, and such declaration and its
consequences will, without further act, be deemed to have been
rescinded and annulled, if
(a) the Company has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(1) all overdue interest on all Indenture Debentures
of such series;
(2) the principal of and premium, if any, on any
Indenture Debentures of such series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Indenture Debentures;
(3) interest upon overdue interest at the rate or
rates prescribed therefor in such Indenture Debentures, to the
extent that payment of such interest is lawful; and
(4) all amounts due to the Debenture Trustee under the
Indenture;
(b) any other Debenture Event or Events of Default with
respect to Indenture Debentures of such series, other than the
nonpayment of the principal of the Indenture Debentures of such
series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in the
Indenture.
The holders of a majority in aggregate principal amount of
the Indenture Debentures of all series then outstanding may waive
compliance by the Company with certain restrictive provisions of
the Indenture. The holders of a majority in principal amount of
the outstanding Indenture Debentures of any series may, on behalf
of the holders of all the Indenture Debentures of such series,
waive any past default under the Indenture with respect to such
series, except a default in the payment of principal or interest
(unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal due otherwise
than by acceleration has been deposited with the Debenture
Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Indenture Debenture of
such series affected. With respect to the Junior Subordinated
Debentures, the Issuer may not waive compliance by the Company
with certain restrictive provisions of the Indenture or waive any
past defaults thereunder without the consent of a majority in
aggregate liquidation preference amount of the outstanding
Preferred Securities.
The Company is required to file annually with the Debenture
Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it
under the Indenture.
In case a Debenture Event of Default shall occur and be
continuing as to the Junior Subordinated Debentures, the Property
Trustee will have the right to declare the principal of and the
interest on the Junior Subordinated Debentures and any other
amounts payable under the Indenture, to be forthwith due and
payable and to enforce its other rights as a creditor with
respect to the Junior Subordinated Debentures. If the Property
Trustee fails to enforce its rights with respect to the Junior
Subordinated Debentures or the Trust Agreement, a holder of
Preferred Securities may institute a legal proceeding directly
against the Company to enforce the Property Trustee's rights with
respect to the Junior Subordinated Debentures or the Trust
Agreement, to the fullest extent permitted by law, without first
instituting any legal proceeding against the Property Trustee or
any other person. See "Description of the Preferred Securities--
Voting Rights; Amendment of Trust Agreement". Notwithstanding
the foregoing, a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder
of principal of or interest on the Junior Subordinated Debentures
having a principal amount equal to the aggregate liquidation
preference amount of the Preferred Securities of such holder on
or after the due dates specified in the Junior Subordinated
Debentures. See "Description of the Guarantee".
Modification of Indenture
Without the consent of any holder of Indenture Debentures,
the Company and the Debenture Trustee may enter into one or more
supplemental indentures for any of the following purposes: (a)
to evidence the assumption by any permitted successor to the
Company of the covenants of the Company in the Indenture and in
the Indenture Debentures; or (b) to add one or more covenants of
the Company or other provisions for the benefit of the holders of
outstanding Indenture Debentures or to surrender any right or
power conferred upon the Company by the Indenture; or (c) to add
any additional Debenture Events of Default with respect to
outstanding Indenture Debentures; or (d) to change or eliminate
any provision of the Indenture or to add any new provision to the
Indenture, provided that if such change, elimination or addition
will adversely affect the interests of the holders of any series
of Indenture Debentures in any material respect, such change,
elimination or addition will become effective with respect to
such series only (1) when the consent of the holders of Indenture
Debentures of such series has been obtained in accordance with
the Indenture, or (2) when no Indenture Debentures of such series
remain outstanding under the Indenture; or (e) to provide
collateral security for the Indenture Debentures; or (f) to
establish the form or terms of Indenture Debentures of any other
series as permitted by the Indenture; or (g) to provide for the
authentication and delivery of bearer securities and coupons
appertaining thereto representing interest, if any, thereon and
for the procedures for the registration, exchange and replacement
thereof and for the giving of notice to, and the solicitation of
the vote or consent of, the holders thereof, and for any and all
other matters incidental thereto; or (h) to evidence and provide
for the acceptance of appointment of a separate or successor
Debenture Trustee under the Indenture with respect to the
Indenture Debentures of one or more series and to add to or
change any of the provisions of the Indenture as shall be
necessary to provide for or to facilitate the administration of
the trusts under the Indenture by more than one trustee; or (i)
to provide for the procedures required to permit the utilization
of a noncertificated system of registration for the Indenture
Debentures of all or any series; or (j) to change any place where
(1) the principal of and premium, if any, and interest, if any,
on all or any series of Indenture Debentures shall be payable,
(2) all or any series of Indenture Debentures may be surrendered
for registration of transfer or exchange and (3) notices and
demands to or upon the Company in respect of Indenture Debentures
and the Indenture may be served; or (k) to cure any ambiguity or
inconsistency or to add or change any other provisions with
respect to matters and questions arising under the Indenture,
provided such changes or additions shall not adversely affect the
interests of the holders of Indenture Debentures of any series in
any material respect. The Indenture contains provisions
permitting the Company and the Debenture Trustee, with the
consent of the holders of a majority in principal amount of each
outstanding series of Indenture Debentures affected, to modify
the Indenture in a manner affecting the rights of the holders of
such series of the Indenture Debentures; provided, that no such
modification may, without the consent of the holder of each
outstanding Indenture Debenture so affected, (i) change the
Stated Maturity of any series of Indenture Debentures, or reduce
the principal amount thereof, or reduce the rate or extend the
time of payment of interest thereon (except such extension as is
contemplated thereby), (ii) reduce the percentage of principal
amount of Indenture Debentures of any series, the holders of
which are required to consent to any such modification of the
Indenture, or (iii) modify certain of the provisions of the
Indenture relating to supplemental indentures, waivers of certain
covenants and waivers of past defaults with respect to the
Indenture Debentures of any series, without the consent of the
holder of each outstanding Indenture Debentures affected thereby,
provided that, in the case of Junior Subordinated Debentures, so
long as any of the Preferred Securities remain outstanding, no
such modification may be made that adversely affects the holders
of the Preferred Securities, and no termination of the Indenture
may occur, and no waiver of any Debenture Event of Default or
compliance with any covenant under the Indenture may be
effective, without the prior consent of the holders of a majority
of the aggregate Liquidation Preference Amount of such Preferred
Securities unless and until the principal of the Junior
Subordinated Debentures and all accrued and unpaid interest
thereon have been paid in full and certain other conditions are
satisfied.
Certain Covenants of the Company
The Company will covenant in the Indenture that it will not
(i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of
principal, premium, if any, or interest on or repay or repurchase
or redeem any debt securities (including the Indenture
Debentures) that rank pari passu with or junior in interest to
the Indenture Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company, and (b) payments
under the Guarantee and all other guarantees issued by the
Company with respect to any preferred securities issued by any
trust, partnership or other entity which is a financing vehicle
of the Company) if at such time (i) there shall have occurred and
be continuing a payment default (whether before or after
expiration of any period of grace) or a Debenture Event of
Default with respect to any series of Indenture Debentures, (ii)
the Company shall be in default with respect to its payment of
any obligations under the Guarantee or any other such guarantee
as described above or (iii) the Company shall have given notice
of its election of an Extension Period as provided in the
Indenture with respect to any series of Indenture Debentures and
shall not have rescinded such notice, and such Extension Period,
or any extension thereof, shall be continuing.
The Company also will covenant that so long as any Preferred
Securities remain outstanding, if the Issuer shall be required to
pay, with respect to its income derived from the interest
payments on the Junior Subordinated Debentures, any amounts for
or on account of any taxes, duties, assessments or governmental
charges of whatever nature imposed by the United States, or any
other taxing authority, then, in any such case, the Company will
pay as interest on the Junior Subordinated Debentures such
Additional Interest as may be necessary in order that the net
amounts received and retained by the Issuer after the payment of
such taxes, duties, assessments or governmental charges shall
result in the Issuer's having such funds as it would have had in
the absence of the payment of such taxes, duties, assessments or
governmental charges.
The Company will also covenant, (i) to maintain directly or
indirectly 100% ownership of the Common Securities, provided that
certain successors which are permitted pursuant to the Indenture
may succeed to the Company's ownership of the Common Securities,
(ii) not to voluntarily terminate, wind-up or liquidate the
Issuer, except (a) in connection with a distribution of Junior
Subordinated Debentures to the holders of the Preferred
Securities in liquidation of the Issuer, or (b) in connection
with certain mergers, consolidations or amalgamations permitted
by the Trust Agreement, (iii) to remain the sole depositor under
the Trust Agreement of the Issuer and timely perform in all
material respects all of its duties as depositor of the Issuer,
and (iv) to use its reasonable efforts, consistent with the terms
and provisions of the Trust Agreement, to cause the Issuer to
remain a business trust and otherwise continue to be treated as a
"grantor trust" for United States Federal income tax purposes.
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that 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, unless (i) in case the Company consolidates with or
merges into another corporation or conveys or transfers its
properties and assets substantially as an entirety to any person,
the successor corporation is organized under the laws of the
United States or any State or the District of Columbia, and such
successor corporation expressly assumes the Company's obligations
on all Indenture Debentures; (ii) immediately after giving effect
thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event
of Default, shall have occurred and be continuing; and (iii)
certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders
of the Junior Subordinated Debentures protection in the event of
a highly leveraged or other transaction involving the Company
that may adversely affect holders of the Junior Subordinated
Debentures.
Satisfaction And Discharge
The principal amount of Junior Subordinated Debentures will
be deemed to have been paid for purposes of the Indenture and the
entire indebtedness of the Company in respect thereof will be
deemed to have been satisfied and discharged, if there shall have
been irrevocably deposited with the Debenture Trustee or any
Paying Agent, in trust: (a) money in an amount which will be
sufficient, or (b) in the case of a deposit made prior to the
maturity of the Junior Subordinated Debentures, Government
Obligations (as defined herein), which do not contain provisions
permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof,
will provide moneys which, together with the money, if any,
deposited with or held by the Debenture Trustee, will be
sufficient, or (c) a combination of (a) and (b) which will be
sufficient, to pay when due the principal of and premium, if any,
and interest, if any, due and to become due on the Junior
Subordinated Debentures that are outstanding. For this purpose,
Government Obligations include direct obligations of, or
obligations unconditionally guaranteed by, the United States of
America entitled to the benefit of the full faith and credit
thereof and certificates, depositary receipts or other
instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments due
in respect thereof.
Subordination
In the Indenture, the Company has covenanted and agreed that
any Indenture Debentures issued thereunder will be subordinate
and junior in right of payment to all Senior Debt to the extent
provided in the Indenture. Upon any payment or distribution of
assets to creditors upon any liquidation, dissolution, winding-
up, reorganization, assignment for the benefit of creditors,
marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Company, the holders
of Senior Debt will first be entitled to receive payment in full
of principal of (and premium, if any) and interest, if any, on
such Senior Debt before the holders of Indenture Debentures will
be entitled to receive or retain any payment in respect of the
principal of, premium, if any, or interest, if any, on the
Indenture Debentures.
In the event of the acceleration of the maturity of any
Indenture Debentures, the holders of all Senior Debt outstanding
at the time of such acceleration will be entitled to receive
payment in full of all amounts due thereon (including any amounts
due upon acceleration) before the holders of Indenture Debentures
will be entitled to receive any payment upon the principal of,
premium, if any, or interest, if any, on the Indenture
Debentures.
No payments on account of principal, premium, if any, or
interest, if any, in respect of the Indenture Debentures may be
made if there shall have occurred and be continuing a default in
any payment with respect to Senior Debt, or an event of default
with respect to any Senior Debt resulting in the acceleration of
the maturity thereof remaining incurred.
The term Senior Debt is defined in the Indenture to mean all
obligations (other than non-recourse obligations and the
indebtedness issued under the Indenture) of, or guaranteed or
assumed by, the Company for borrowed money, including both senior
and subordinated indebtedness for borrowed money (other than the
Indenture Debentures), or for the payment of money relating to
any lease which is capitalized on the consolidated balance sheet
of the Company and its subsidiaries in accordance with generally
accepted accounting principles as in effect from time to time, or
evidenced by bonds, debentures, notes or other similar
instruments, and in each case, amendments, renewals, extensions,
modifications and refundings of any such indebtedness or
obligations, whether existing as of the date of the Indenture or
subsequently incurred by the Company unless, in the case of any
particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness,
renewal, extension or refunding is not superior in right of
payment to or is pari passu with the Indenture Debentures;
provided that the Company's obligations under the Guarantee and
all other guarantees issued by the Company with respect to any
preferred securities issued by any trust, partnership or other
entity which is a financing vehicle of the Company shall not be
deemed to be Senior Debt.
The Indenture places no limitation on the amount of
additional Senior Debt that may be incurred by the Company. The
Company expects from time to time to incur additional
indebtedness constituting Senior Debt.
Governing Law
The Indenture and the Junior Subordinated Debentures will be
governed by and construed in accordance with the laws of the
State of New York.
Information Concerning the Debenture Trustee
The Debenture Trustee shall have, and shall be subject to,
all the duties and responsibilities specified with respect to an
indenture trustee under the Trust Indenture Act. Subject to such
provisions, the Debenture Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs,
expenses and liabilities which might be incurred thereby. The
Debenture Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably
assured to it.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made
when due on the Junior Subordinated Debentures, such payments
will be sufficient to cover Distributions and other payments due
on the Preferred Securities, primarily because (i) the aggregate
principal amount of the Junior Subordinated Debentures will be
equal to the sum of the aggregate Liquidation Preference Amount
of the Preferred Securities and the Common Securities; (ii) the
interest rate and interest and other payment dates on the Junior
Subordinated Debentures will match the Distribution rate and
Distribution and other payment dates for the Preferred
Securities; (iii) the Company shall pay for all and any costs,
expenses and liabilities of the Issuer except the Issuer's
obligations to holders of the Preferred Securities under such
Preferred Securities; and (iv) the Trust Agreement further
provides that the Issuer will not engage in any activity that is
not consistent with the limited purposes of the Issuer.
Payments of Distributions and other amounts due on the
Preferred Securities (to the extent the Issuer has funds
available for the payment of such Distributions) are irrevocably
guaranteed by the Company as and to the extent set forth under
"Description of the Guarantee". Taken together, the Company's
obligations under the Junior Subordinated Debentures, the
Indenture, the Trust Agreement, the Expense Agreement, and the
Guarantee provide a full, irrevocable and unconditional guarantee
of payments of distributions and other amounts due on the
Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Issuer's
obligations under the Preferred Securities. If and to the extent
that the Company does not make payments on the Junior
Subordinated Debentures, the Issuer will not pay Distributions or
other amounts due on the Preferred Securities. The Guarantee
does not cover payment of Distributions when the Issuer does not
have sufficient funds to pay such Distributions. In such event,
the remedies of holders of the Preferred Securities are as
described above under "Description of the Junior Subordinated
Debentures -- Debenture Events of Default" and "Description of
the Preferred Securities -- Voting Rights; Amendment of Trust
Agreement". The obligations of the Company under the Guarantee
are subordinate and junior in right of payment to all Senior Debt
of the Company.
Notwithstanding anything to the contrary in the Indenture,
the Company has the right to set-off any payment it is otherwise
required to make thereunder with and to the extent the Company
has theretofore made, or is concurrently on the date of such
payment making, a payment under the Guarantee.
A holder of any Preferred Security may institute a legal
proceeding directly against the Company to enforce its rights
under the Guarantee without first instituting a legal proceeding
against the Guarantee Trustee, the Issuer or any other person or
entity.
The Preferred Securities evidence the rights of the holders
thereof to the benefits of the Issuer, and the Issuer exists for
the sole purpose of issuing the Preferred Securities and Common
Securities and investing the proceeds thereof in the Junior
Subordinated Debentures. A principal difference between the
rights of a holder of a Preferred Security and the rights of a
holder of a Junior Subordinated Debenture is that a holder of a
Junior Subordinated Debenture is entitled to receive the
principal amount of and interest accrued on Junior Subordinated
Debentures held, while a holder of Preferred Securities is
entitled to receive Distributions only from the Issuer (or from
the Company under the Guarantee) if and to the extent the Issuer
has funds available for the payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or
liquidation of the Issuer not involving the distribution of the
Junior Subordinated Debentures, after satisfaction of creditors
of the Issuer, if any, as provided by applicable law, the holders
of Preferred Securities will be entitled to receive, out of
assets held by the Issuer, the Liquidation Distribution in cash.
See "Description of the Preferred Securities--Liquidation
Distribution upon Termination". Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the
Property Trustee, as holder of the Junior Subordinated
Debentures, would be a subordinated creditor of the Company,
subordinated in right of payment to all Senior Debt, but entitled
to receive payment in full of principal and interest, before any
stockholders of the Company receive payments or distributions.
Since the Company is the guarantor under the Guarantee and has
agreed to pay for all costs, expenses and liabilities of the
Issuer (other than the Issuer's obligations to the holders of the
Preferred Securities), the positions of a holder of Preferred
Securities and a holder of Junior Subordinated Debentures
relative to other creditors and to stockholders of the Company in
the event of liquidation or bankruptcy of the Company would be
substantially the same.
A default or event of default under any Senior Debt would not
constitute a default or Debenture Event of Default. However, in
the event of payment defaults under, or acceleration of, Senior
Debt, the subordination provisions of the Indenture provide that
no payments may be made in respect of the Junior Subordinated
Debentures until such Senior Debt has been paid in full or any
payment default thereunder has been cured or waived. Failure to
make required payments on any Junior Subordinated Debentures
would constitute a Debenture Event of Default.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain United States
Federal income tax consequences relevant to the purchase,
ownership and disposition of the Preferred Securities as of the
date hereof and represents the opinion of Reid & Priest LLP,
counsel to the Company, insofar as it relates to matters of law
or legal conclusions. Except where noted, it deals only with the
Preferred Securities held as capital assets and does not deal
with special situations, such as those of dealers in securities
or currencies, financial institutions, life insurance companies,
persons holding the Preferred Securities as part of a hedging or
conversion transaction or a straddle, United States Holders (as
defined herein) whose "functional currency" is not the United
States dollar, or persons who are not United States Holders. In
addition, this discussion does not address the tax consequences
to persons who purchase the Preferred Securities other than
pursuant to their initial issuance and distribution.
Furthermore, the discussion below is based upon the provisions of
the Internal Revenue Code of 1986, as amended, and regulations,
rulings and judicial decisions thereunder as of the date hereof,
and such authorities may be repealed, revoked or modified at any
time so as to result in United States Federal income tax
consequences different from those discussed below. These
authorities are subject to various interpretations and it is
therefore possible that the United States Federal income tax
treatment of the Preferred Securities may differ from the
treatment described below.
<PAGE>
PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES, INCLUDING
PERSONS WHO ARE NOT UNITED STATES HOLDERS AND PERSONS WHO
PURCHASE PREFERRED SECURITIES IN THE SECONDARY MARKET, ARE
ADVISED TO CONSULT WITH THEIR TAX ADVISORS AS TO THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF PREFERRED SECURITIES IN LIGHT OF THEIR
PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE,
LOCAL OR OTHER TAX LAWS.
United States Holders
As used herein, a "United States Holder" means a Preferred
Security holder that is a citizen or a resident of the United
States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or any
political subdivision thereof, or an estate or trust the income
of which is subject to United States Federal income taxation
regardless of its source.
Classification of Entergy Gulf States Capital I
Reid & Priest LLP, counsel to the Company and the Issuer, is
of the opinion that, under current law and assuming full
compliance with the terms of the Indenture and the instruments
establishing the Issuer (and certain other documents), the Issuer
will be classified as a "grantor trust" for United States Federal
income tax purposes and will not be classified as an association
taxable as a corporation. Each United States Holder will be
treated as owning an undivided beneficial interest in the Junior
Subordinated Debentures. Accordingly, each United States Holder
will be required to include in its gross income interest (in the
form of original issue discount ("OID")) accrued with respect to
its allocable share of the Junior Subordinated Debentures as
described below. No amount included in income with respect to
the Preferred Securities will be eligible for the dividends
received deduction. Investors should be aware that the opinion
of Reid & Priest LLP is not binding on the Internal Revenue
Service (the "IRS") or the courts.
Classification of the Junior Subordinated Debentures
Based on the advice of its counsel, the Company believes and
intends to take the position that the Junior Subordinated
Debentures will constitute indebtedness for United States Federal
income tax purposes. No assurance can be given that such
position will not be challenged by the IRS, or, if challenged,
that such challenge will not be successful. By purchasing and
accepting the Preferred Securities, each holder thereof covenants
to treat the Junior Subordinated Debentures as indebtedness and
the Preferred Securities as evidence of an indirect beneficial
ownership in the Junior Subordinated Debentures. The remainder
of this discussion assumes that the Junior Subordinated
Debentures will be classified as indebtedness of the Company for
United States Federal income tax purposes.
Possible Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill of 1996
(the "Bill"), the revenue portion of President Clinton's budget
proposal, was released. The Bill would, among other things,
generally have denied interest deductions for interest on an
instrument issued by a corporation that has a maximum weighted
average maturity of more than 40 years. The Bill would also
generally have treated as equity an instrument, issued by a
corporation, that has a maximum term of more than 20 years and
that is not shown as indebtedness on the separate balance sheet
of the issuer or, where the instrument is issued to a related
party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. The
above-described provisions were proposed to be effective
generally for instruments issued on or after December 7, 1995.
If either provision were to apply to the Junior Subordinated
Debentures, the Company would be unable to deduct interest on the
Junior Subordinated Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance and House Ways and Means
Committees issued a joint statement to the effect that it was
their intention that the effective date of the President's
legislative proposals, if adopted, will be no earlier than the
date of appropriate Congressional action. The 104th Congress
adjourned without such action having been taken. There can be no
assurance, however, that future legislative proposals or final
legislation will not affect the ability of the Company to deduct
interest on the Junior Subordinated Debentures. If legislation
were enacted limiting, in whole or in part, the deductibility by
the Company of interest on the Junior Subordinated Debentures for
United States Federal income tax purposes, such enactment could
give rise to a Tax Event. A Tax Event would permit the Company
to cause a redemption of the Preferred Securities as described
more fully under "Description of the Preferred Securities--
Redemption--Special Event Redemption or Distribution of Junior
Subordinated Debentures".
Potential Extension of Interest Payment Period and Original Issue
Discount
Under the terms of the Junior Subordinated Debentures, the
Company has the option to defer payments of interest for up to 20
consecutive quarterly interest payment periods and to pay as a
lump sum at the end of such period all of the interest that has
accrued during such period. During any such Extension Period,
Distributions on the Preferred Securities will also be deferred.
Because of this option to extend the interest payment periods,
the Junior Subordinated Debentures will be treated as having been
issued with OID for United States Federal income tax purposes.
As a result, United States Holders will be required to accrue
interest income (in the form of OID) on an economic accrual basis
even if they use the cash method of accounting. In the event of
an Extension Period, a United States Holder will be required to
continue to include OID in income notwithstanding that the Issuer
will not make any Distribution on the Preferred Securities during
such Extension Period. As a result, any United States Holder who
disposes of the Preferred Securities prior to the record date for
the payment of Distributions following such Extension Period will
include interest in gross income but will not receive any
Distributions related thereto from the Issuer. The tax basis of
a Preferred Security will be increased by the amount of any OID
that is included in income, and will be decreased when and if
Distributions are subsequently received from the Issuer by such
holders.
Receipt of the Junior Subordinated Debentures or Cash Upon
Liquidation of the Issuer
At any time, the Company has the right to cause the Junior
Subordinated Debentures to be distributed to holders of the
Preferred Securities in exchange for the Preferred Securities and
in liquidation of the Issuer. Under current law, for United
States Federal income tax purposes, if the Issuer is treated as a
"grantor trust" at the time of distribution, such distribution
would be treated as a non-taxable event to each United States
Holder, and each United States Holder would receive an aggregate
tax basis in the Junior Subordinated Debentures equal to such
holder's aggregate tax basis in the Preferred Securities. A
United States Holder's holding period for the Junior Subordinated
Debentures received in liquidation of the Issuer would include
the period during which such holder held the Preferred
Securities.
Under certain circumstances, as described under the caption
"Description of the Preferred Securities--Redemption," the Junior
Subordinated Debentures may be redeemed for cash and the proceeds
of such redemption distributed to holders of the Preferred
Securities in redemption of the Preferred Securities. Under
current law, such a redemption would, for United States Federal
income tax purposes, constitute a taxable disposition of the
Preferred Securities, and a United States Holder would recognize
gain or loss as if such holder had sold such redeemed Preferred
Securities. See "--Sale, Exchange and Redemption of the
Preferred Securities" below.
Sale, Exchange and Redemption of the Preferred Securities
Upon the sale, exchange or redemption of the Preferred
Securities, a United States Holder will recognize gain or loss
equal to the difference between the amount realized upon the
sale, exchange or redemption and such holder's adjusted tax basis
in the Preferred Securities. A United States Holder's adjusted
tax basis will, in general, be the issue price of the Preferred
Securities, increased by the OID previously included in income by
the United States Holder and reduced by any Distributions on the
Preferred Securities. Such gain or loss will be capital gain or
loss and will be long-term capital gain or loss if at the time of
sale, exchange or redemption, the Preferred Securities have been
held for more than one year. Under current law, net capital
gains of individuals are, under certain circumstances, taxed at
lower rates than items of ordinary income. The deductibility of
capital losses is subject to limitations.
Information Reporting and Backup Withholding
Subject to the qualification discussed below, income on the
Preferred Securities will be reported to holders on Form 1099,
which should be mailed to such holders by January 31 following
each calendar year.
The Issuer will report annually to Cede & Co., as holder of
record of the Preferred Securities, the OID related to the Junior
Subordinated Debentures that accrued during the year. The Issuer
currently intends to report such information on Form 1099 prior
to January 31 following each calendar year. The Underwriters
have indicated to the Issuer that, to the extent that they hold
the Preferred Securities as nominees for beneficial holders, they
currently expect to report the OID that accrued during the
calendar year on such Preferred Securities to such beneficial
holders on Form 1099 by January 31 following each calendar year.
Under current law, holders of the Preferred Securities who hold
as nominees for beneficial holders will not have any obligation
to report information regarding the beneficial holders to the
Issuer. The Issuer, moreover, will not have any obligation to
report to beneficial holders who are not also record holders.
Thus, beneficial holders of the Preferred Securities who hold
their Preferred Securities through the Underwriters will receive
Forms 1099 reflecting the income on their Preferred Securities
from such Underwriters rather than from the Issuer.
Payments made in respect of, and proceeds from the sale of,
the Preferred Securities (or the Junior Subordinated Debentures
distributed to holders of the Preferred Securities) may be
subject to "backup" withholding tax of 31% unless the holder
complies with certain identification requirements or if such
holder has previously failed to report in full dividend and
interest income. Any withheld amounts will be allowed as a
refund or a credit against the holder's United States Federal
income tax liability, provided the required information is
provided to the IRS.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, the Company and the Issuer have agreed that the Issuer
will sell to each of the Underwriters named below, and each of
such Underwriters, for whom Goldman, Sachs & Co.,
__________________________ and _________________________ are
acting as representatives, has severally agreed to purchase from
the Issuer the respective number of Preferred Securities set
forth opposite its name below:
Number of
Preferred
Underwriter Securities
----------------------- -----------
Goldman, Sachs & Co.
Total ............................ ____________
Subject to the terms and conditions set forth in the
Underwriting Agreement, the Underwriters are committed to take
and pay for all such Preferred Securities offered hereby, if any
are taken, provided, that under certain circumstances involving a
default of one or more Underwriters, less than all of the
Preferred Securities may be purchased. Default by one
Underwriter would not relieve any non-defaulting Underwriter from
its several obligation, and in the event of such a default, the
non-defaulting Underwriters may be required by the Company to
purchase the Preferred Securities that it has severally agreed to
purchase and, in addition, to purchase the Preferred Securities
that the defaulting Underwriter or Underwriters shall have failed
to purchase up to an amount equal to one-ninth of the Preferred
Securities that such non-defaulting Underwriter or Underwriters
have otherwise agreed to purchase.
The Underwriters propose to offer the Preferred Securities in
part directly to the public at the initial public offering price
set forth on the cover page of this Prospectus, and in part to
certain securities dealers at such price less a concession of
$_______ per Preferred Security. The Underwriters may allow, and
such dealers may reallow, a concession not to exceed of $_______
per Preferred Security to certain brokers and dealers. After the
Preferred Securities are released for sale to the public, the
offering price and other selling terms may from time to time be
varied by the representatives.
In view of the fact that the proceeds from the sale of the
Preferred Securities will be used to purchase the Junior
Subordinated Debentures, the Underwriting Agreement provides that
the Company will pay as Underwriters' Compensation for the
Underwriters arranging the investment therein of such proceeds an
amount of $ _______ per Preferred Security ($____________ per
Preferred Security sold to certain institutions) for the accounts
of the several Underwriters.
The Company and the Issuer have agreed that, during the
period beginning from the date of the Underwriting Agreement and
continuing to and including the earlier of (i) the termination of
trading restrictions on the Preferred Securities, as determined
by the Underwriters, and (ii) 30 days after the closing date,
they will not offer, sell, contract to sell or otherwise dispose
of any Preferred Securities, any other beneficial interests in
the assets of the Issuer, or any preferred securities or any
other securities of the Issuer or the Company that are
substantially similar to the Preferred Securities, including any
guarantee of such securities, or any securities convertible into
or exchangeable for or that represent the right to receive
securities, preferred securities or any such substantially
similar securities of either the Issuer or the Company, without
the prior written consent of the representatives, except for the
Preferred Securities, the Common Securities and the Guarantee.
Prior to this offering, there has been no public market for
the Preferred Securities. Application will be made to list the
Preferred Securities on the NYSE. In order to meet one of the
requirements for listing the Preferred Securities on the NYSE,
the Underwriters will undertake to sell lots of 100 or more
Preferred Securities to a minimum of 400 beneficial holders.
Trading of the Preferred Securities on the NYSE is expected to
commence within a seven-day period after the initial delivery of
the Preferred Securities. The representatives of the
Underwriters have advised the Company that they intend to make a
market in the Preferred Securities prior to commencement of
trading on the NYSE, but are not obligated to do so and may
discontinue market making at any time without notice. No
assurance can be given as to the liquidity of the trading market
for the Preferred Securities.
The Company and the Issuer have agreed to indemnify the
several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or to
contribute to payments that the Underwriters may be required to
make in respect thereof.
Certain of the Underwriters or their affiliates have provided
from time to time, and expect to provide in the future,
investment or commercial banking services to the Company and its
affiliates, for which such Underwriters or their affiliates have
received or will receive customary fees and commissions.
EXPERTS
The Company's balance sheets as of December 31, 1995 and
1994 and the statements of income (loss), retained earnings, and
cash flows for each of the three years in the period ended
December 31, 1995, included in this Prospectus, have been
included herein in reliance on the report, which include emphasis
paragraphs related to rate-related contingencies, legal
proceedings and changes in accounting for income taxes, post
retirement benefits and unbilled revenues, of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that
firm as experts in accounting and auditing.
The statements attributed to Clark, Thomas & Winters, a
Professional Corporation, as to legal conclusions with respect to
the Company's rate regulation in Texas in Note 2, "Rate and
Regulatory Matters", to the Interim Financial Statements and in
Note 2, "Rate and Regulatory Matters", to the Annual Financial
Statements have been reviewed by such firm and are included
herein upon the authority of such firm as experts.
The statements attributed to Sandlin Associates regarding
the analysis of River Bend construction costs of the Company in
Note 2 "Rate and Regulatory Matters", to the Interim Financial
Statements and in Note 2, "Rate and Regulatory Matters", to the
Annual Financial Statements have been reviewed by such firm and
are included herein upon the authority of such firm as experts.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of
the Preferred Securities, the enforceability of the Trust
Agreement and the creation of the Issuer are being passed upon by
Richards, Layton & Finger, P.A., special Delaware counsel to the
Company and the Issuer. The validity of the Guarantee and the
Junior Subordinated Debentures will be passed upon for the
Company by Laurence M. Hamric, Esq., General Attorney - Corporate
and Securities of Entergy Services, Inc., and by Reid & Priest
LLP, New York counsel to the Company. Matters pertaining to New
York law will be passed upon by Reid & Priest LLP, New York
counsel to the Company, and matters pertaining to Texas law will
be passed upon by Laurence M. Hamric, Esq., General Attorney-
Corporate and Securities of Entergy Services, Inc. Certain legal
matters will be passed upon for the Underwriters by Winthrop,
Stimson, Putnam & Roberts, New York, New York. Certain matters
relating to United States Federal income tax considerations are
being passed upon by Reid & Priest LLP, special counsel to the
Company and the Issuer.
ENTERGY GULF STATES, INC.
(FORMERLY GULF STATES UTILITIES COMPANY)
INDEX TO THE FINANCIAL STATEMENTS
Page
Definitions F-2
Annual Financial Statements:
Report of Independent Accountants F-4
Balance Sheets as of December 31, 1995 and 1994 F-6
Statements of Income (Loss) for the years ended F-8
December 31, 1995, 1994, and 1993
Statements of Cash Flows for the years ended F-9
December 31, 1995, 1994, and 1993
Statements of Retained Earnings and Paid-In-Capital F-10
Notes to Financial Statements F-11
Interim Financial Statements:
Balance Sheets (Unaudited) as of September 30, 1996 F-37
and December 31, 1995
Statements of Income (Loss) (Unaudited) for the three F-39
and nine month periods ended September 30, 1996
and 1995
Statements of Cash Flows (Unaudited) for the nine F-40
month periods ended September 30, 1996 and 1995
Notes to the Interim Financial Statements (Unaudited) F-41
<PAGE>
DEFINITIONS
Certain abbreviations or acronyms used in the text and notes
are defined below:
Abbreviation or Acronym Term
AFUDC Allowance for Funds Used During Construction
ALJ Administrative Law Judge
Cajun Cajun Electric Power Cooperative, Inc.
D.C. Circuit Court United States Court of Appeals for the District of
Columbia Circuit
DOE United States Department of Energy
Entergy Arkansas Entergy Arkansas, Inc., formerly Arkansas Power
& Light Company
Entergy Gulf States Entergy Gulf States, Inc., formerly Gulf States
Utilities Company
Entergy Louisiana Entergy Louisiana, Inc., formerly Louisiana Power
& Light Company
Entergy Mississippi Entergy Mississippi, Inc., formerly Mississippi
Power & Light Company
Entergy New Orleans Entergy New Orleans, Inc., formerly New Orleans
Public Service, Inc.
EPAct Energy Policy Act of 1992
EPA Environmental Protection Agency
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
KWh kilowatt-hour(s)
LPSC Louisiana Public Service Commission
Merger The combination transaction, consummated on
December 31, 1993, by which Entergy Gulf States
became a subsidiary of Entergy Corporation and
Entergy Corporation became a Delaware corporation
Nelson Unit 6 Unit No. 6 (coal) of the Nelson Steam Electric
Generating Station, owned 70% by Entergy Gulf
States
NISCO Nelson Industrial Steam Company
Operating Companies Entergy Arkansas, Entergy Gulf States, Entergy
Louisiana, Entergy Mississippi, and Entergy New
Orleans
PRP Potentially Responsible Party (a person or entity
that may be responsible for remediation of
environmental contamination)
PUCT Public Utility Commission of Texas
PUHCA Public Utility Holding Company Act of 1935, as
amended
PURPA Public Utility Regulatory Policies Act
Rate Cap The level of Entergy Gulf States' retail electric
base rates in effect at December 31, 1993, for the
Louisiana retail jurisdiction, and the level of
such rates in effect prior to the settlement
agreement with the PUCT on July 21, 1994, for the
Texas retail jurisdiction, which may not be
exceeded before December 31, 1998
River Bend River Bend Steam Electric Generating Station
(nuclear), owned 70% by Entergy Gulf States
RUS Rural Utilities Services (formerly the Rural
Electrification Administration or "REA")
SEC Securities and Exchange Commission
System Agreement Agreement, effective January 1, 1983, as
modified, among Entergy Arkansas, Entergy Gulf
States, Entergy Louisiana, Entergy Mississippi
and Entergy New Orleans, all wholly owned
subsidiaries of Entergy Corporation, relating
to the sharing of generating capacity and other
power resources
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Gulf States Utilities Company
We have audited the accompanying balance sheets of Gulf States
Utilities Company as of December 31, 1995 and 1994 and the related
statements of income (loss), retained earnings and paid-in-capital and
cash flows for each of the three years in the period ended December 31,
1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of December 31, 1995 and 1994, and the results of its operations and
its cash flows for each of the three years in the period ended December
31, 1995 in conformity with generally accepted accounting principles.
As discussed in Note 2 to the financial statements, the net amount
of capitalized costs for its River Bend Unit I Nuclear Generating Plant
(River Bend) exceed those costs currently being recovered through
rates. At December 31, 1995, approximately $482 million is not
currently being recovered through rates. If current regulatory and
court orders are not modified, a write-off of all or a portion of such
costs may be required. Additionally, other rate-related contingencies
exist which may result in refunds of revenues previously collected.
The extent of such write-off of capitalized River Bend costs or refunds
of revenues previously collected, if any, will not be determined until
appropriate rate proceedings and court appeals have been concluded.
Accordingly, the accompanying financial statements do not include any
adjustments or provision for write-off or refund that might result from
the outcome of these uncertainties. As also discussed in Note 2,
approximately $187 million of additional deferred River Bend operating
costs which exceed those costs currently being recovered through rates
are expected to be written-off upon the adoption of Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
Adoption of this Statement is required on January 1, 1996.
As discussed in Note 8 to the financial statements, civil actions
have been initiated against Gulf States Utilities Company to, among
other things, recover the co-owner's investment in River Bend and to
annul the River Bend Joint Ownership Participation and Operating
Agreement. The ultimate outcome of these proceedings cannot presently
be determined.
As discussed in Note 13 to the financial statements, the common
stock of the Company was acquired on December 31, 1993.
As discussed in Note 3 to the financial statements, in 1993, the
Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." As discussed in Note 10 to the
financial statements, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," as of January 1, 1993. As discussed in
Note 1 to the financial statements, as of January 1, 1993, the Company
began accruing revenues for energy delivered to customers but not yet
billed.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
February 14, 1996
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
ASSETS
December 31,
1995 1994
(In Thousands)
<S> <C> <C>
Utility Plant:
Electric $6,942,983 $6,842,726
Natural gas 45,789 44,505
Steam products 77,551 77,307
Property under capital leases 77,918 82,914
Construction work in progress 148,043 96,176
Nuclear fuel under capital lease 69,853 80,042
---------- ----------
Total 7,362,137 7,223,670
Less - accumulated depreciation and amortization 2,664,943 2,504,826
---------- ----------
Utility plant - net 4,697,194 4,718,844
---------- ----------
Other Property and Investments:
Decommissioning trust fund 32,943 21,309
Other - at cost (less accumulated depreciation) 28,626 29,315
---------- ----------
Total 61,569 50,624
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 13,751 8,063
Temporary cash investments - at cost,
which approximates market:
Associated companies 46,336 5,085
Other 174,517 91,496
---------- ----------
Total cash and cash equivalents 234,604 104,644
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.6 million in 1995 and $0.7 million in 1994) 110,187 167,745
Associated companies 1,395 12,732
Other 15,497 20,706
Accrued unbilled revenues 73,381 39,470
Deferred fuel costs 31,154 6,314
Accumulated deferred income taxes 43,465 49,457
Fuel inventory 32,141 25,784
Materials and supplies - at average cost 91,288 90,054
Rate deferrals 97,164 100,478
Prepayments and other 15,566 13,754
---------- ----------
Total 745,842 631,138
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 419,904 506,974
SFAS 109 regulatory asset-net 453,628 426,358
Unamortized loss on reacquired debt 61,233 63,994
Other regulatory assets 27,836 35,168
Long-term receivables 224,727 264,752
Other 169,125 145,609
---------- ----------
Total 1,356,453 1,442,855
---------- ----------
TOTAL $6,861,058 $6,843,461
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
BALANCE SHEETS
CAPITALIZATION AND LIABILITIES
December 31,
1995 1994
(In Thousands)
<S. <C> <C>
Capitalization:
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares in 1995 and 1994 $114,055 $114,055
Paid-in capital 1,152,505 1,152,336
Retained earnings 357,704 264,626
---------- ----------
Total common shareholder's equity 1,624,264 1,531,017
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 87,654 94,934
Long-term debt 2,175,471 2,318,417
---------- ----------
Total 4,173,833 4,230,812
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 108,078 125,691
Other 78,245 68,753
---------- ----------
Total 186,323 194,444
---------- ----------
Current Liabilities:
Currently maturing long-term debt 145,425 50,425
Accounts payable:
Associated companies 31,349 31,722
Other 136,528 140,975
Customer deposits 21,983 22,216
Taxes accrued 37,413 12,478
Interest accrued 56,837 55,327
Nuclear refueling reserve 22,627 10,117
Obligations under capital lease 37,773 37,265
Reserve for rate refund - 56,972
Other 86,653 111,963
---------- ----------
Total 576,588 529,460
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 1,177,144 1,100,396
Accumulated deferred investment tax credits 208,618 199,428
Deferred River Bend finance charges 58,047 82,406
Other 480,505 506,515
---------- ----------
Total 1,924,314 1,888,745
---------- ----------
Commitments and Contingencies (Notes 2, 8, and 9)
TOTAL $6,861,058 $6,843,461
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF INCOME (LOSS)
For the Years Ended December 31,
1995 1994 1993
(In Thousands)
<S> <C> <C> <C>
Operating Revenues:
Electric $1,788,964 $1,719,201 $1,747,961
Natural gas 23,715 31,605 32,466
Steam products 49,295 46,559 47,193
---------- ---------- ----------
Total 1,861,974 1,797,365 1,827,620
---------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 516,812 517,177 559,416
Purchased power 169,767 192,937 123,949
Nuclear refueling outage expenses 10,607 12,684 10,706
Other operation and maintenance 432,647 505,701 469,664
Depreciation, amortization, and decommissioning 202,224 197,151 190,405
Taxes other than income taxes 102,228 98,096 95,742
Income taxes 57,235 (6,448) 46,007
Amortization of rate deferrals 66,025 66,416 61,115
---------- ---------- ----------
Total 1,557,545 1,583,714 1,557,004
---------- ---------- ----------
Operating Income 304,429 213,651 270,616
---------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 1,125 1,334 726
Write-off of plant held for future use - (85,476) -
Miscellaneous - net 22,573 (64,843) 19,996
Income taxes (6,009) 55,638 (12,009)
---------- ---------- ----------
Total 17,689 (93,347) 8,713
---------- ---------- ----------
Interest Charges:
Interest on long-term debt 191,341 195,414 202,235
Other interest - net 8,884 8,720 8,364
Allowance for borrowed funds used
during construction (1,026) (1,075) (731)
---------- ---------- ----------
Total 199,199 203,059 209,868
---------- ---------- ----------
Income (Loss) before Extraordinary Items and
the Cumulative Effect of an Accounting Change 122,919 (82,755) 69,461
Extraordinary Items (net of income taxes) - - (1,259)
Cumulative Effect of an Accounting
Change (net of income taxes) - - 10,660
---------- ---------- ----------
Net Income (Loss) 122,919 (82,755) 78,862
Preferred and Preference Stock
Dividend Requirements and Other 29,643 29,919 35,581
---------- ---------- ----------
Earnings (Loss) Applicable to Common Stock $ 93,276 ($ 112,674) $ 43,281
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1995 1994 1993
(In Thousands)
<S> <C> <C> <C>
Operating Activities:
Net income (loss) $122,919 ($82,755) $78,862
Noncash items included in net income:
Extraordinary items - - 1,259
Cumulative effect of a change in accounting principle - - (10,660)
Change in rate deferrals 66,025 96,979 61,115
Depreciation, amortization, and decommissioning 202,224 197,151 190,405
Deferred income taxes and investment tax credits 63,231 (62,171) 41,302
Allowance for equity funds used during construction (1,125) (1,334) (726)
Write-off of plant held for future use - 85,476 -
Changes in working capital:
Receivables 40,193 (72,341) 6,879
Fuel inventory (6,357) (2,336) (2,289)
Accounts payable (4,820) 60,112 11,072
Taxes accrued 24,935 (10,378) 3,764
Interest accrued 1,510 (4,189) (2,497)
Reserve for rate refund (56,972) 56,972 -
Other working capital accounts (40,919) 33,781 (9,915)
Decommissioning trust contributions (8,147) (3,202) (2,710)
Purchased power settlement - - (169,300)
Provision for estimated losses and reserves 10,119 4,181 20,349
Other (12,062) 30,413 38,525
--------- --------- ---------
Net cash flow provided by operating activities 400,754 326,359 255,435
--------- --------- ---------
Investing Activities:
Construction expenditures (185,944) (155,989) (115,481)
Allowance for equity funds used during construction 1,125 1,334 726
Nuclear fuel purchases (1,425) (31,178) (2,118)
Proceeds from sale/leaseback of nuclear fuel 542 29,386 2,118
Refund of escrow account and other property - - 5,921
--------- --------- ---------
Net cash flow used in investing activities (185,702) (156,447) (108,834)
--------- --------- ---------
Financing Activities:
Proceeds from the issuance of:
First mortgage bonds - - 338,379
Other long-term debt 2,277 101,109 21,440
Preference stock - - 146,625
Retirement of:
First mortgage bonds - - (360,199)
Other long-term debt (50,425) (102,425) (18,398)
Redemption of preferred and preference stock (7,283) (6,070) (174,841)
Dividends paid:
Common stock - (289,100) -
Preferred and preference stock (29,661) (30,131) (35,999)
--------- --------- ---------
Net cash flow used in financing activities (85,092) (326,617) (82,993)
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents 129,960 (156,705) 63,608
Cash and cash equivalents at beginning of period 104,644 261,349 197,741
--------- --------- ---------
Cash and cash equivalents at end of period $234,604 $104,644 $261,349
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $187,918 $191,850 $197,058
Income taxes $208 $251 $15,600
Noncash investing and financing activities:
Capital lease obligations incurred - $31,178 $17,143
Change in unrealized appreciation/depreciation of
decommissioning trust assets $2,121 ($915) -
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GULF STATES UTILITIES COMPANY
STATEMENTS OF RETAINED EARNINGS AND PAID-IN CAPITAL
For the Years Ended December 31,
1995 1994 1993
(In Thousands)
<S> <C> <C> <C>
Retained Earnings, January 1 $264,626 $666,401 $631,462
Add:
Net income (loss) 122,919 (82,755) 78,862
---------- ---------- ---------
Total 387,545 583,646 710,324
---------- ---------- ---------
Deduct:
Dividends declared:
Preferred and preference stock 29,482 29,831 35,581
Common stock - 289,100 -
Preferred and preference stock
redemption and other 359 89 8,342
---------- ---------- ---------
Total 29,841 319,020 43,923
---------- ---------- ---------
Retained Earnings, December 31 (Note 7) $357,704 $264,626 $666,401
========== ========== =========
Paid-in Capital, January 1 $1,152,336 $1,152,304 $67,316
Add:
Issuance of 100 shares of no par common
stock with a stated value of $114,055
net of the retirement of 114,055,065 shares
of no par common stock - - 1,086,868
Gain (loss) on reacquisition of
preferred and preference stock 169 32 (1,880)
---------- ---------- ----------
Paid-in Capital, December 31 $1,152,505 $1,152,336 $1,152,304
========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
GULF STATES UTILITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the
accounts of the Company and its direct subsidiaries Varibus
Corporation, Prudential Oil and Gas, Inc., GSG&T, and Southern Gulf
Railway Company. All significant intercompany transactions have been
eliminated. The Company and its subsidiaries maintain accounts in
accordance with FERC and other regulatory guidelines. Certain
previously reported amounts have been reclassified to conform to
current classifications with no effect on net income or shareholder's
equity. The Company became a wholly-owned subsidiary of Entergy
Corporation through the Merger which was consummated on December 31,
1993.
Use of Estimates in the Preparation of Financial Statements
The preparation of the Company and its subsidiaries' financial
statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of December 31, 1995 and 1994, and
the reported amounts of revenues and expenses during fiscal years 1995,
1994, and 1993. Adjustments to the reported amounts of assets and
liabilities may be necessary in the future to the extent that future
estimates or actual results are different from the estimates used in
1995 financial statements.
Revenues and Fuel Costs
The Company generates, transmits, and distributes electricity
primarily to retail customers in the States of Texas and Louisiana;
distributes gas at retail in the City of Baton Rouge, Louisiana, and
vicinity; and also sells steam to a large refinery complex in Baton
Rouge.
The Company accrues estimated revenues for energy delivered since
the latest billings. However, prior to January 1, 1993, the Company
recognized electric and gas revenues when billed. To provide a better
matching of revenues and expenses, effective January 1, 1993, the
Company adopted a change in accounting principle to provide for the
accrual of estimated unbilled revenues. In accordance with a LPSC rate
order, the Company recorded a deferred credit of $16.6 million for the
January 1, 1993, amount of unbilled revenues. See Note 2 herein
regarding the Company's subsequent appeals of the LPSC order regarding
deferred unbilled revenues.
The Company's Texas retail rate schedules include a fixed fuel
factor approved by the PUCT, which remains in effect until changed as
part of a general rate case, fuel reconciliation, or fixed fuel factor
filing.
Utility Plant
Utility plant is stated at original cost. The original cost of
utility plant retired or removed, plus the applicable removal costs,
less salvage, is charged to accumulated depreciation. Maintenance,
repairs, and minor replacement costs are charged to operating expenses.
Substantially all of the utility plant is subject to liens of the
Company's mortgage bond indentures.
Net electric utility plant in service, by functional category, as
of December 31, 1995 (excluding owned and leased nuclear fuel and the
plant acquisition adjustment related to the Merger), is shown below:
Production Transmission Distribution Other Total
(In Millions)
$ 3,110 $ 430 $ 725 $ 179 $4,444
Depreciation is computed on the straight-line basis at rates based
on the estimated service lives and costs of removal of the various
classes of property. The depreciation rate on average depreciable
property was 2.7% for 1995, 1994 and 1993.
AFUDC represents the approximate net composite interest cost of
borrowed funds and a reasonable return on the equity funds used for
construction. Although AFUDC increases both utility plant and
earnings, it is only realized in cash through depreciation provisions
included in rates.
Jointly-Owned Generating Stations
The Company owns undivided interests in several jointly-owned
electric generating facilities and records the investments and expenses
associated with these generating stations to the extent of its
respective ownership interests. As of December 31, 1995, the Company's
investment and accumulated depreciation in each of these generating
stations were as follows:
Total
Megawatt Accumulated
Generating Station Fuel Type Capability Ownership Investment Depreciation
(In Thousands)
River Bend Unit 1 Nuclear 936 70.00% $3,067,996 $ 670,020
Roy S. Nelson Unit 6 Coal 550 70.00% 390,036 155,997
Big Cajun 2 Unit 3 Coal 540 42.00% 219,990 80,522
Income Taxes
Entergy Corporation and its subsidiaries, including the Company,
file a consolidated federal income tax return. Income taxes are
allocated to the Company in proportion to its contribution to
consolidated taxable income. Commission regulations require that no
Entergy Corporation subsidiary pay more taxes than it would have paid
if a separate income tax return had been filed. Deferred income taxes
are recorded for all temporary differences between the book and tax
basis of assets and liabilities and for certain credits available for
carryforward.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some portion
of the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.
Investment tax credits are deferred and amortized based upon the
average useful life of the related property in accordance with rate
treatment. As discussed in Note 3 herein, in 1993 the Company changed
its accounting for income taxes to conform with SFAS 109, "Accounting
for Income Taxes."
Reacquired Debt
The premiums and costs associated with reacquired debt are being
amortized over the life of the related new issuances, in accordance
with ratemaking treatment.
Cash and Cash Equivalents
The Company considers all unrestricted highly liquid debt
instruments purchased with an original maturity of three months or less
to be cash equivalents.
Continued Application of SFAS 71
As a result of the EPAct, other Federal laws, and actions of
regulatory commissions, the electric utility industry is moving toward
a combination of competition and a modified regulatory environment. the
Company's financial statements currently reflect, for the most part,
assets and costs based on cost-based ratemaking regulation, in
accordance with SFAS 71, "Accounting for the Effects of Certain Types
of Regulation." Continued applicability of SFAS 71 to the Company's
financial statements requires that rates set by an independent
regulator on a cost-of-service basis (including a reasonable rate of
return on invested capital) can actually be charged to and collected
from customers.
In the event either all or a portion of a utility's operations
cease to meet those criteria for various reasons, including
deregulation, a change in the method of regulation or a change in the
competitive environment for the utility's regulated services, the
utility should discontinue application of SFAS 71 for the relevant
portion. That discontinuation would be reported by elimination from
the balance sheet of the effects of any actions of regulators recorded
as regulatory assets and liabilities.
As of December 31, 1995, and for the foreseeable future the
Company's financial statements continue to follow SFAS 71, with the
exceptions noted below.
SFAS 101
SFAS 101, "Accounting for the Discontinuation of Application of
FASB Statement No. 71," specifies how an enterprise that ceases to meet
the criteria for application of SFAS 71 to all or part of its
operations should report that event in its financial statements. The
Company discontinued regulatory accounting principles for its wholesale
jurisdiction and its steam department during 1989 and for the Louisiana
retail deregulated portion of River Bend in 1991. The results of the
Company's deregulated operations (before interest charges) for the
years ended December 31, 1995, 1994, and 1993 are as follows:
1995 1994 1993
(In Thousands)
Operating Revenues $141,171 $138,822 $141,399
Operating Expenses
Fuel, operating, and maintenance 105,733 116,386 120,177
Depreciation 31,129 27,890 28,554
Income taxes (2,914) (249) (4,411)
-------- -------- --------
Total Operating Expenses 133,948 144,027 144,320
-------- -------- --------
Net Income (Loss) from Deregulated $ 7,223 $ (5,205) $ (2,921)
Utility Operations ======== ======== ========
SFAS 121
In March 1995, the FASB issued SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" (SFAS 121), which became effective January 1, 1996. This
statement describes circumstances that may result in certain Long-Lived
assets being impaired. The statement also provides criteria for
recognition and measurement of asset impairment. Note 2 herein
describes regulatory assets of $169 million (net of tax) related to
Texas retail deferred River Bend operating and carrying costs.
These deferred costs will be required to be written off upon the
adoption of SFAS 121.
Certain other assets and operations of the Company totaling
approximately $1.7 billion (pre-tax) could be affected by SFAS 121 in
the future. Those assets include the Company's Louisiana deregulated
asset plan, and its Texas jurisdiction abeyed portion of the River Bend
plant, in addition to the wholesale jurisdiction and steam department
operations. As discussed above, the Company has previously discontinued
the application of SFAS 71 for the Louisiana deregulated asset plan,
operations under the wholesale jurisdiction, and the steam department.
The Company periodically reviews these assets and operations in
order to determine if the carrying value of such assets will be
recovered. Generally, this determination is based on the net cash
flows expected to result from such operations and assets. Projected
net cash flows depend on the future operating costs associated with the
assets, the efficiency and availability of the assets and generating
units, and the future market and price for energy over the remaining
life of the assets. Based on current estimates of future cash flows as
prescribed under SFAS 121, management anticipates that future revenues
from such assets and operations of the Company will fully recover all
related costs.
Fair Value Disclosures
The estimated fair value of financial instruments was determined
using bid prices reported by dealer markets and by nationally
recognized investment banking firms. Considerable judgment is required
in developing the estimates of fair value. Therefore, estimates are
not necessarily indicative of the amounts that the Company could
realize in a current market exchange. In addition, gains or losses
realized on financial instruments may be reflected in future rates and
not accrue to the benefit of stockholders.
The Company considers the carrying amounts of financial
instruments classified as current assets and liabilities to be a
reasonable estimate of their fair value because of the short maturity
of these instruments. In addition, the Company does not expect that
performance of its obligations will be required in connection with
certain off-balance sheet commitments and guarantees considered
financial instruments. Due to this factor, and because of the related-
party nature of these commitments and guarantees, determination of fair
value is not considered practicable. See Notes 5, 6, and 8 herein for
additional disclosure concerning fair value methodologies.
NOTE 2. RATE AND REGULATORY MATTERS
Merger-Related Rate Agreements
In 1993, the LPSC and the PUCT approved separate regulatory
proposals for the Company that include the following elements: (1) a
five-year Rate Cap on the Company's retail electric base rates in the
respective states, except for force major (defined to include, among
other things, war, natural catastrophes, and high inflation); (2) a
provision for passing through to retail customers the jurisdictional
portion of the fuel savings created by the Merger; and (3) a mechanism
for tracking nonfuel operation and maintenance savings created by the
Merger. The LPSC regulatory plan provides that such nonfuel savings
will be shared 60% by shareholders and 40% by ratepayers during the
eight years following the Merger. The LPSC plan requires annual
regulatory filings by the end of May through the year 2001. The PUCT
regulatory plan provides that such savings will be shared equally by
shareholders and ratepayers, except that the shareholders' portion will
be reduced by $2.6 million per year on a total company basis in years
four through eight. The PUCT plan also requires a series of future
regulatory filings in November 1996, 1998, and 2001 to ensure that the
ratepayers' share of such savings be reflected in rates on a timely
basis. In addition, the plan requires Entergy Corporation to hold the
Company's Texas retail customers harmless from the effects of the
removal by FERC of a 40% cap on the amount of fuel savings the Company
may be required to transfer to other subsidiaries of Entergy
Corporation under the FERC tracking mechanism (see below). On January
14, 1994, Entergy Corporation filed a petition for review before the
D.C. Circuit Court seeking review of FERC's deletion of the 40% cap
provision in the fuel cost protection mechanism. The matter is
currently being held in abeyance.
FERC approved the Company's inclusion in the System Agreement.
Commitments were adopted to provide reasonable assurance that the
ratepayers of the Operating Companies will not be allocated higher
costs including, among other things, (1) a tracking mechanism to
protect the Operating Companies from certain unexpected increases in
fuel costs, (2) the distribution of profits from power sales contracts
entered into prior to the Merger, (3) a methodology to estimate the
cost of capital in future FERC proceedings, and (4) a stipulation that
the Operating Companies will be insulated from certain direct effects
on capacity equalization payments if the Company were to acquire
Cajun's 30% share in River Bend. The Operating Companies' regulatory
authorities can elect to "opt out" of the fuel tracker, but are not
required to make such an election until FERC has approved the
respective Operating Company's compliance filing. The City of New
Orleans and the Mississippi Public Service Commission have made such
an election.
River Bend
In May 1988, the PUCT granted the Company a permanent increase in
annual revenues of $59.9 million resulting from the inclusion in rate
base of approximately $1.6 billion of company-wide River Bend plant
investment and approximately $182 million of related Texas retail
jurisdiction deferred River Bend costs (Allowed Deferrals). In
addition, the PUCT disallowed as imprudent $63.5 million of company-
wide River Bend plant costs and placed in abeyance, with no finding of
prudence, approximately $1.4 billion of company-wide River Bend plant
investment and approximately $157 million of Texas retail jurisdiction
deferred River Bend operating and carrying costs. The PUCT affirmed
that the rate treatment of such amounts would be subject to future
demonstration of the prudence of such costs. The Company and
intervening parties appealed this order (Rate Appeal) and the Company
filed a separate rate case asking, among other things, that the abeyed
River Bend plant costs be found prudent (Separate Rate Case).
Intervening parties filed suit in a Texas district court to prohibit
the Separate Rate Case and prevailed. The district court's decision in
favor of the intervenors was ultimately appealed to the Texas Supreme
Court, which ruled in 1990 that the prudence of the purported abeyed
costs could not be relitigated in a separate rate proceeding. The
Texas Supreme Court's decision stated that all issues relating to the
merits of the original PUCT order, including the prudence of all River
Bend-related costs, should be addressed in the Rate Appeal.
In October 1991, the Texas district court in the Rate Appeal
issued an order holding that, while it was clear the PUCT made an error
in assuming it could set aside $1.4 billion of the total costs of River
Bend and consider them in a later proceeding, the PUCT, nevertheless,
found that the Company had not met its burden of proof related to the
amounts placed in abeyance. The court also ruled that the Allowed
Deferrals should not be included in rate base. The court further
stated that the PUCT had erred in reducing the Company's deferred costs
by $1.50 for each $1.00 of revenue collected under the interim rate
increases authorized in 1987 and 1988. The court remanded the case to
the PUCT with instructions as to the proper handling of the Allowed
Deferrals. The Company's motion for rehearing was denied and, in
December 1991, the Company filed an appeal of the October 1991 district
court order. The PUCT also appealed the October 1991 district court
order, which served to supersede the district court's judgment,
rendering it unenforceable under Texas law.
In August 1994, the Texas Third District Court of Appeals (the
Appellate Court) affirmed the district court's decision that there was
substantial evidence to support the PUCT's 1988 decision not to include
the abeyed construction costs in the Company's rate base. While
acknowledging that the PUCT had exceeded its authority in attempting to
defer a decision on the inclusion of those costs in rate base in order
to allow the Company a further opportunity to demonstrate the prudence
of those costs in a subsequent proceeding, the Appellate Court found
that the Company had suffered no harm or lack of due process as a
result of the PUCT's error. Accordingly, the Appellate Court held that
the PUCT's action had the effect of disallowing the company-wide $1.4
billion of River Bend construction costs for ratemaking purposes. In
its August 1994 opinion, the Appellate Court also held that the
Company's deferred operating and maintenance costs associated with the
allowed portion of River Bend, as well as the Company's deferred River
Bend carrying costs included in the Allowed Deferrals, should be
included in rate base. The Appellate Court's August 1994 opinion
affirmed the PUCT's original order in this case.
The Appellate Court's August 1994 opinion was entered by two
judges, with a third judge dissenting. The dissenting opinion stated
that the result of the majority opinion was, among other things, to
deprive the Company of due process at the PUCT because the PUCT never
reached a finding on the $1.4 billion of construction costs.
In October 1994, the Appellate Court denied the Company's motion
for rehearing on the August 1994 opinion as to the $1.4 billion in
River Bend construction costs and other matters. The Company appealed
the Appellate Court's decision to the Texas Supreme Court. On February
9, 1996, the Texas Supreme Court agreed to hear the appeal. Oral
arguments are scheduled for March 19, 1996.
As of December 31, 1995, the River Bend plant costs disallowed for
retail ratemaking purposes in Texas, the River Bend plant costs held in
abeyance, and the related operating and carrying cost deferrals totaled
(net of taxes) approximately $13 million, $276 million (both net of
depreciation), and $169 million, respectively. Allowed Deferrals were
approximately $83 million, net of taxes and amortization, as of
December 31, 1995. The Company estimates it has collected
approximately $182 million of revenues as of December 31, 1995, as a
result of the originally ordered rate treatment by the PUCT of these
deferred costs. If recovery of the Allowed Deferrals is not upheld,
future revenues based upon those allowed deferrals could also be lost,
and no assurance can be given as to whether or not refunds to customers
of revenue received based upon such deferred costs will be required.
No assurance can be given as to the timing or outcome of the
remands or appeals described above. Pending further developments in
these cases, the Company has made no write-offs or reserves for the
River Bend-related costs. See below for a discussion of the write-off
of deferred operating and carrying cost required under SFAS 121 in
1996. Based on advice from Clark, Thomas & Winters, A Professional
Corporation, legal counsel of record in the Rate Appeal, management
believes that it is reasonably possible that the case will be remanded
to the PUCT, and the PUCT will be allowed to rule on the prudence of
the abeyed River Bend plant costs. At this time, management and legal
counsel are unable to predict the amount, if any, of the abeyed and
previously disallowed River Bend plant costs that ultimately may be
disallowed by the PUCT. A net of tax write-off as of December 31,
1995, of up to $289 million could be required based on an ultimate
adverse ruling by the PUCT on the abeyed and disallowed costs.
In prior proceedings, the PUCT has held that the original cost of
nuclear power plants will be included in rates to the extent those
costs were prudently incurred. Based upon the PUCT's prior decisions,
management believes that River Bend construction costs were prudently
incurred and that it is reasonably possible that it will recover in
rate base, or otherwise through means such as a deregulated asset plan,
all or substantially all of the abeyed River Bend plant costs.
However, management also recognizes that it is reasonably possible that
not all of the abeyed River Bend plant costs may ultimately be
recovered.
As part of its direct case in the Separate Rate Case, the Company
filed a cost reconciliation study prepared by Sandlin Associates,
management consultants with expertise in the cost analysis of nuclear
power plants, which supports the reasonableness of the River Bend costs
held in abeyance by the PUCT. This reconciliation study determined
that approximately 82% of the River Bend cost increase above the amount
included by the PUCT in rate base was a result of changes in federal
nuclear safety requirements, and provided other support for the
remainder of the abeyed amounts.
There have been four other rate proceedings in Texas involving
nuclear power plants. Disallowed investment in the plants ranged from
0% to 15%. Each case was unique, and the disallowances in each were
made for different reasons. Appeals of two of these PUCT decisions are
currently pending.
The following factors support management's position that a loss
contingency requiring accrual has not occurred, and its belief that
all, or substantially all, of the abeyed plant costs will ultimately be
recovered:
1. The $1.4 billion of abeyed River Bend plant costs have never
been ruled imprudent and disallowed by the PUCT;
2. Analysis by Sandlin Associates, which supports the prudence of
substantially all of the abeyed construction costs;
3. Historical inclusion by the PUCT of prudent construction costs
in rate base; and
4. The analysis of the Company's legal staff, which has
considerable experience in Texas rate case litigation.
Based on advice from Clark, Thomas & Winters, A Professional
Corporation, legal counsel of record in the Rate Appeal, management
believes that it is reasonably possible that the Allowed Deferrals will
continue to be recovered in rates, and that it is reasonably possible
that the deferred costs related to the $1.4 billion of abeyed River
Bend plant costs will be recovered in rates to the extent that the $1.4
billion of abeyed River Bend plant is recovered.
The adoption of SFAS 121 became effective January 1, 1996. SFAS
121 changes the standard for continued recognition of regulatory assets
and, as a result the Company will be required to write-off $169 million
of rate deferrals in 1996. The standard also describes circumstances
that may result in assets being impaired and provides criteria for
recognition and measurement of asset impairment. See Note 1 herein for
further information regarding SFAS 121.
Filings with the PUCT and Texas Cities
In March 1994, the Texas Office of Public Utility Counsel and
certain cities served by the Company instituted an investigation of the
reasonableness of the Company's rates. On March 20, 1995, the PUCT
ordered a $72.9 million annual base rate reduction for the period March
31, 1994, through September 1, 1994, decreasing to an annual base rate
reduction of $52.9 million after September 1, 1994. In accordance with
the Merger agreement, the rate reduction was applied retroactively to
March 31, 1994.
On May 26, 1995, the PUCT amended its previously issued March 20,
1995 rate order, reducing the $52.9 million annual base rate reduction
to an annual level of $36.5 million. The PUCT's action was based, in
part, upon a Texas Supreme Court decision not to require a utility to
use the prospective tax benefits generated by disallowed expenses to
reduce rates. The PUCT's May 26, 1995, amended order no longer
required the Company to pass such prospective tax benefits onto its
customers. The rate refund, retroactive to March 31, 1994, was
approximately $61.8 million (including interest) and was refunded to
customers in September, October, and November 1995.
The Company and other parties have appealed the PUCT order, but no
assurance can be given as to the timing or outcome of the appeal.
Filings with the LPSC
In May 1994, the Company filed a required earnings analysis with
the LPSC for the test year preceding the Merger (1993). On December
14, 1994, the LPSC ordered a $12.7 million annual rate reduction for
the Company, effective January 1995. The Company received a
preliminary injunction from the District Court regarding $8.3 million
of the reduction relating to the earnings effect of a 1994 change in
accounting for unbilled revenues. On January 1, 1995, the Company
reduced rates by $4.4 million. The Company filed an appeal of the
entire $12.7 million rate reduction with the District Court, which
denied the appeal in July 1995. The Company has appealed the order to
the Louisiana Supreme Court. The preliminary injunction relating to
$8.3 million of the reduction will remain in effect during the appeal.
On May 31, 1995, the Company filed its second required post-Merger
earnings analysis with the LPSC. Hearings on this review were held and
a decision is expected in mid-1996.
LPSC Fuel Cost Review
In November 1993, the LPSC ordered a review of the Company's fuel
costs for the period October 1988 through September 1991 (Phase 1)
based on the number of outages at River Bend and the findings in the
June 1993 PUCT fuel reconciliation case. In July 1994, the LPSC ruled
in the Phase 1 fuel review case and ordered the Company to refund
approximately $27 million to its customers. Under the order, a refund
of $13.1 million was made through a billing credit on August 1994
bills. In August 1994, the Company appealed the remaining $13.9
million of the LPSC-ordered refund to the district court. The Company
has made no reserve for the remaining portion, pending outcome of the
district court appeal, and no assurance can be given as to the timing
or outcome of the appeal.
The LPSC is currently conducting the second phase of its review of
the Company's fuel costs for the period October 1991 through December
1994. On June 30, 1995, the LPSC consultants filed testimony
recommending a disallowance of $38.7 million of fuel costs. Hearings
began in December 1995 and are expected to be completed in early March
1996.
Deregulated Asset Plan
A deregulated asset plan representing an unregulated portion
(approximately 24%) of River Bend (plant costs, generation, revenues,
and expenses) was established pursuant to a January 1992 LPSC order.
The plan allows the Company to sell such generation to Louisiana retail
customers at 4.6 cents per KWh or off-system at higher prices, with
certain sharing provisions for sharing such incremental revenue above
4.6 cents per KWh between ratepayers and shareholders.
River Bend Cost Deferrals
The Company deferred approximately $369 million of River Bend
operating and purchased power costs, and accrued carrying charges,
pursuant to a 1986 PUCT accounting order. Approximately $182 million
of these costs are being amortized over a 20-year period, and the
remaining $187 million are not being amortized pending the outcome of
the Rate Appeal. As of December 31, 1995, the unamortized balance of
these costs was $312 million. The Company deferred approximately
$400.4 million of similar costs pursuant to a 1986 LPSC accounting
order, of which approximately $83 million were unamortized as of
December 31, 1995, and are being amortized over a 10-year period ending
in 1998.
In accordance with a phase-in plan approved by the LPSC, the
Company deferred $294 million of its River Bend costs related to the
period February 1988 through February 1991. The Company has amortized
$172 million through December 31, 1995. The remainder of $122 million
will be recovered over approximately 2.2 years.
NOTE 3. INCOME TAXES
The Company's income tax expense consists of the following:
For the Years Ended December 31,
1995 1994 1993
(In Thousands)
Current:
Federal $ 13 $ 71 $ 16,714
State - 14 -
-------- -------- --------
Total 13 85 16,714
Deferred -- net 67,703 (57,911) 46,477
Investment tax credit adjustments--net (4,472) (4,260) 1,093
-------- -------- --------
Recorded income tax expense $ 63,244 $(62,086) $ 64,284
======== ======== ========
Charged to operations $ 57,235 $ (6,448) $ 46,007
Charged (credited) to other income 6,009 (55,638) 12,009
Charged to extraordinary items - - (671)
Charged to cumulative effect - - 6,939
-------- -------- --------
Total income taxes $ 63,244 $(62,086) $ 64,284
======== ======== ========
The Company's total income taxes differ from the amounts computed
by applying the statutory Federal income tax rate to income before
taxes. The reasons for the differences are:
<TABLE>
<CAPTION>
For the Years Ended December 31,
1995 1994 1993
% of % of % of
Pre-tax Pre-tax Pre-tax
Amount Income Amount Income Amount Income
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Computed at statutory rate $65,157 35.0 ($50,694) (35.0) $50,101 35.0
Increases (reductions) in tax
resulting from:
State income taxes net of
federal income tax effect 8,375 4.5 (6,571) (4.5) 1,332 0.9
Rate deferrals - net 6,240 3.4 6,551 4.5 6,193 4.3
Depreciation (13,073) (7.0) (8,188) (5.7) (11,343) (7.9)
Impact of change in tax rate - - - - 5,179 3.6
Book expenses not deducted
for tax - - 151 0.1 15,134 10.6
Amortization of investment
tax credits (4,475) (2.4) (4,472) (3.1) (4,435) (3.1)
Other--net 1,020 0.5 1,137 0.8 2,123 1.5
------- ---- -------- ----- ------- ----
Total income taxes $63,244 34.0 ($62,086) (42.9) $64,284 44.9
======= ==== ======== ===== ======= ====
</TABLE>
Significant components of the Company's net deferred tax
liabilities as of December 31, 1995 and 1994, are as follows:
1995 1994
(In Thousands)
Deferred Tax Liabilities:
Net regulatory assets/(liabilities) $ (512,281) $ (494,443)
Plant related basis differences (1,060,241) (1,065,053)
Rate deferrals (104,695) (132,213)
Other (1,814) (23,163)
----------- -----------
Total $(1,679,031) $(1,714,872)
=========== ===========
Deferred Tax Assets:
Net operating loss carryforwards $ 151,141 $ 251,000
Investment tax credit carryforward 167,713 173,852
Valuation allowance - investment tax
credit carryforward (44,597) (64,407)
Accumulated deferred investment tax
credit 58,653 69,269
Alternative minimum tax credit 39,709 39,743
Other 172,733 194,476
----------- -----------
Total $ 545,352 $ 663,933
=========== ===========
Net deferred tax liability $(1,133,679) $(1,050,939)
=========== ===========
As of December 31, 1995, the Company had investment tax credit
(ITC) carryforwards of $167.7 million, federal net operating loss (NOL)
carryforwards of $384.6 million and state NOL carryforwards of $355.0
million. The ITC carryforwards include the 35% reduction required by
the Tax Reform Act of 1986 and may be applied against federal income
tax liability of the Company and, if not utilized, will expire between
1996 and 2002. It is currently anticipated that approximately $44.6
million of ITC carryforward will expire unutilized. A valuation
allowance has been provided for deferred tax assets relating to that
amount. The alternative minimum tax (AMT) credit carryforward as of
December 31, 1995, was $39.7 million. This AMT credit can be carried
forward indefinitely and will reduce the Company's federal income tax
liability in the future.
In 1993, the Company adopted SFAS 109. SFAS 109 required that
deferred income taxes be recorded for all carryforwards and temporary
differences between the book and tax basis of assets and liabilities,
and that deferred tax balances be based on enacted tax laws at tax
rates that are expected to be in effect when the temporary differences
reverse. SFAS 109 required that regulated enterprises recognize
adjustments resulting from implementation as regulatory assets or
liabilities if it is probable that such amounts will be recovered from
or returned to customers in future rates. The Company recorded the
adoption of SFAS 109 by restating 1990, 1991, and 1992 financial
statements and including a charge of $96.5 million for the cumulative
effect of the adoption of SFAS 109 in 1990 primarily for that portion
of the operations on which the Company has discontinued regulatory
accounting principles.
NOTE 4. LINES OF CREDIT AND RELATED BORROWINGS
The Commission has authorized the Company to effect short-term
borrowings up to $125 million. This limit may be increased to as much
as $395 million after further Commission approval. This authorization
is effective through November 30, 1996. The Company did not have any
outstanding borrowings as of December 31, 1995.
NOTE 5. PREFERRED, PREFERENCE, AND COMMON STOCK
The number of shares, authorized and outstanding, and dollar value
of preferred and preference stock for the Company as of December 31,
1995, and 1994 were:
<TABLE>
<CAPTION>
Shares Call Price Per
Authorized Total Share as of
and Outstanding Dollar Value December 31,
1995 1994 1995 1994 1995
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
GSU Preferred and Preference Stock
Preference Stock
Cumulative, without par value
7% Series (a) (b) 6,000,000 6,000,000 $150,000 $150,000
========= ========= ======== ========
Preferred Stock
Authorized 6,000,000, $100 par
value, cumulative
Without sinking fund:
4.40% Series 51,173 51,173 $5,117 $5,117 $108.00
4.50% Series 5,830 5,830 583 583 $105.00
4.40%-1949 Series 1,655 1,655 166 166 $103.00
4.20% Series 9,745 9,745 975 975 $102.82
4.44% Series 14,804 14,804 1,480 1,480 $103.75
5.00% Series 10,993 10,993 1,099 1,099 $104.25
5.08% Series 26,845 26,845 2,685 2,685 $104.63
4.52% Series 10,564 10,564 1,056 1,056 $103.57
6.08% Series 32,829 32,829 3,283 3,283 $103.34
7.56% Series 350,000 350,000 35,000 35,000 $101.80
8.52% Series 500,000 500,000 50,000 50,000 $102.43
9.96% Series 350,000 350,000 35,000 35,000 $102.64
--------- --------- -------- --------
Total without sinking fund 1,364,438 1,364,438 $136,444 $136,444
========= ========= ======== ========
With sinking fund:
8.80% Series 204,495 226,807 $20,450 $22,680 $100.00
9.75% Series 19,543 21,565 1,954 2,154 $100.00
8.64% Series 168,000 182,000 16,800 18,200 $101.00
Adjustable Rate - A, 7.00% (c) 192,000 204,000 19,200 20,400 $100.00
Adjustable Rate - B, 7.00% (c) 292,500 315,000 29,250 31,500 $100.00
--------- --------- -------- --------
Total with sinking fund 876,538 949,372 $87,654 $94,934
========= ========= ======== ========
Fair Value of Preference Stock and
Preferred Stock with sinking fund (d) $219,191 $227,800
======== ========
</TABLE>
(a) The total dollar value represents the involuntary liquidation
value of $25 per share.
(b) These series are not redeemable as of December 31, 1995.
(c) Rates are as of December 31, 1995.
(d) Fair values were determined using bid prices reported by dealer
markets and by nationally recognized investment banking firms.
See Note 1 herein for additional disclosure of fair value of
financial instruments.
Changes in the preferred stock, with and without sinking fund,
preference stock, and common stock for the Company during the last
three years were:
Number of Shares
1995 1994 1993
Preferred stock retirements
$100 par value (72,834) (60,667) (1,683,834)
Preference stock issuances - - 6,000,000
Common stock issuances - - 100
Common stock retirements - - (114,055,065)
Cash sinking fund requirements for the next five years for
preferred stock, outstanding as of December 31, 1995 are:
(In Thousands)
1996 $6,067
1997 6,067
1998 6,067
1999 6,067
2000 156,067
The Company has the annual noncumulative option to redeem, at par,
additional amounts of certain series of their outstanding preferred
stock.
Employees of the Company are eligible to participate in the
Entergy Corporation Employee Stock Investment Plan (ESIP). ESIP is
authorized to issue or acquire, through March 31, 1997, up to 2,000,000
shares of its common stock to be held as treasury shares and reissued
to meet the requirements of the ESIP. Under the ESIP, employees may be
granted the opportunity to purchase (for up to 10% of their regular
annual salary, but not more than $25,000) common stock at 85% of the
market value on the first or last business day of the plan year,
whichever is lower. Through this program, employees purchased 329,863
shares for the 1994 plan year. The 1995 plan year runs from April 1,
1995, to March 31, 1996.
NOTE 6. LONG - TERM DEBT
The long-term debt of the Company as of December 31, 1995, was:
Maturities Interest Rates
From To From To
First Mortgage Bonds
1996 1999 5% 10.5% $445,000
2000 2004 6% 9.75% 670,000
2005 2009 6.25% 11.375% 120,000
2020 2024 7% 10.375% 450,000
Governmental Obligations (a)
1996 2008 5.9% 10% 46,300
2009 2023 5.95% 12.50% 435,735
Debentures
1996 2008 9.72% 150,000
Other Long-Term Debt 9,156
Unamortized Premium and Discount - Net (5,295)
----------
Total Long-Term Debt 2,320,896
Less Amount Due Within One Year 145,425
----------
Long-Term Debt Excluding Amount Due $2,175,471
Within One Year ==========
Fair Value of Long-Term Debt (b) $2,416,932
==========
The long-term debt of the Company as of December 31, 1994, was:
Maturities Interest Rates
From To From To
First Mortgage Bonds
1995 1999 4.625% 14% $445,000
2000 2004 6% 9.75% 670,000
2005 2009 6.25% 11.375% 120,000
2020 2024 7% 10.375% 450,000
Governmental Obligations (a)
1995 2008 5.9% 10% 46,725
2009 2023 5.95% 12.50% 435,735
Debentures - Due 1998, 9.72% 200,000
Other Long-Term Debt 6,879
Unamortized Premium and Discount - Net (5,497)
----------
Total Long-Term Debt 2,368,842
Less Amount Due Within One Year 50,425
----------
Long-Term Debt Excluding Amount due $2,318,417
Within One Year ==========
Fair Value of Long-Term Debt (b) $2,277,300
==========
(a) Consists of pollution control bonds, certain series of which are
secured by non-interest bearing first mortgage bonds.
(b) The fair value excludes lease obligations and other long-term debt
and was determined using bid prices reported by dealer markets and
by nationally recognized investment banking firms. See Note 1
herein for additional information on disclosure of fair value of
financial instruments.
The annual long-term debt maturities (excluding lease obligations)
and annual cash sinking fund requirements for the next five years are
as follows:
Year In Thousands
1996 $145,425
1997 160,865
1998 190,890
1999 100,915
2000 945
Not included are other sinking fund requirements of approximately
$13.8 million annually which may be satisfied by cash or by
certification of property additions at the rate of 167% of such
requirements.
The Company has two outstanding series of pollution control bonds
collateralized by irrevocable letters of credit, which are scheduled to
expire before the scheduled maturity of the bonds. The letter of
credit collateralizing the $28.4 million variable rate series, due
December 1, 2015, expires in September 1996 and the letter of credit
collateralizing the $20 million variable rate series, due April 1,
2016, expires in April 1996. The Company plans to refinance these
series or renew the letters of credit.
NOTE 7. DIVIDEND RESTRICTIONS
Provisions within the Articles of Incorporation or pertinent
Indentures and various other agreements related to the long-term debt
and preferred stock of Entergy Corporation's subsidiaries restrict the
payment of cash dividends or other distributions on their common and
preferred stock. Additionally, PUHCA prohibits Entergy Corporation's
subsidiaries from making loans or advances to Entergy Corporation.
Approximately $1,266.5 million of restricted common equity was
unavailable for distribution to Entergy Corporation by the Company as
of December 31, 1995.
NOTE 8. COMMITMENTS AND CONTINGENCIES
Cajun - River Bend Litigation
The Company has significant business relationships with Cajun,
including co-ownership of River Bend (operated by the Company) and Big
Cajun 2, Unit 3 (operated by Cajun). The Company and Cajun,
respectively, own 70% and 30% undivided interests in River Bend and 42%
and 58% undivided interests in Big Cajun 2, Unit 3.
In June 1989, Cajun filed a civil action against the Company in
the United States District Court for the Middle District of Louisiana
(District Court). Cajun's complaint seeks to annul, rescind,
terminate, and/or dissolve the Joint Ownership Participation and
Operating Agreement (Operating Agreement) entered into on August 28,
1979, relating to River Bend. Cajun alleges fraud and error by the
Company, breach of its fiduciary duties owed to Cajun, and/or the
Company's repudiation, renunciation, abandonment, or dissolution of its
core obligations under the Operating Agreement, as well as the lack or
failure of cause and/or consideration for Cajun's performance under the
Operating Agreement. The suit also seeks to recover Cajun's alleged
$1.6 billion investment in the unit as damages, plus attorneys' fees,
interest, and costs. Two member cooperatives of Cajun have brought an
independent action to declare the Operating Agreement void, based upon
failure to get prior LPSC approval alleged to be necessary. The
Company believes the suits are without merit and is contesting them
vigorously.
A trial on the portion of the suit by Cajun to rescind the
Operating Agreement began in April 1994 and was completed in March
1995. On October 24, 1995, the District Court issued a memorandum
opinion ruling in favor of the Company. The District Court found that
Cajun did not prove that the Company fraudulently induced it to execute
the Operating Agreement and that Cajun failed to timely assert its
claim. A final judgment on this portion of the suit will not be
entered until all claims asserted by Cajun have been heard. The second
portion of the suit is scheduled to begin on July 2, 1996. If the
Company is ultimately unsuccessful in this litigation and is required
to pay substantial damages, the Company would probably be unable to
make such payments and could be forced to seek relief from its
creditors under the United States Bankruptcy Code. If the Company
prevails in this litigation, there can be no assurance that the United
States Bankruptcy Court will allow funding of all required costs of
Cajun's ownership in River Bend.
Cajun has not paid its full share of capital costs, operating and
maintenance expenses, or other costs for repairs and improvements to
River Bend since 1992. In addition, certain costs and expenses paid by
Cajun were paid under protest. These actions were taken by Cajun based
on its contention, with which the Company disagrees, that River Bend's
operating and maintenance expenses were excessive. Cajun's unpaid
portion of River Bend operating and maintenance expenses (including
nuclear fuel) and capital costs for 1995 was approximately $58.7
million. Cajun continues to pay its share of decommissioning costs for
River Bend.
During the period in which Cajun is not paying its share of River
Bend costs, the Company intends to fund all costs necessary for the
safe, continuing operation of the unit. The responsibilities of
Entergy Operations, Inc. as the licensed operator of River Bend, for
safely operating and maintaining the unit, are not affected by Cajun's
actions.
In view of Cajun's failure to fund its share of River Bend-related
operating, maintenance, and capital costs, the Company has (i) credited
the Company's share of expenses for Big Cajun 2, Unit 3 against amounts
due from Cajun to the Company, and (ii) sought to market Cajun's share
of the power from River Bend and apply the proceeds to the amounts due
from Cajun to the Company. As a result, on November 2, 1994, Cajun
discontinued supplying the Company with its share of power from Big
Cajun 2, Unit 3. The Company requested an order from the District Court
requiring Cajun to supply the Company with this energy and allowing the
Company to credit amounts due to Cajun for Big Cajun 2, Unit 3 energy
against amounts Cajun owed to the Company for River Bend. In December
1994, by means of a preliminary injunction, the District Court ordered
Cajun to supply the Company with its share of energy from Big Cajun 2,
Unit 3 and ordered the Company to make payments for its share of Big
Cajun 2, Unit 3 expenses to the registry of the District Court. In
October 1995, the Fifth Circuit affirmed the District Court's
preliminary injunction. As of December 31, 1995, $38 million had been
paid by the Company into the registry of the District Court.
On December 21, 1994, Cajun filed a petition in the United States
Bankruptcy Court for the Middle District of Louisiana seeking
bankruptcy relief under Chapter 11 of the Bankruptcy Code. Cajun's
bankruptcy could have a material adverse effect on the Company.
However, the Company is taking appropriate steps to protect its
interests and its claims against Cajun arising from the co-ownership in
River Bend and Big Cajun 2, Unit 3. On December 31, 1994, the District
Court issued an order lifting an automatic stay as to certain
proceedings, with the result that the preliminary injunction granted by
the Court in December 1994 remains in effect. Cajun filed a Notice of
Appeal on January 18, 1995, to the Fifth Circuit seeking a reversal of
the District Court's grant of the preliminary injunction. No hearing
date has been set on Cajun's appeal.
In the bankruptcy proceedings, Cajun filed on January 10, 1995, a
motion to reject the Operating Agreement as a burdensome executory
contract. The Company responded on January 10, 1995, with a memorandum
opposing Cajun's motion. Should the court grant Cajun's motion to
reject the Operating Agreement, Cajun would be relieved of its
financial obligations under the contract, while the Company would
likely have a substantial damage claim arising from any such rejection.
Although the Company believes that Cajun's motion to reject the
Operating Agreement is without merit, it is not possible to predict the
outcome or ultimate impact of these proceedings.
The cumulative cost (excluding nuclear fuel) to the Company
resulting from Cajun's failure to pay its full share of River Bend-
related costs, reduced by the proceeds from the sale by the Company of
Cajun's share of River Bend power and payments for the Company's
portion of expenses for Big Cajun 2, Unit 3 into the registry of the
District Court, was $31.1 million as of December 31, 1995. These
amounts are reflected in long-term receivables with an offsetting
reserve in other deferred credits. Cajun's bankruptcy may affect the
ultimate collectibility of the amounts owed to the Company, including
any amounts that may be awarded in litigation.
Cajun - Transmission Service
The Company and Cajun are parties to FERC proceedings relating to
transmission service charge disputes. In April 1992, FERC issued a
final order in these disputes. In May 1992, the Company and Cajun
filed motions for rehearings on certain portions of the order, which
are still pending at FERC. In June 1992, the Company filed a petition
for review in the United States Court of Appeals regarding certain of
the other issues decided by FERC. In August 1993, the United States
Court of Appeals rendered an opinion reversing FERC's order regarding
the portion of such disputes relating to the calculations of certain
credits and equalization charges under the Company's service schedules
with Cajun. The opinion remanded the issues to FERC for further
proceedings consistent with its opinion. In February 1995, FERC
eliminated an issue from the remand that the Company believes the Court
of Appeals directed FERC to reconsider. In orders issued on August 3,
1995, and October 2, 1995, FERC affirmed an April 1995 ruling by an ALJ
in the remanded portion of the Company's and Cajun's ongoing
transmission service charge disputes before FERC. Both the Company and
Cajun have petitioned for appeal. No hearing dates have been set in
the appeals.
Under the Company's interpretation of the 1992 FERC order, as
modified by its August 3, 1995, and October 2, 1995, orders, Cajun
would owe the Company approximately $64.9 million as of December 31,
1995. The Company further estimates that if it were to prevail in its
May 1992 motion for rehearing and on certain other issues decided
adversely to the Company in the February 1995, August 1995, and October
1995 FERC orders, which the Company has appealed, Cajun would owe the
Company approximately $143.5 million, as of December 31, 1995. If
Cajun were to prevail in its May 1992 motion for rehearing to FERC, and
if the Company were not to prevail in its May 1992 motion for rehearing
to FERC, and if Cajun were to prevail in appealing FERC's August and
October 1995 orders, the Company estimates it would owe Cajun
approximately $96.4 million as of December 31, 1995. The above amounts
are exclusive of a $7.3 million payment by Cajun on December 31, 1990,
which the parties agreed to apply to the disputed transmission service
charges. Pending FERC's ruling on the May 1992 motions for rehearing,
the Company has continued to bill Cajun, utilizing the historical
billing methodology, and has recorded underpaid transmission charges,
including interest, in the amount of $137.2 million as of December 31,
1995. This amount is reflected in long-term receivables, with an
offsetting reserve in other deferred credits. Cajun's bankruptcy may
affect the Company's collection of the above amounts. FERC has
determined that the collection of the pre-petition debt of Cajun is an
issue properly decided in the bankruptcy proceeding.
Capital Requirements and Financing
Construction expenditures (excluding nuclear fuel) for the years
1996, 1997, and 1998 are estimated to total $155 million, $127 million,
and $131 million, respectively. The Company will also require $515
million during the period 1996-1998 to meet long-term debt and
preferred stock maturities and cash sinking fund requirements. The
Company plans to meet the above requirements primarily with internally
generated funds and cash on hand, supplemented by the issuance of debt
and preferred stock. The Company may also continue with the
acquisition or refinancing of all or a portion of certain outstanding
series of preferred stock and long-term debt. See Notes 5 and 6 herein
for further information.
Fuel Purchase Agreements
The Company has a contract for a supply of low-sulfur Wyoming coal
for Nelson Unit 6, which should be sufficient to satisfy the fuel
requirements at Nelson Unit 6 through 2004. Cajun has advised the
Company that it has contracts that should provide an adequate supply of
coal until 1999 for the operation of Big Cajun 2, Unit 3.
The Company has long-term gas contracts, which will satisfy
approximately 75% of its annual requirements. Such contracts generally
require the Company to purchase in the range of 40% of expected total
gas needs. Additional gas requirements are satisfied under less
expensive short-term contracts. The Company has a transportation
service agreement with a gas supplier that provides flexible natural
gas service to the Sabine and Lewis Creek generating stations. This
service is provided by the supplier's pipeline and salt dome gas
storage facility, which has a present capacity of 5.3 billion cubic
feet of natural gas.
Power Purchases/Sales Agreements
In 1988, the Company entered into a joint venture with a primary
term of 20 years with Conoco, Inc., Citgo Petroleum Corporation, and
Vista Chemical Company (Industrial Participants) whereby the Company's
Nelson Units 1 and 2 were sold to a partnership (NISCO) consisting of
the Industrial Participants and the Company. The Industrial
Participants supply the fuel for the units, while the Company operates
the units at the discretion of the Industrial Participants and
purchases the electricity produced by the units. The Company is
continuing to sell electricity to the Industrial Participants. For the
years ended December 31, 1995, 1994, and 1993, the purchases by the
Company of electricity from the joint venture totaled $59.7 million,
$58.3 million, and $62.6 million, respectively.
Nuclear Insurance
The Price-Anderson Act limits public liability for a single
nuclear incident to approximately $8.92 billion. Through Entergy
Corporation, the Company has protection for this liability through a
combination of private insurance (currently $200 million) and an
industry assessment program. Under the assessment program, the maximum
payment requirement for each nuclear incident would be $79.3 million
per reactor, payable at a rate of $10 million per licensed reactor per
incident per year. With respect to River Bend, any assessments
pertaining to this program are allocated in accordance with the
respective ownership interests of the Company and Cajun. In addition,
the Company participates through Entergy Corporation in a private
insurance program which provides coverage for worker tort claims filed
for bodily injury caused by radiation exposure. The program provides
for a maximum assessment of approximately $16 million for Entergy's
five nuclear units in the event losses exceed accumulated reserve
funds.
The Company is also a member of certain insurance programs that
provide coverage for property damage, including decontamination and
premature decommissioning expense, to members' nuclear generating
plants. As of December 31, 1995, the Company was insured against such
losses up to $2.75 billion. In addition, the Company is a member of an
insurance program that covers certain replacement power and business
interruption costs incurred due to prolonged nuclear unit outages.
Under the property damage and replacement power/business interruption
insurance programs, the Company could be subject to assessments if
losses exceed the accumulated funds available to the insurers. As of
December 31, 1995, the maximum amounts of such possible assessments
were $22.0 million. Cajun shares approximately $4.6 million of the
Company's obligation.
The Company is insured for property losses through Entergy. The
amount of property insurance presently carried by Entergy exceeds the
NRC's minimum requirement for nuclear power plant licensees of $1.06
billion per site. NRC regulations provide that the proceeds of this
insurance must be used, first, to place and maintain the reactor in a
safe and stable condition and, second, to complete decontamination
operations. Only after proceeds are dedicated for such use and
regulatory approval is secured would any remaining proceeds be made
available for the benefit of plant owners or their creditors.
Spent Nuclear Fuel and Decommissioning Costs
The Company provides for estimated future disposal costs for spent
nuclear fuel in accordance with the Nuclear Waste Policy Act of 1982.
The Company entered into a contract with the DOE, whereby the DOE will
furnish disposal service at a cost of one mill per net KWh generated
and sold after April 7, 1983, plus a onetime fee for generation prior
to that date. The Company considers all costs incurred or to be
incurred, except accrued interest, for the disposal of spent nuclear
fuel to be proper components of nuclear fuel expense, and provisions to
recover such costs have been or will be made in applications to
regulatory authorities.
Delays have occurred in the DOE's program for the acceptance and
disposal of spent nuclear fuel at a permanent repository. In a
statement released February 17, 1993, the DOE asserted that it does not
have a legal obligation to accept spent nuclear fuel without an
operational repository for which it has not yet arranged. Currently,
the DOE projects it will begin to accept spent fuel no earlier than
2015. In the meantime, the Company is responsible for spent fuel
storage. Current on-site spent fuel storage capacity at River Bend is
estimated to be sufficient until 2003. Thereafter, the Company will
provide additional storage. The initial cost of providing the
additional on-site spent fuel storage capability required at River Bend
is expected to be approximately $5 million to $10 million. In
addition, about $3 million to $5 million will be required every four to
five years subsequent to 2003 for River Bend until the DOE's repository
begins accepting the unit's spent fuel.
Total decommissioning costs for River Bend (based on a 1991 cost
study reflecting 1990 dollars) have been estimated at $268 million as
of December 31, 1995.
In the Texas retail jurisdiction, the Company is recovering in
rates decommissioning costs (based on the 1991 cost study) that, with
adjustments, total $204.9 million. In the Louisiana retail
jurisdiction, the Company is currently recovering in rates
decommissioning costs (based on a 1985 cost study) which total $141
million. The Company included decommissioning costs (based on the 1991
study) in the LPSC rate review filed in May 1995 which has not yet been
concluded. The Company periodically reviews and updates estimated
decommissioning costs and applications are periodically made to the
appropriate regulatory authorities to reflect in rates any future
change in projected decommissioning costs. The amounts recovered in
rates are deposited in trust funds and reported at market value as
quoted on nationally traded markets. These trust fund assets largely
offset the accumulated decommissioning liability that is recorded as
accumulated depreciation for the Company. The cumulative liability as
of December 31, 1994, the 1995 trust earnings, the 1995 decommissioning
expenses and the cumulative liability as of December 31, 1995 for River
Bend were $22.2 million, $1.4 million, $8.1 million and $31.7 million,
respectively.
River Bend's decommissioning expense was $3.0 million in 1994.
The actual decommissioning costs may vary from the estimates because of
regulatory requirements, changes in technology, and increased costs of
labor, materials, and equipment. Management believes that actual
decommissioning costs are likely to be higher than the estimated
amounts presented above.
The staff of the Commission has questioned certain of the
financial accounting practices of the electric utility industry
regarding the recognition, measurement, and classification of
decommissioning costs for nuclear generating stations in the financial
statements of electric utilities. In response to these questions, the
FASB has been reviewing the accounting for decommissioning and has
expanded the scope of its review to include liabilities related to the
closure and removal of all long-lived assets. An exposure draft of the
proposed SFAS issued in February 1996 would be effective in 1997. The
proposed SFAS would require measurement of the liability for closure
and removal of long-lived assets (including decommissioning) based on
discounted future cash flows. Those future cash flows should be
determined by estimating current costs and adjusting for inflation,
efficiencies that may be gained from experience with similar
activities, and consideration of reasonable future advances in
technology. It also would require that changes in the
decommissioning/closure cost liability resulting from changes in
assumptions should be recognized with a corresponding adjustment to the
plant asset, and depreciation should be revised prospectively. The
proposed SFAS stated that the initial recognition of the
decommissioning/closure cost liability would result in an asset that
should be presented with other plant costs on the financial statements
because the cost of decommissioning/closing the plant is recognized as
part of the total cost of the plant asset. In addition there would be
a regulatory asset recognized on the financial statements to the extent
the initial decommissioning/closure liability has increased due to the
passage of time, and such costs are probable of future recovery.
If current electric utility industry accounting practices with
respect to nuclear decommissioning and other closure costs are changed,
annual provisions for such costs could increase, the estimated cost for
decommissioning/closure could be recorded as a liability rather than as
accumulated depreciation, and trust fund income from decommissioning
trusts could be reported as investment income rather than as a
reduction to decommissioning expense.
The EPAct has a provision that assesses domestic nuclear utilities
with fees for the decontamination and decommissioning of the DOE's past
uranium enrichment operations. The decontamination and decommissioning
assessments will be used to set up a fund into which contributions from
utilities and the federal government will be placed. The Company's
annual assessments, which will be adjusted annually for inflation, are
approximately $0.9 million (in 1995 dollars) for approximately 15
years. At December 31, 1995 the Company had recorded a liability of
$6.0 million for decontamination and decommissioning fees in other
current liabilities and other noncurrent liabilities, and these
liabilities were offset in the consolidated financial statements by
regulatory assets. FERC requires that utilities treat these
assessments as costs of fuel as they are amortized and are recovered
through rates in the same manner as other fuel costs.
Environmental Issues
The Company has been designated as a PRP for the clean-up of
certain hazardous waste disposal sites. The Company is currently
negotiating with the EPA and state authorities regarding the clean-up
of these sites. Several class action and other suits have been filed
in state and federal courts seeking relief from the Company and others
for damages caused by the disposal of hazardous waste and for asbestos-
related disease allegedly resulting from exposure on Company premises.
While the amounts at issue in the clean-up efforts and suits may be
substantial, the Company believes that its results of operations and
financial condition will not be materially adversely affected by the
outcome of the suits. Through December 31, 1995, $7.9 million has been
expended on the clean-up. As of December 31, 1995, a remaining
recorded liability of $21.7 million existed relating to the clean-up of
five sites at which the Company has been designated a PRP.
NOTE 9. LEASES
General
As of December 31, 1995, the Company had capital leases and
noncancelable operating leases for equipment, buildings, vehicles, and
fuel storage facilities (excluding nuclear fuel leases and the sale and
leaseback transactions) with minimum lease payments as follows:
Capital Operating
Leases Leases
Year (In Thousands)
1996 $ 12,475 $ 12,871
1997 12,475 12,566
1998 12,475 16,499
1999 12,475 16,499
2000 12,049 16,326
Years thereafter 69,331 60,518
-------- --------
Minimum lease payments 131,280 135,279
Less: Amount
representing interest 47,921
Present value of net --------
minimum lease payments $ 83,359
========
Rental expense for leases (excluding nuclear fuel leases and the
sale and leaseback transactions) was approximately $15.1 million, $15.3
million, and $31.9 million, in 1995, 1994 and 1993, respectively.
Nuclear Fuel Leases
The Company has arrangements to lease nuclear fuel in an aggregate
amount up to $85 million as of December 31, 1995. The lessors finance
the acquisition and ownership of nuclear fuel through credit agreements
and the issuance of notes. These agreements are subject to annual
renewal with the consent of the lenders. The credit agreements for the
Company have been extended and now have termination dates of December
1998. The debt securities issued pursuant to these fuel lease
arrangements have varying maturities through January 31, 1999. It is
expected that the credit agreements will be extended or alternative
financing will be secured by each lessor upon the maturity of the
current arrangements. If extensions or alternative financing cannot be
arranged, the lessee in each case must purchase sufficient nuclear fuel
to allow the lessor to retire such borrowings.
Lease payments are based on nuclear fuel use. Nuclear fuel lease
expense charged to operations was $41.4 million, $37.2 million, and
$43.6 million (including interest of $6.0 million, $8.7 million, and
$10.2 million), in 1995, 1994 and 1993, respectively.
NOTE 10. POSTRETIREMENT BENEFITS
Company employees participate in plans sponsored by Entergy
Corporation and its subsidiaries which have various postretirement
benefit plans covering substantially all of their employees. The
pension plans are noncontributory and provide pension benefits that are
based on employees' credited service and compensation during the final
years before retirement. Entergy Corporation and its subsidiaries fund
pension costs in accordance with contribution guidelines established by
the Employee Retirement Income Security Act of 1974, as amended, and
the Internal Revenue Code of 1986, as amended. The assets of the plans
include common and preferred stocks, fixed income securities, interest
in a money market fund, and insurance contracts. Prior to January 1,
1995, Entergy Corporations' non-bargaining employees were generally
included in a plan sponsored by the individual subsidiary company where
they were employed. Effective January 1, 1995, these employees became
participants in a new plan with provisions substantially identical to
their previous plan.
Total 1995, 1994, and 1993 pension cost of the Company, including
amounts capitalized, included the following components (in thousands):
1995 1994 1993
Service cost - benefits earned $ 6,686 $ 9,497 $ 10,417
during the period
Interest cost on projected 21,098 21,335 17,643
benefit obligation
Actual return on plan assets (82,624) 6,785 (43,400)
Net amortization and deferral 53,921 (39,405) 14,863
Other - 17,963 -
-------- -------- ---------
Net pension cost $ (919) $ 16,175 $ (477)
======== ======== =========
The funded status of the Company's various pension plans as of
December 31, 1995 and 1994 was (in thousands):
1995 1994
Actuarial present value of
accumulated pension
plan obligation:
Vested $256,173 $273,509
Nonvested 792 1,502
-------- --------
Accumulated benefit obligation 256,965 275,011
-------- --------
Plan assets at fair value 374,010 313,035
Projected benefit obligation 289,666 290,802
-------- --------
Plan assets in excess of 84,344 22,233
(less than) projected benefit
obligation
Unrecognized prior service cost 12,021 13,720
Unrecognized transition asset (11,937) (14,324)
Unrecognized net loss (gain) (135,303) (73,423)
-------- --------
Accrued pension asset (liability) ($50,875) ($51,794)
======== ========
The significant actuarial assumptions used in computing the
information above for 1995, 1994, and 1993 were as follows: weighted
average discount rate, 7.5% for 1995, 8.5% for 1994, and 7.5% for 1993,
weighted average rate of increase in future compensation levels, 4.6%
for 1995, 5.1% for 1994 and 5% for 1993; and expected long-term rate of
return on plan assets, 8.5% . Transition assets of the Company are
being amortized over the greater of the remaining service period of
active participants or 15 years.
In 1994, the Company recorded an $18.0 million charge related to
early retirement programs in connection with the Merger, of which $15.2
million was expensed.
Other Postretirement Benefits
The Company also provides certain health care and life insurance
benefits for retired employees. Substantially all employees may become
eligible for these benefits if they reach retirement age while still
working for the Company.
Effective January 1, 1993, the Company adopted SFAS 106. The new
standard required a change from a cash method to an accrual method of
accounting for postretirement benefits other than pensions. The
Company continues to fund these benefits on a pay-as-you-go basis. At
January 1, 1993, the actuarially determined accumulated postretirement
benefit obligation (APBO) earned by retirees and active employees was
estimated to be approximately $128 million. Such obligation is being
amortized over a 20-year period beginning in 1993.
The Company has sought approval, in its respective regulatory
jurisdictions, to implement the appropriate accounting requirements
related to SFAS 106 for ratemaking purposes. The LPSC ordered the
Company to continue the use of the pay-as-you-go method for ratemaking
purposes for postretirement benefits other than pensions, but the LPSC
retains the flexibility to examine the individual company's accounting
for postretirement benefits to determine if special exceptions to this
order are warranted. Pursuant to the PUCT's May 26, 1995, amended
order, the Company is currently collecting its SFAS 106 costs in rates.
Total 1995, 1994 and 1993 postretirement benefit cost of the
Company including amounts capitalized and deferred, included the
following components (in thousands):
1995 1994 1993
Service cost - benefits earned $1,864 $ 2,169 $ 5,467
during the period
Interest cost on APBO 8,526 6,449 9,976
Actual return on plan assets - - -
Net amortization and deferral 4,477 2,832 6,402
------- ------- -------
Net postretirement benefit cost $14,867 $11,450 $21,845
======= ======= =======
The funded status of the Company's postretirement plans as of
December 31, 1995 and 1994, was (in thousands):
1995 1994
Actuarial present value of accumulated
postretirement benefit obligation:
Retirees $101,698 $39,695
Other fully eligible participants 17,334 26,069
Other active participants 15,980 13,445
-------- -------
Accumulated benefit obligation 135,012 79,209
Plan assets at fair value - -
-------- -------
Plan assets less than APBO (135,012) (79,209)
Unrecognized transition obligation 107,975 115,232
Unrecognized net loss (gain)/other (617) (57,410)
-------- --------
Accrued postretirement benefit liability ($27,654) ($21,387)
======== ========
The assumed health care cost trend rate used in measuring the APBO
of the Company was 8.4% for 1996, gradually decreasing each successive
year until it reaches 5.0% in 2005. A one percentage-point increase in
the assumed health care cost trend rate for each year would have
increased the APBO of the Company, as of December 31, 1995, by 10.4%,
and the sum of the service cost and interest cost by approximately
12.8%. The assumed discount rate and rate of increase in future
compensation used in determining the APBO were 7.5% for 1995, 8.5% for
1994 and 7.5% for 1993, and 4.6% for 1995, 5.1% for 1994 and 5% for
1993, respectively. The expected long-term rate of return on plan
assets was 8.5% for 1995.
NOTE 11. RESTRUCTURING COSTS
The restructuring programs announced by Entergy Corporation and
its subsidiaries, including the Company, in 1994 and 1995 included
anticipated reductions in the number of employees and the consolidation
of offices and facilities. The programs are designed to reduce costs,
improve operating efficiencies, and increase shareholder value in order
to enable Entergy and its subsidiaries to become low-cost producers.
The balances as of December 31, 1994, and 1995, for restructuring
liabilities associated with these programs are shown below along with
the actual termination benefits paid under the programs.
Restructuring Restructuring
Liability as of Additional Payments Liability as of
December 31, 1994 1995 Charges Made in 1995 December 31, 1994
(In Millions)
$ 6.5 $ 13.1 $(14.2) $ 5.4
The restructuring charges shown above primarily included employee
severance costs related to the expected termination of approximately
649 employees in various groups. As of December 31, 1995, 497
employees had either been terminated or accepted voluntary separation
packages under the restructuring plan.
Additionally, the Company recorded $23.8 million for remaining
severance and augmented retirement benefits related to the Merger.
Actual termination benefits paid under the program during 1995 amounted
to $11.6 million. At December 31, 1995, the total remaining liability
for expected future Merger-related outlays was $2.3 million.
NOTE 12. TRANSACTIONS WITH AFFILIATES
The various subsidiaries of Entergy Corporation, including the
Company, purchase electricity from and/or sell electricity to each
other under rate schedules filed with FERC. In addition, the Company
purchases fuel from System Fuels, Inc. receives technical, advisory,
and administrative services from Entergy Services, Inc. and receives
management and operating services from Entergy Operations, Inc., all of
which are wholly-owned subsidiaries of Entergy Corporation. The
Company recorded $62.7 million and $44.4 million of intercompany
revenues and $266.5 million, $296.9 million and $25.5 million of
intercompany operating expenses in 1995, 1994, and 1993, respectively.
In addition, the Company recorded $129.1 million and $210.2 million in
1995 and 1994, respectively, for operating expenses paid or reimbursed
to Entergy Operations, Inc.
NOTE 13. ENTERGY CORPORATION-GULF STATES UTILITIES COMPANY MERGER
On December 31, 1993, Entergy Corporation and the Company
consummated the Merger. The Company became a wholly owned subsidiary
of Entergy Corporation and continues to operate as an electric utility
corporation under the regulation of FERC, the Commission, the PUCT, and
the LPSC. As consideration to the Company's shareholders, Entergy
Corporation paid $250 million and issued 56,695,724 shares of its
common stock in exchange for the 114,055,065 outstanding shares of the
Company's common stock. In addition, $33.5 million of transaction
costs were capitalized in connection with the Merger.
NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)
The business of the Company is subject to seasonal fluctuations
with the peak period occurring during the third quarter. Operating
results for the four quarters of 1995 and 1994 were:
Operating Operating Net Income
Revenues Income (a)(b) (Loss)(a)(b)
(a) (In Thousands)
1995:
First Quarter $399,346 $ 47,371 $ 3,635
Second Quarter 479,609 88,778 43,353
Third Quarter 540,287 113,531 68,112
Fourth Quarter 442,732 54,749 7,819
1994:
First Quarter 429,658 58,561 11,043
Second Quarter 456,855 83,357 33,084
Third Quarter 545,531 64,853 (31,662)
Fourth Quarter 365,321 6,880 (95,220)
(a) See Note 2 herein for information regarding the recording of a
reserve for rate refund in December 1994.
(b) See Note 11 herein for information regarding the recording of
certain restructuring costs in 1994 and 1995.
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
1996 1995
(In Thousands)
ASSETS
<S> <C> <C>
Utility Plant:
Electric $7,037,184 $6,942,983
Natural gas 45,435 45,789
Steam products 79,701 77,551
Property under capital leases 74,384 77,918
Construction work in progress 166,053 148,043
Nuclear fuel under capital lease 53,737 69,853
---------- ----------
Total 7,456,494 7,362,137
Less - accumulated depreciation and 2,802,750 2,664,943
amortization
---------- ----------
Utility plant - net 4,653,744 4,697,194
---------- ----------
Other Property and Investments:
Decommissioning trust fund 37,753 32,943
Other - at cost (less accumulated depreciation 26,804 28,626
---------- ----------
Total 64,557 61,569
---------- ----------
Current Assets:
Cash and cash equivalents:
Cash 22,504 13,751
Temporary cash investments - at cost,
which approximates market:
Associated companies 47,980 46,336
Other 148,121 174,517
---------- ----------
Total cash and cash equivalents 218,605 234,604
Accounts receivable:
Customer (less allowance for doubtful accounts
of $1.6 million in 1996 and 1995) 121,376 110,187
Associated companies 1,158 1,395
Other 21,442 15,497
Accrued unbilled revenues 80,836 73,381
Deferred fuel costs 84,692 31,154
Accumulated deferred income taxes 58,324 43,465
Fuel inventory - at average cost 43,875 32,141
Materials and supplies - at average cost 90,117 91,288
Rate deferrals 103,498 97,164
Prepayments and other 23,215 15,566
---------- ----------
Total 847,138 745,842
---------- ----------
Deferred Debits and Other Assets:
Regulatory assets:
Rate deferrals 146,522 419,904
SFAS 109 regulatory asset - net 378,843 453,628
Unamortized loss on reacquired debt 55,570 61,233
Other regulatory assets 23,072 27,836
Long-term receivables 218,246 224,727
Other 180,883 169,125
---------- ----------
Total 1,003,136 1,356,453
---------- ----------
TOTAL $6,568,575 $6,861,058
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
1996 1995
(In Thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding
100 shares $114,055 $114,055
Paid-in capital 1,152,689 1,152,505
Retained earnings 322,054 357,704
---------- ----------
Total common shareholder's equity 1,588,798 1,624,264
Preference stock 150,000 150,000
Preferred stock:
Without sinking fund 136,444 136,444
With sinking fund 77,460 87,654
Long-term debt 2,030,294 2,175,471
---------- ----------
Total 3,982,996 4,173,833
---------- ----------
Other Noncurrent Liabilities:
Obligations under capital leases 88,778 108,078
Other 75,904 78,245
---------- ----------
Total 164,682 186,323
---------- ----------
Current Liabilities:
Currently maturing long-term debt 160,865 145,425
Accounts payable:
Associated companies 39,146 31,349
Other 92,823 136,528
Customer deposits 24,479 21,983
Taxes accrued 50,077 37,413
Interest accrued 60,428 56,837
Nuclear refueling reserve 8,544 22,627
Obligations under capital leases 39,343 37,773
Other 34,660 86,653
---------- ----------
Total 510,365 576,588
---------- ----------
Deferred Credits:
Accumulated deferred income taxes 1,207,996 1,177,144
Accumulated deferred investment tax credits 204,612 208,618
Deferred River Bend finance charges 39,778 58,047
Other 458,146 480,505
---------- ----------
Total 1,910,532 1,924,314
---------- ----------
Commitments and Contingencies (Notes 1 and 2)
TOTAL $6,568,575 $6,861,058
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF INCOME (LOSS)
For the Three and Nine Months Ended September 30, 1996 and 1995
(Unaudited)
Three Months Ended Nine Months Ended
1996 1995 1996 1995
(In Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Electric $572,040 $524,982 $1,501,707 $1,366,070
Natural gas 4,946 3,210 26,685 17,654
Steam products 15,144 12,095 45,936 35,518
-------- -------- ---------- ----------
Total 592,130 540,287 1,574,328 1,419,242
-------- -------- ---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 171,451 149,535 413,917 391,364
Purchased power 68,619 44,798 223,213 123,273
Nuclear refueling outage expenses 1,132 2,580 6,064 8,354
Other operation and maintenance 102,333 95,042 296,805 304,918
Depreciation, amortization, and decommissioning 51,417 50,606 154,172 151,337
Taxes other than income taxes 26,837 26,951 78,376 77,082
Income taxes 44,582 40,737 85,435 63,715
Amortization of rate deferrals 18,319 16,507 54,281 49,519
-------- -------- ---------- ----------
Total 484,690 426,756 1,312,263 1,169,562
-------- -------- ---------- ----------
Operating Income 107,440 113,531 262,065 249,680
-------- -------- ---------- ----------
Other Income (Deductions):
Allowance for equity funds used
during construction 705 253 1,937 770
Write-off of River Bend rate deferrals - - (194,498) -
Miscellaneous - net 55,140 6,213 65,770 17,823
Income taxes (17,988) (2,110) (1,277) (5,139)
-------- -------- ---------- ----------
Total 37,857 4,356 (128,068) 13,454
-------- -------- ---------- ----------
Interest Charges:
Interest on long-term debt 44,583 47,426 137,547 144,053
Other interest - net 10,349 2,588 12,258 4,681
Allowance for borrowed funds used
during construction (600) (239) (1,656) (700)
-------- -------- ---------- ----------
Total 54,332 49,775 148,149 148,034
-------- -------- ---------- ----------
Net Income (Loss) 90,965 68,112 (14,152) 115,100
Preferred and Preference Stock
Dividend Requirements and Other 7,212 7,341 21,497 22,357
-------- -------- ---------- ----------
Earnings (Loss) Applicable to Common Stock $83,753 $60,771 ($35,649) $92,743
======== ======== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENTERGY GULF STATES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1996 and 1995
(Unaudited)
1996 1995
(In Thousands)
<S> <C> <C>
Net income (loss) ($14,152) $115,100
Noncash items included in net income (loss):
Write-off of River Bend rate deferrals 194,498 -
Change in rate deferrals 54,281 49,519
Depreciation, amortization, and decommissioning 154,172 151,337
Deferred income taxes and investment tax credits 86,063 69,060
Allowance for equity funds used during construction (1,937) (770)
Changes in working capital:
Receivables (24,352) 41,808
Fuel inventory (11,734) (3,598)
Accounts payable (35,908) (21,476)
Taxes accrued 12,664 35,701
Interest accrued 3,591 4,254
Reserve for rate refund - (51,268)
Other working capital accounts (123,596) (53,032)
Decommissioning trust contributions (4,442) (2,959)
Provision for estimated losses and reserves (3,085) 7,417
Other (22,663) 3,174
-------- --------
Net cash flow provided by operating activities 263,400 344,267
-------- --------
Investing Activities:
Construction expenditures (122,349) (112,237)
Allowance for equity funds used during construction 1,937 770
Nuclear fuel purchases (22,193) -
Proceeds from sale/leaseback of nuclear fuel 23,592 -
-------- --------
Net cash flow used in investing activities (119,013) (111,467)
-------- --------
Financing Activities:
Proceeds from the issuance of long-term debt 780 2,277
Retirement of:
First mortgage bonds (79,234) -
Other long-term debt (50,425) (50,425)
Redemption of preferred and preference stock (10,179) (4,850)
Dividends paid on preferred and preference stock (21,328) (22,208)
-------- --------
Net cash flow used in financing activities (160,386) (75,206)
-------- --------
Net increase (decrease) in cash and cash equivalents (15,999) 157,594
Cash and cash equivalents at beginning of period 234,604 104,644
-------- --------
Cash and cash equivalents at end of period $218,605 $262,238
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $128,496 $136,526
Income taxes $80 $288
Noncash investing and financing activities:
Change in unrealized appreciation (depreciation) of
decommissioning trust assets ($765) $1,738
See Notes to Financial Statements.
</TABLE>
ENTERGY GULF STATES, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. COMMITMENTS AND CONTINGENCIES
Cajun - River Bend
The Company and Cajun, respectively, own 70% and 30% undivided
interests in River Bend (operated by the Company), and 42% and 58%
undivided interests in Big Cajun 2, Unit 3 (operated by Cajun).
These relationships have spawned a number of long-standing disputes
and claims between the parties. An agreement setting forth terms for
the resolution of all such disputes has been reached by the Company,
the Cajun bankruptcy trustee, and the RUS ,and approved by the United
States District Court for the Middle District of Louisiana (District
Court) on August 26, 1996 (Cajun Settlement). On September 6, 1996,
the Committee of Unsecured Creditors in the Cajun bankruptcy
proceeding filed a Notice of Appeal to the United States Court of
Appeals for the Fifth Circuit (Fifth Circuit), objecting that the
order approving the settlement was separate from the approval of a
plan of reorganization and therefore, improper. The Cajun Settlement
is subject to this appeal and approvals by the appropriate regulatory
agencies. Management believes that it is probable that the Cajun
Settlement will ultimately be approved and consummated.
The Cajun Settlement resolved Cajun's civil action against the
Company in which Cajun sought to rescind or terminate the Joint
Ownership Participation and Operating Agreement (Operating Agreement)
entered into on August 28, 1979, relating to River Bend. In that
suit, Cajun also sought to recover its alleged $1.6 billion
investment in the unit plus attorneys' fees, interest, and costs. A
trial on the portion of the suit by Cajun to rescind the Operating
Agreement was completed in March 1995. On October 24, 1995, the
District Court issued a memorandum opinion rejecting Cajun's fraud
claims and denying rescission. An appeal to the Fifth Circuit by the
Cajun bankruptcy trustee was stayed pending the Court's trial of the
breach of contract phase of the case. The Cajun Settlement resolves
both the issues on appeal and the breach of contract claims which
have not been tried.
In 1992, two member cooperatives of Cajun brought an additional
independent action to declare the Operating Agreement null and void,
based upon the Company's failure to get prior LPSC approval alleged
to be necessary. Prior to the bankruptcy proceedings, Cajun
intervened as a plaintiff in this action. The nullity claim of Cajun
in this action is encompassed in the Cajun Settlement. The Company
believes the suits are without merit and believes these cases are
resolved by the Cajun Settlement.
The Cajun Settlement, agreed to in principle on April 26, 1996,
by the Company, the Cajun bankruptcy trustee, and the RUS, Cajun's
largest creditor, was approved by the District Court on August 26,
1996. The terms include, but are not limited to, the following: (i)
Cajun's interest in River Bend will be turned over to the RUS, which
will have the option to retain the interest, sell it to a third
party, or transfer it to the Company at no cost; (ii) Cajun will set
aside a total of $125 million for its share of the decommissioning
costs of River Bend; (iii) Cajun will transfer certain transmission
assets to the Company; (iv) Cajun will settle transmission disputes
and be released from claims for payment under transmission
arrangements with the Company as discussed under "Cajun -
Transmission Service" below; (v) all funds paid by the Company into
the registry of the District Court will be returned to the Company;
(vi) Cajun will be released from its unpaid past, present, and future
liability for River Bend costs and expenses; and (vii) all litigation
between Cajun and the Company will be dismissed. Based on the
District Court's approval of the Cajun Settlement, the litigation
accrual established in 1994 for possible losses associated with the
Cajun-River Bend litigation was reversed in September 1996.
Cajun has not paid its full share of capital costs, operating
and maintenance expenses, and other costs for repairs and
improvements to River Bend since 1992. Cajun's unpaid portion of
River Bend operating and maintenance expenses (including nuclear
fuel) and capital costs for the nine months ended September 30, 1996,
was approximately $42.9 million. The cumulative cost to the Company
resulting from Cajun's failure to pay its full share of River Bend-
related costs, reduced by the proceeds from the sale by the Company
of Cajun's share of River Bend power, and payments into the registry
of the District Court for the Company's portion of expenses for Big
Cajun 2, Unit 3, was $17.0 million as of September 30, 1996, compared
with $31.1 million as of December 31, 1995. Cajun's unpaid portion
of the River Bend related costs is reflected in long-term receivables
with an offsetting reserve in other deferred credits. As discussed
above, the Cajun Settlement will conclude all disputes regarding the
non-payment by Cajun operating and maintenance expenses. Cajun
continues to pay its share of decommissioning costs for River Bend.
In its bankruptcy proceedings, Cajun filed a motion on January
10, 1995, to reject the Operating Agreement as a burdensome executory
contract. The Company responded on January 10, 1995, with a
memorandum opposing Cajun's motion. As discussed above, this matter
will be ended as a result of the Cajun Settlement.
On March 8, 1996, Southwestern Electric Power Company (SWEPCO),
the Company, and certain member cooperatives of Cajun filed with the
Bankruptcy Court a joint proposal to bring an end to the Cajun
bankruptcy proceeding. The proposal was submitted in response to a
bid procedure established by the Cajun bankruptcy trustee. On April
19, 1996, SWEPCO, the Company, and certain Cajun member cooperatives
filed a separate plan of reorganization with the court based upon
their earlier proposal. On April 22, 1996, the Cajun bankruptcy
trustee filed a plan of reorganization with the Bankruptcy Court
based on the proposal of two non-affiliated companies to take over
the non-nuclear operations of Cajun. All of the plans of
reorganization submitted to the Bankruptcy Court have incorporated
the Cajun Settlement as an integral condition to the effectiveness of
their plan. The timing and completion of the reorganization plan
depends on Bankruptcy Court approval and any required regulatory
approvals.
See Note 8 in the Annual Financial Statements for additional
information regarding the Cajun litigation, Cajun's bankruptcy
proceedings, and related filings.
Cajun - Transmission Service
The Company and Cajun are parties to FERC proceedings relating
to transmission service charge disputes. As discussed above, these
disputes will end upon the implementation of the Cajun Settlement.
See Note 8 in the Annual Financial Statements for additional
information regarding these FERC proceedings and FERC orders issued
as a result of such proceedings.
Under the Company's interpretation of a 1992 FERC order, as
modified by FERC's orders issued on August 3, 1995, and October 2,
1995, and as agreed to by the Cajun bankruptcy trustee, Cajun would
owe the Company approximately $68.8 million as of September 30, 1996.
The Company further estimates that if it were to prevail in its May
1992 motion for rehearing and on certain other issues decided
adversely to the Company in the February 1995, August 1995, and
October 1995 FERC orders, which the Company has appealed, Cajun would
owe the Company approximately $154.1 million as of September 30,
1996. If Cajun were to prevail in its May 1992 motion for rehearing
to FERC, and if the Company were not to prevail in its May 1992
motion for rehearing to FERC, and if Cajun were to prevail in
appealing FERC's August and October 1995 orders, the Company
estimates it would owe Cajun approximately $107.6 million as of
September 30, 1996. The above amounts are exclusive of a $7.3
million payment by Cajun on December 31, 1990, which the parties
agreed to apply to the disputed transmission service charges.
Pending FERC's ruling on the May 1992 motions for rehearing, the
Company has continued to bill Cajun utilizing the historical billing
methodology and has recorded underpaid transmission charges,
including interest, in the amount of $142.3 million as of September
30, 1996. This amount is reflected in long-term receivables with an
offsetting reserve in other deferred credits. FERC has determined
that the collection of the pre-petition debt of Cajun is an issue
properly decided in the bankruptcy proceeding. Refer to "Cajun -
River Bend" above for a discussion of the Cajun Settlement.
Capital Requirements and Financing
See Note 8 in the Annual Financial Statements for information
on the Company's construction expenditures (excluding nuclear fuel),
and long-term debt & preferred stock maturities and cash sinking fund
requirements for the period 1996-1998.
Nuclear Insurance, Spent Nuclear Fuel, and Decommissioning Costs
See Note 8 in the Annual Financial Statements for information
on nuclear liability, property and replacement power insurance,
related NRC regulations, the disposal of spent nuclear fuel, other
high-level radioactive waste, and decommissioning costs associated
with River Bend.
The Commission has questioned certain of the financial
accounting practices of the electric utility industry regarding the
recognition, measurement, and classification of decommissioning costs
for nuclear plants in the financial statements of electric utilities.
In response to these questions, the FASB has been reviewing the
accounting for decommissioning and has expanded the scope of its
review to include liabilities related to the closure and removal of
all long-lived assets. An exposure draft of the proposed SFAS (which
proposed a 1997 effective date) was issued in February 1996. The
proposed SFAS would require measurement of the liability for closure
and removal of long-lived assets (including decommissioning) based on
discounted future cash flows. Those future cash flows should be
determined by estimating current costs and adjusting for inflation,
efficiencies that may be gained from experience with similar
activities, and consideration of reasonable future advances in
technology. It would also require that changes in the
decommissioning/closure cost liability resulting from changes in
assumptions be recognized with a corresponding adjustment to the
plant asset, and depreciation should be revised prospectively. The
proposed SFAS states that the initial recognition of the
decommissioning/closure cost liability would result in an asset that
should be presented with other plant costs on the financial
statements because the cost of decommissioning/closing the plant
would be recognized as part of the total cost of the plant asset. In
addition, there would be a regulatory asset recognized on the
financial statements to the extent the initial
decommissioning/closure liability has increased due to the passage of
time, and such costs are probable of future recovery.
After receiving comments on the exposure draft, the FASB has
decided that the effective date for the proposed SFAS will be later
than 1997, although a final effective date has not yet been
announced. If current electric utility industry accounting practices
with respect to nuclear decommissioning and other closure costs are
changed, annual provisions for such costs could increase, the
estimated cost for decommissioning/closure could be recorded as a
liability rather than as accumulated depreciation, and trust fund
income from decommissioning trusts could be reported as investment
income rather than as a reduction to decommissioning expense.
Environmental Issues
The Company has been designated as a potentially responsible
party for the clean-up of certain hazardous waste disposal sites. The
Company is currently negotiating with the EPA and state authorities
regarding the clean-up of certain of these sites.
Through September 30, 1996, $8.2 million has been expended on the
clean-up. As of September 30, 1996, a remaining recorded liability
of $21.5 million existed relating to the clean-up of the sites at
which the Company has been designated a potentially responsible
party.
NOTE 2. RATE AND REGULATORY MATTERS
River Bend
In May 1988, the PUCT granted the Company a permanent increase
in annual revenues of $59.9 million resulting from the inclusion in
rate base of approximately $1.6 billion of company-wide River Bend
plant investment and approximately $182 million of related Texas
retail jurisdiction deferred River Bend costs (Allowed Deferrals).
In addition, the PUCT disallowed as imprudent $63.5 million of
company-wide River Bend plant costs and placed in abeyance, with no
finding as to prudence, approximately $1.4 billion of company-wide
River Bend plant investment and approximately $157 million of Texas
retail jurisdiction deferred River Bend operating and carrying costs
(Abeyed Deferrals).
As discussed in Note 2 in the Annual Financial Statements ,
various appeals of the PUCT's order have been filed (Rate Appeal).
The Company filed an appeal with the Texas Supreme Court and, on
February 9, 1996, the Texas Supreme Court agreed to hear the appeal.
Oral arguments were held on March 19, 1996. The timing of a decision
by the Texas Supreme Court is not certain.
As of September 30, 1996, the River Bend plant costs disallowed
for retail ratemaking purposes in Texas and the River Bend plant
costs held in abeyance totaled (net of taxes and depreciation)
approximately $12 million and $268 million, respectively. Allowed
Deferrals were approximately $78 million, net of taxes and
amortization, as of September 30, 1996. The Company estimates it has
collected approximately $199 million of revenues as of September 30,
1996, as a result of the originally ordered rate treatment by the
PUCT of these deferred costs. If recovery of the Allowed Deferrals
is not upheld, future revenues based thereon could be lost, and no
assurance can be given as to whether or not refunds to customers of
revenue received based upon such deferred costs would be required.
During the first quarter of 1996, the Company wrote off Abeyed
Deferrals of $169 million, net of tax, in accordance with SFAS 121,
which became effective January 1, 1996, but it has made no write-offs
or reserves for the River Bend plant-related costs. A general remand
by the Texas Supreme Court in the Rate Appeal would enable the
Company to seek recovery of the Abeyed Deferrals. Based on advice
from Clark, Thomas & Winters, A Professional Corporation, legal
counsel of record in the Rate Appeal, management believes that it is
reasonably possible that the case will be remanded to the PUCT and
that the PUCT will be allowed to rule on the prudence of the abeyed
River Bend plant costs. Management and legal counsel are unable to
predict the amount, if any, of abeyed and previously disallowed River
Bend plant costs that ultimately might be disallowed by the PUCT. As
of September 30, 1996, a net of tax write-off of up to $280 million
could be required if the PUCT ultimately issues an adverse ruling on
the abeyed and disallowed plant costs.
The following factors support management's position that a loss
contingency requiring accrual has not occurred, and its belief that
all, or substantially all, of the abeyed plant costs will ultimately
be recovered:
1. The $1.4 billion of abeyed River Bend plant costs have never
been ruled imprudent and disallowed by the PUCT;
2. Analysis by Sandlin Associates, which supports the prudence
of substantially all of the abeyed construction costs;
3. Historical inclusion by the PUCT of prudent construction
costs in rate base; and
4. The analysis of the Company's internal legal staff, which
has considerable experience in Texas rate case litigation.
Additionally, based on advice from Clark, Thomas & Winters,
management believes that it is reasonably possible that the Allowed
Deferrals will continue to be recovered in rates, and that it is
reasonably possible that the Abeyed Deferrals will be recovered in
rates to the extent that the $1.4 billion of abeyed River Bend plant
is recovered.
Filings with the LPSC
See Note 2 in the Annual Financial Statements for a discussion
of the Company's required earnings analysis filing with the LPSC for
the test year preceding the Merger (1993). The Company appealed to
the Louisiana Supreme Court the 1994 LPSC order for an annual rate
reduction of $12.7 million. During the appeal, the Company's
preliminary injunction from the appropriate state District Court,
relating to the $8.3 million earnings effect of a 1994 change in
accounting for unbilled revenues, remained in effect. On July 2,
1996, the Louisiana Supreme Court ruled on the appeal. The Court
found that the LPSC ruled incorrectly on the treatment of the initial
balance of unbilled revenues and the revenue annualization
adjustment. As a result, the Company will not be required to refund
the $8.3 million. The case, which included other disputed matters,
was remanded to the LPSC for further proceedings.
On May 31, 1995, the Company filed its second required post-
Merger earnings analysis with the LPSC. Hearings on this review were
held in December 1995. On October 4, 1996, the LPSC issued an order
requiring a $33.3 million annual base rate reduction and a $9.6
million refund. One component of the rate reduction removes from
base rates approximately $13.4 million annually of costs that will be
recovered in the future through the fuel adjustment clause. On
October 23, 1996, the Company obtained an injunction to stay this
order, except insofar as the order requires the $13.4 million
reduction, which the Company has agreed to implement. The Company
plans to appeal the order to the appropriate state District Court.
In addition, the LPSC order provides for the recovery of $6.8 million
annually related to certain gas transportation and storage facilities
costs (see "LPSC Fuel Cost Review" below).
On May 31, 1996, the Company filed its third required post-
Merger earnings analysis with the LPSC. Based on this earnings
filing, on June 1, 1996, a $5.3 million annual rate reduction went
into effect. Hearings on this filing are scheduled for December
1996.
Filings with the PUCT
On December 6, 1995, the Company filed a petition with the PUCT
for reconciliation of fuel and purchased power expenses for the
period January 1, 1994, through June 30, 1995. The Company believes
that there was an under-recovered fuel balance, including interest,
of $22.4 million as of June 1995. Hearings began in September 1996,
and a final action by the PUCT is not expected until January 1997.
Management is unable to predict the final outcome of this proceeding.
In accordance with the Merger agreement, the Company is required
to file a rate proceeding with the PUCT in November 1996. However,
in April 1996, certain cities served by the Company (Cities)
instituted investigations of the reasonableness of the Company's
rates. In May 1996, the Cities agreed to forego their investigation
based on the assurance that any rate decrease ordered in the November
1996 filing will be retroactive to June 1, 1996, and accrue interest
until refunded. The agreement further provides that no base rate
increase will be retroactive.
LPSC Fuel Cost Review
See Note 2 in the Annual Financial Statements for a discussion
of the LPSC's review of the Company's fuel costs for the period
October 1988 through September 1991 (Phase I) and the Company's
subsequent appeal of $13.9 million of fuel costs disallowed by the
LPSC. On April 15, 1996, the appropriate state District Court
affirmed the LPSC decision. The Company has appealed this decision
to the Louisiana Supreme Court. The Company has reached a settlement
with the LPSC on one of the components of the disallowed fuel costs.
See "October 1996 LPSC Settlement" below.
In September 1996, the LPSC completed the second phase of their
review of the Company's fuel costs, which review covered the period
October 1991 through December 1994 (Phase II). On October 7, 1996,
the LPSC issued an order requiring a $34.2 million refund. The
ordered refund includes a disallowance of $14.3 million of capital
costs (including interest) related to certain gas transportation and
storage facilities, which were recovered through the fuel clause.
However, the LPSC order provides that the Company may recover these
costs in the future through base rates by establishing a regulatory
asset. As discussed above, the LPSC order in the second post-Merger
earnings analysis provides for the recovery of $6.8 million annually
related to gas transportation and storage facilities costs through
base rates. On October 23, 1996, the Company received an injunction
to stay this order, except insofar as the order requires the $14.3
million refund, and plans to appeal the order to the appropriate
state District Court. See "October 1996 LPSC Settlement" below.
October 1996 LPSC Settlement
In October 1996, the Company and the LPSC reached an agreement
whereby the Company agreed to (i) refund certain capital costs
related to gas transportation and storage facilities that were at
issue in the Phase I and Phase II fuel cost reviews and (ii) refund
similar costs recovered subsequent to the Phase II fuel cost review.
This will result in a total refund to customers of approximately
$32.1 million including interest. In the future, the Company will be
permitted to recover through base rates the capital costs related to
such gas transportation and storage facilities. As a part of the
settlement, which covered post-Phase II costs of such facilities in
addition to the costs addressed by the LPSC's order for the second
post-Merger earnings analysis, the Company will be permitted to
recover through base rates $1.3 million annually in addition to the
$6.8 million annual recovery discussed above for a total annual
recovery of $8.1 million. The settlement provides that this amount
will be applied as an offset against a refund, if any, required by a
final judgment in the Company's appeal of the second post-Merger
earnings review order.
NOTE 3. LONG-TERM DEBT
On November 1, 1996, the Company retired $75 million of its
6.67% Series First Mortgage Bonds upon maturity.
NOTE 4. RESTRUCTURING COSTS
In 1994 and 1995, Entergy Corporation and its subsidiaries,
including the Company, implemented various restructuring programs to
reduce the number of employees and consolidate offices and
facilities. The programs were designed to reduce costs and improve
operating efficiencies in order to enable Entergy and its
subsidiaries to become low-cost producers. The liability as of
December 31, 1995, the adjustments made in 1996, the payments made in
1996 and the liability as of September 30, 1996, were $5.4 million,
$.8 million, $5.2 million and $1.0 million, respectively
The restructuring charges shown above primarily include employee
severance costs related to the expected termination of approximately
625 employees in various groups. As of September 30, 1996,
approximately 650 employees had either been terminated or accepted
voluntary separation packages under the restructuring plan.
NOTE 5. ACCOUNTING ISSUES
New Accounting Standard - In March 1995, the FASB issued SFAS
121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of", which became effective January 1,
1996. This statement describes circumstances which may result in
assets being impaired, in addition to providing criteria for
recognition and measurement of asset impairment. In the first
quarter of 1996, the Company's regulatory assets of $169 million (net
of tax) related to Texas retail deferred River Bend operating and
carrying costs and $5 million (net of tax) related to Louisiana
retail deferred River Bend operating costs were written off under the
provisions of SFAS 121. See Note 1 in the Annual Financial
Statements for additional details regarding other assets and
operations potentially impacted in the future by the requirements of
SFAS 121 and the process for periodically reviewing those assets and
operations for impairment.
In the opinion of the Company the accompanying unaudited
condensed financial statements contain all adjustments (consisting
primarily of normal recurring accruals and reclassifying previously
reported amounts to conform to current classifications) necessary for
a fair statement of the results for the interim periods presented.
However, the business of the Company is subject to seasonal
fluctuations, with the peak period occurring during the summer
months. The results for the interim periods presented should not be
used as a basis for estimating results of operations for a full year.
<PAGE>
No person has been authorized to
give any information or to make any
representations other than those 3,400,000 Preferred Securities
contained in this Prospectus, and,
if given or made, such information
or representations must not be ENTERGY GULF STATES
relied upon as having been
authorized. This Prospectus does CAPITAL I
not constitute an offer to sell or a
solicitation of an offer to buy any
securities other than the securities _____%
described in this Prospectus or an
offer to sell or the solicitation of Cumulative Quarterly
an offer to buy such securities in Income Preferred Securities,
any circumstances in which such Series A (QUIPSsm)
offer or solicitation is unlawful.
Neither the delivery of this fully and unconditionally
Prospectus nor any sale made guaranteed
hereunder shall, under any
circumstances, create any as set forth herein by
implication that there has been no
change in the affairs of the Company ENTERGY GULF STATES, INC.
since the date hereof or that the
information contained herein is
correct as of any time subsequent to ____________________
its date.
PROSPECTUS
TABLE OF CONTENTS ____________________
Available Goldman, Sachs & Co.
Information......................... ____________________
Incorporation of Certain Documents
by Reference............ ____________________
Risk Factors......................
The Company....................... Representatives of the
Entergy Gulf States Capital I..... Underwriters
Ratio of Earnings to Fixed Charges
Selected Financial Data...........
Capitalization....................
Management's Financial Discussion
and Analysis....................
Accounting Treatment..............
Use of Proceeds...................
Description of the Preferred
Securities......................
Description of the Guarantee......
Description of the Junior
Subordinated Debentures............
Relationship Among the Preferred
Securities, the Junior Subordinated
Debentures and the Guarantee....
Certain United States Federal
Income Tax
Considerations......................
Underwriting......................
Experts...........................
Legal Opinions....................
Index to the Financial Statements.
=================================== ============================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Filing Fees-Securities and Exchange Commission:
Registration Statement $ 25,758
*Rating Agencies' fees 25,000
*Trustees' fees 6,000
*Fees of Company's Counsel:
Richards, Layton & Finger, P.A........ 35,000
Reid & Priest LLP 50,000
*Fees of Entergy Services, Inc. 35,000
*Accounting fees 12,000
*Printing and engraving costs 60,000
*Miscellaneous expenses (including Blue-Sky
expenses) 20,000
---------
*Total Expenses $268,758
=========
___________________
*Estimated
Item 15. Indemnification of Directors and Officers.
The Company has insurance covering its expenditures which
might arise in connection with its lawful indemnification of its
directors and officers for certain of their liabilities and
expenses. Directors and officers of the Company also have
insurance which insures them against certain other liabilities
and expenses. The corporation laws of Texas permit
indemnification of directors and officers in a variety of
circumstances, which may include liabilities under the Securities
Act of 1933, as amended (the "Securities Act"), and under the
Company's Restated Articles of Incorporation, its officers and
directors may generally be indemnified to the full extent of such
laws.
Item 16. Exhibits.
1.01 Form of Underwriting Agreement relating to Preferred
Securities.
**4.01 Restated Articles of Incorporation of the Company and
amendments thereto through April 22, 1996 (filed as
Exhibit 3(b) to the Form 10-Q of the company for the
quarter ended March 31, 1996 in 1-2703).
**4.02 By-Laws of the Company as amended effective May 5, 1994,
and as presently in effect (filed as Exhibit A-12 in 70-
8059).
4.03 Form of Indenture for Unsecured Subordinated Debt
Securities relating to Trust Securities.
4.04 Certificate of Trust of Entergy Gulf States Capital I.
4.05 Trust Agreement of Entergy Gulf States Capital I.
4.06 Form of Amended and Restated Trust Agreement of Entergy
Gulf States Capital I.
4.07 Form of Preferred Security Certificate of Entergy Gulf
States Capital I (included as Exhibit D of Exhibit 4.06
hereto).
4.08 Form of Guarantee Agreement in respect of Entergy Gulf
States Capital I.
4.09 Form of Officer's Certificate establishing terms of
Junior Subordinated Debentures (including form of Junior
Subordinated Debenture)
4.10 Form of Expense Agreement in respect of Entergy Gulf
States Capital I (included as Exhibit C of Exhibit 4.06
hereto).
5.01 Opinion of Laurence M. Hamric, General Attorney -
Corporate and Securities of Entergy Services, Inc.,
relating to the validity of the Junior Subordinated
Debentures and the Guarantee.
5.02 Opinion of Richards, Layton & Finger, P.A., special
Delaware counsel, relating to the validity of the
Preferred Securities of Entergy Gulf States Capital I.
5.03 Opinion of Reid & Priest LLP, relating to the validity
of the Junior Subordinated Debentures and the
Guarantees.
8.01 Opinion of Reid & Priest LLP, as to United States tax
matters (included in Exhibit 5.03 hereto).
[Insert Material Contracts]
**10.01 Guaranty Agreement, dated July 1, 1976, between GSU and
American Bank and Trust Company (C and D to Form 8-K,
dated August 6, 1976 in 1-2703).
**10.02 Lease of Railroad Equipment, dated as of December 1,
1981, between The Connecticut Bank and Trust Company as
Lessor and GSU as Lessee and First Supplement, dated as
of December 31, 1981, relating to 605 One Hundred-Ton
Unit Train Steel Coal Porter Cars (4-12 to Form 10-K for
the year ended December 31, 1981 in 1-2703).
**10.03 Guaranty Agreement, dated August 1, 1992, between GSU
and Hibernia National Bank, relating to Pollution
Control Revenue Refunding Bonds of the Industrial
Development Board of the Parish of Calcasieu, Inc.
(Louisiana) (10-1 to Form 10-K for the year ended
December 31, 1992 in 1-2703).
**10.04 Guaranty Agreement, dated January 1, 1993, between GSU
and Hancock Bank of Louisiana, relating to Pollution
Control Revenue Refunding Bonds of the Parish of Pointe
Coupee (Louisiana) (10-2 to Form 10-K for the year ended
December 31, 1992 in 1-2703).
**10.05 Deposit Agreement, dated as of December 1, 1983 between
GSU, Morgan Guaranty Trust Co. as Depositary and the
Holders of Despositary Receipts, relating to the Issue
of 900,000 Depositary Preferred Shares, each
representing 1/2 share of Adjustable Rate Cumulative
Preferred Stock, Series E-$100 Par Value (4-17 to Form
10-K for the year ended December 31, 1983 in 1-2703).
**10.06 Letter of Credit and Reimbursement Agreement, dated
December 27, 1985, between GSU and Westpack Banking
Corporation relating to Variable Rate Demand Pollution
Control Revenue Bonds of the Parish of West Feliciana,
State of Louisiana, Series 1985-D (4-26 to Form 10-K for
the year ended December 31, 1985 in 1-2703) and Letter
Agreement amending same dated October 20, 1992 (10-3 to
Form 10-K for the year ended December 31, 1992 in 1-
2703).
**10.07 Reimbursement and Loan Agreement, dated as of April 23,
1986, by and between GSU and The Long-Term Credit Bank
of Japan, Ltd., relating to Multiple Rate Demand
Pollution Control Revenue Bonds of the Parish of West
Feliciana, State of Louisiana, Series 1985 (4-26 to Form
10-K, for the year ended December 31, 1986 in 1-2703)
and Letter Agreement amending same, dated February 19,
1993 (10 to Form 10-K for the year ended December 31,
1992 in 1-2703).
**10.08 Agreement effective February 1, 1964, between Sabine
River Authority, State of Louisiana, and Sabine River
Authority of Texas, and GSU, Central Louisiana Electric
Company, Inc., and Louisiana Power & Light Company, as
supplemented (B to Form 8-K, dated May 6, 1964, A to
Form 8-K, dated October 5, 1967, A to Form 8-K, dated
May 5, 1969, and A to Form 8-K, dated December 1, 1969,
in 1-2708).
**10.09 Joint Ownership Participation and Operating Agreement
regarding River Bend Unit 1 Nuclear Plant, dated August
20, 1979, between GSU, Cajun, and SRG&T; Power
Interconnection Agreement with Cajun, dated June 26,
1978, and approved by the REA on August 16, 1979,
between GSU and Cajun; and Letter Agreement regarding
CEPCO buybacks, dated August 28, 1979, between GSU and
Cajun (2, 3, and 4, respectively, to Form 8-K, dated
September 7, 1979, in 1-2703).
**10.10 Ground Lease, dated August 15, 1980, between Statmont
Associates Limited Partnership (Statmont) and GSU, as
amended (3 to Form 8-K, dated August 19, 1980, and A-3-b
to Form 10-Q for the quarter ended September 30, 1983 in
1-2703).
**10.11 Lease and Sublease Agreement, dated August 15, 1980,
between Statmont and GSU, as amended (4 to Form 8-K,
dated August 19, 1980, and A-3-c to Form 10-Q for the
quarter ended September 30, 1983 in 1-2703).
**10.12 Lease Agreement, dated September 18, 1980, between BLC
Corporation and GSU (1 to Form 8-K, dated October 6,
1980 in 1-2703).
**10.13 Joint Ownership Participation and Operating Agreement
for Big Cajun, between GSU, Cajun Electric Power
Cooperative, Inc., and Sam Rayburn G&T, Inc, dated
November 14, 1980 (6 to Form 8-K, dated January 29, 1981
in 1-2703); Amendment No. 1, dated December 12, 1980 (7
to Form 8-K, dated January 29, 1981 in 1-2703);
Amendment No. 2, dated December 29, 1980 (8 to Form 8-K,
dated January 29, 1981 in 1-2703).
**10.14 Agreement of Joint Ownership Participation between
SRMPA, SRG&T and GSU, dated June 6, 1980, for Nelson
Station, Coal Unit #6, as amended (8 to Form 8-K, dated
June 11, 1980, A-2-b to Form 10-Q For the quarter ended
June 30, 1982; and 10-1 to Form 8-K, dated February 19,
1988 in 1-2703).
**10.15 Agreements between Southern Company and GSU, dated
February 25, 1982, which cover the construction of a 140-
mile transmission line to connect the two systems,
purchase of power and use of transmission facilities (10-
31 to Form 10-K, for the year ended December 31, 1981 in
1-2703).
**10.16 Executive Income Security Plan, effective October 1,
1980, as amended, continued and completely restated
effective as of March 1, 1991 (10-2 to Form 10-K for the
year ended December 31, 1991 in 1-2703).
**10.17 Transmission Facilities Agreement between GSU and
Mississippi Power Company, dated February 28, 1982, and
Amendment, dated May 12, 1982 (A-2-c to Form 10-Q for
the quarter ended March 31, 1982 in 1-2703) and
Amendment, dated December 6, 1983 (10-43 to Form 10-K,
for the year ended December 31, 1983 in 1-2703).
**10.18 Lease Agreement dated as of June 29, 1983, between GSU
and City National Bank of Baton Rouge, as Owner Trustee,
in connection with the leasing of a Simulator and
Training Center for River Bend Unit 1 (A-2-a to Form 10-
Q for the quarter ended June 30, 1983 in 1-2703) and
Amendment, dated December 14, 1984 (10-55 to Form 10-K,
for the year ended December 31, 1984 in 1-2703).
**10.19 Participation Agreement, dated as of June 29, 1983,
among GSU, City National Bank of Baton Rouge,
PruFunding, Inc. Bank of the Southwest National
Association, Houston and Bankers Life Company, in
connection with the leasing of a Simulator and Training
Center of River Bend Unit 1 (A-2-b to Form 10-Q for the
quarter ended June 30, 1983 in 1-2703).
**10.20 Tax Indemnity Agreement, dated as of June 29, 1983,
between GSU and PruFunding, Inc., in connection with the
leasing of a Simulator and Training Center for River
Bend Unit I (A-2-c to Form 10-Q for the quarter ended
June 30, 1993 in 1-2703).
**10.21 Agreement to Lease, dated as of August 28, 1985, among
GSU, City National Bank of Baton Rouge, as Owner
Trustee, and Prudential Interfunding Corp., as Trustor,
in connection with the leasing of improvement to a
Simulator and Training Facility for River Bend Unit I
(10-69 to Form 10-K, for the year ended December 31,
1985 in 1-2703).
**10.22 First Amended Power Sales Agreement, dated December 1,
1985 between Sabine River Authority, State of Louisiana,
and Sabine River Authority, State of Texas, and GSU,
Central Louisiana Electric Co., Inc., and Louisiana
Power and Light Company (10-72 to Form 10-K for the year
ended December 31, 1985 in 1-2703).
**10.23 Deferred Compensation Plan for Directors of GSU and
Varibus Corporation, as amended January 8, 1987, and
effective January 1, 1987 (10-77 to Form 10-K for the
year ended December 31, 1986 in 1-2703). Amendment
dated December 4, 1991 (10-3 to Amendment No. 8 in
Registration No. 2-76551).
**10.24 Trust Agreement for Deferred Payments to be made by GSU
pursuant to the Executive Income Security Plan, by and
between GSU and Bankers Trust Company, effective
November 1, 1986 (10-78 to Form 10-K for the year ended
December 31, 1986 in 1-2703).
**10.25 Trust Agreement for Deferred Installments under GSU's
Management Incentive Compensation Plan and
Administrative Guidelines by and between GSU and Bankers
Trust Company, effective June 1, 1986 (10-79 to Form 10-
K for the year ended December 31, 1986 in 1-2703).
**10.26 Nonqualified Deferred Compensation Plan for Officers,
Nonemployee Directors and Designated Key Employees,
effective December 1, 1985, as amended, continued and
completely restated effective as of March 1, 1991 (10-3
to Amendment No. 8 in Registration No. 2-76551).
**10.27 Trust Agreement for GSU's Nonqualified Directors and
Designated Key Employees by and between GSU and First
City Bank, Texas-Beaumont, N.A. (now Texas Commerce
Bank), effective July 1, 1991 (10-4 to Form 10-K for the
year ended December 31, 1992 in 1-2703).
**10.28 Lease Agreement, dated as of June 29, 1987, among GSG&T,
Inc., and GSU related to the leaseback of the Lewis
Creek generating station (10-83 to Form 10-K for the
year ended December 31, 1988 in 1-2703).
**10.29 Nuclear Fuel Lease Agreement between GSU and River Bend
Fuel Services, Inc. to lease the fuel for River Bend
Unit 1, dated February 7, 1989 (10-64 to Form 10-K for
the year ended December 31, 1988 in 1-2703).
**10.30 Trust and Investment Management Agreement between GSU
and Morgan Guaranty and Trust Company of New York (the
"Decommissioning Trust Agreement) with respect to
decommissioning funds authorized to be collected by GSU,
dated March 15, 1989 (10-66 to Form 10-K for the year
ended December 31, 1988 in 1-2703).
**10.31 Amendment No. 2 dated November 1, 1995 between GSU and
Mellon Bank to Decommissioning Trust Agreement.
**10.32 Credit Agreement, dated as of December 29, 1993, among
River Bend Fuel Services, Inc. and Certain Commercial
Lending Institutions and CIBC Inc. as Agent for the
Lenders ((d) 34 to Form 10-K for year ended December 31,
1994).
**10.33 Amendment No. 1 dated as of January 31, to Credit
Agreement, dated as of December 31, 1993, among River
Bend Fuel Services, Inc. and certain commercial lending
institutions and CIBC Inc. as agent for Lenders.
**10.34 Partnership Agreement by and among Conoco Inc., and GSU,
CITGO Petroleum Corporation and Vista Chemical Company,
dated April 28, 1988 (10-67 to Form 10-K for the year
ended December 31, 1988 in 1-2703).
**10.35 Gulf States Utilities Company Executive Continuity Plan,
dated January 18, 1991 (10-6 to Form 10-K for the year
ended December 31, 1990 in 1-2703).
**10.36 Trust Agreement for GSU's Executive Continuity Plan, by
and between GSU and First City Bank, Texas-Beaumont,
N.A. (now Texas Commerce Bank), effective May 20, 1991
(10-5 to Form 10-K for the year ended December 31, 1992
in 1-2703).
**10.37 Gulf States Utilities Board of Directors' Retirement
Plan, dated February 15, 1991 (10-8 to Form 10-K for the
year ended December 31, 1990 in 1-2703).
**10.38 Gulf States Utilities Company Employees' Trustee
Retirement Plan effective July 1, 1955 as amended,
continued and completely restated effective January 1,
1989; and Amendment No.1 effective January 1, 1993 (10-6
to Form 10-K for the year ended December 31, 1992 in 1-
2703).
**10.39 Agreement and Plan of Reorganization, dated June 5,
1992, between GSU and Entergy Corporation (2 to Form 8-
K, dated June 8, 1992 in 1-2703).
**10.40 Gulf States Utilities Company Employee Stock Ownership
Plan, as amended, continued, and completely restated
effective January 1, 1984, and January 1, 1985 (A to
Form 11-K, dated December 31, 1985 in 1-2703).
**10.41 Trust Agreement under the Gulf States Utilities Company
Employee Stock Ownership Plan, dated December 30, 1976,
between GSU and the Louisiana National Bank, as Trustee
(2-A to Registration No. 2-62395).
**10.42 Letter Agreement dated September 7, 1977 between GSU and
the Trustee, delegating certain of the Trustee's
functions to the ESOP Committee (2-B to Registration
Statement No. 2-62395).
**10.43 Gulf States Utilities Company Employees Thrift Plan as
amended, continued and completely restated effective as
of January 1, 1992 (28-1 to Amendment No. 8 to
Registration No. 2-76551).
**10.44 Restatement of Trust Agreement under the Gulf States
Utilities Company Employees Thrift Plan, reflecting
changes made through January 1, 1989, between GSU and
First City Bank, Texas-Beaumont, N.A., (now Texas
Commerce Bank ), as Trustee (2-A to Form 8-K dated
October 20, 1989 in 1-2703).
**10.45 Operating Agreement between Entergy Operations and GSU,
dated as of December 31, 1993 (B-2(f) to Rule 24
Certificate in 70-8059).
**10.46 Guarantee Agreement between Entergy Corporation and GSU,
dated as of December 31, 1993 (B-5(a) to Rule 24
Certificate in 70-8059).
**10.47 Service Agreement with Entergy Services, dated as of
December 31, 1993 (B-6(c) to Rule 24 Certificate in
70-8059).
**10.48 Amendment to Employment Agreement between J. L. Donnelly
and GSU, dated December 22, 1993 (10(d) 57 to Form 10-K
for the year ended December 31, 1993 in 1-2703).
**10.49 Assignment, Assumption and Amendment Agreement to Letter
of Credit and Reimbursement Agreement between GSU,
Canadian Imperial Bank of Commerce and Westpac Banking
Corporation (10(d) 58 to Form 10-K for the year ended
December 31, 1993 in 1-2703).
**10.50 Third Amendment, dated January 1, 1994, to Entergy
Corporation and Subsidiary Companies Intercompany Income
Tax Allocation Agreement (D-3(a) to Form U5S for the
year ended December 31, 1993).
**10.51 Refunding Agreement between GSU and West Feliciana
Parish (dated December 20, 1994 (B-12(a) to Rule 24
Certificate dated December 30, 1994 in 70-8375).
**12.01 Statement Re: Computation of Ratio of Earnings to Fixed
Charges (filed as Exhibit 99(b) to the Form 10-Q for the
quarter ended September 30, 1996 in 1-2703).
23.01 Consent of Coopers & Lybrand L.L.P.
23.02 Consent of Clarke, Winters & Thomas.
23.03 Consent of Sandlin Associates.
23.04 Consent of Lawrence M. Hamric (included in Exhibit 5.01
hereto).
23.05 Consent of Richards, Layton & Finger, P.A., (included in
Exhibit 5.02 hereto).
23.06 Consent of Reid & Priest LLP (included in Exhibit 5.03
hereto).
24.01 Powers of Attorney of certain officers and directors of
the Company (included herein at page II-5).
25.01 Statement of Eligibility under the Trust Indenture Act
of The Bank of New York, as Trustee for the Indenture
for Unsecured Subordinated Debt Securities relating to
Trust Securities.
25.02 Statement of Eligibility under the Trust Indenture Act
of The Bank of New York, as Property Trustee for the
Amended and Restated Trust Agreement of Entergy Gulf
States Capital I.
25.03 Statement of Eligibility under the Trust Indenture Act
of The Bank of New York, as Guarantee Trustee for the
Guarantee Agreement in respect of Entergy Gulf States
Capital I.
**99.01 Opinion of Clark, Thomas & Winters, A Professional
Corporation, dated September 30, 1992, regarding the
effect of the October 1, 1991, judgment in Entergy Gulf
States v. PUCT in the District Court of Travis County,
Texas (filed as Exhibit 99-1 in Registration No. 33-
48889).
**99.02 Opinion of Clark, Thomas & Winters, A Professional
Corporation, dated August 8, 1994, regarding recovery of
costs deferred pursuant to PUCT order in Docket 6525
(filed as Exhibit 99 (j) to the Quarterly Report on Form
10-Q for the quarter ended June 30, 1994, in File No. 1-
2703).
**99.03 Opinion of Clark, Thomas & Winters, A Professional
Corporation, confirming its opinions dated September 30,
1992, and August 8, 1994 (filed as Exhibit 99(l) to the
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, in File 1-2703).
__________
**Incorporated by reference herein
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) That, for purposes of determining any liability under
the Securities Act of 1933, the information omitted from the form
of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrants pursuant to Rule 424(b) (1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To provide to the underwriters at the closing specified
in the underwriting agreements certificates in such denominations
and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
(4) That, insofar as indemnification for liabilities
arising under the Securities Act of 1933, may be permitted to
directors, officers and controlling persons of the registrants
pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the registrants will,
unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by them is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
POWER OF ATTORNEY
Each director and/or officer of the registrant whose
signature appears below hereby appoints Gerald D. McInvale,
William J. Regan, Jr., Laurence M. Hamric and Denise C. Redmann,
and each of them severally, as his attorney-in-fact to sign in
his name and behalf, in any and all capacities stated below, and
to file with the Securities and Exchange Commission, any and all
amendments, including post-effective amendments, to this
registration statement, and the registrants hereby also appoint
each such named person as their attorney-in-fact with like
authority to sign and file any such amendments in their name and
behalf.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New Orleans, State of
Louisiana, on the 13th day of December, 1996.
ENTERGY GULF STATES, INC.
By /s/ William J. Regan, Jr.
William J. Regan, Jr.
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
----------- ----------- ---------
/s/ Edwin Lupberger Chairman of the Board, December 13, 1996
Edwin Lupberger President, Chief
Executive Officer and
Director
(Principal Executive
Officer)
/s/ Gerald D. McInvale Executive Vice President December 13, 1996
Gerald D. McInvale Chief Financial Officer,
and Director
(Principal Financial
Officer)
/s/ Louis E. Buck, Jr. Vice President and December 13, 1996
Louis E. Buck, Jr. Chief Accounting Officer
(Principal Accounting
Officer)
/s/ Michael B. Bemis Director December 13, 1996
Michael B. Bemis
/s/ John J. Cordaro Director December 13, 1996
John J. Cordaro
/s/ Frank F. Gallaher Director December 13, 1996
Frank F. Gallaher
/s/ Karen R. Johnson Director December 13, 1996
Karen R. Johnson
/s/ Jerry L. Maulden Director December 13, 1996
Jerry L. Maulden
/s/ Donald C. Hintz
Donald C. Hintz Director December 13, 1996
/s/ Jerry D. Jackson
Jerry D. Jackson Director December 13, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, the registrant, Entergy Gulf States Capital I,
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-2 and has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New
Orleans, State of Louisiana, on the 13th day of December, 1996.
Entergy Gulf States Capital I
By: Entergy Gulf States, Inc., as depositor
By: /s/ William J. Regan, Jr.
Name: William J. Regan, Jr.
Title: Vice President and Treasurer
EXHIBIT 1.01
_________ Preferred Securities
Entergy Gulf States Capital I
__% Cumulative Quarterly Income Preferred Securities, Series A
("QUIPS"_)
(liquidation preference $25 per preferred security)
fully and unconditionally guaranteed, as set forth herein, by
Entergy Gulf States, Inc.
UNDERWRITING AGREEMENT
_________ __, 1997
Goldman, Sachs & Co.
[Other Managers]
As representatives of the several
Underwriters named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies & Gentlemen:
The undersigned, Entergy Gulf States Capital I (the
"Trust"), a statutory business trust created under the Business
Trust Act of the State of Delaware (Title 12, Chapter 38 of the
Delaware Code, 12 Del. C. Section 3801 et seq.) (the "Delaware
Act"), proposes to issue and sell to the several underwriters
named in Schedule I hereto (the "Underwriters," which term, when
the context permits, shall also include any underwriters
substituted as hereinafter in Section 11 provided), for whom you
are acting as representatives (in such capacity, you shall
hereinafter be referred to as the "Representatives"),
______________ of its __% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per preferred
security), representing undivided beneficial interests in the
assets of the Trust (the "Preferred Securities"), as follows:
__________________________
_ QUIPS is a servicemark of Goldman, Sachs & Co.
1. Purchase and Sale. On the basis of the
representations and warranties herein contained, and subject to
the terms and conditions herein set forth, the Trust shall issue
and sell to each of the Underwriters named in Schedule I hereto,
and each Underwriter shall purchase from the Trust at the time
and place herein specified, severally and not jointly, the number
of Preferred Securities set forth opposite the name of such
Underwriter in Schedule I hereto at a purchase price of $25.00
per Preferred Security.
The Company (as defined herein) (a) agrees to issue the
Company Securities (as defined herein) concurrently with the
issue and sale of the Preferred Securities as contemplated herein
and (b) guarantees the timely performance by the Trust of its
obligations under this Section 1. The Trust agrees to purchase
the Debentures (as defined herein) with the proceeds of the Trust
Securities (as defined herein) as contemplated herein.
Because the proceeds of the sale of the Preferred
Securities, together with the proceeds from the sale by the Trust
to the Company of the Common Securities (as defined herein), will
be used to purchase the Debentures, the Company hereby agrees to
pay on the Closing Date (as defined herein) to Goldman, Sachs &
Co., for the accounts of the several Underwriters, as
compensation for their arranging the investment therein of such
proceeds, an amount equal to $_________ per Preferred Security
(or $_____________ in the aggregate).
2. Description of Preferred Securities. The Preferred
Securities will be guaranteed by Entergy Gulf States, Inc., a
Texas corporation (the "Company" and, together with the Trust,
the "Offerors"), with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Guarantee") pursuant
to, and to the extent set forth in, the Guarantee Agreement (the
"Guarantee Agreement"), dated as of __________ __, 1997, between
the Company and The Bank of New York, as trustee (the "Guarantee
Trustee"). Under an agreement as to expenses and liabilities
between the Company and the Trust, pursuant to the Trust
Agreement (as defined herein), dated as of __________ __, 1997
(the "Expense Agreement"), the Company will irrevocably and
unconditionally guarantee to each person or entity to whom the
Trust becomes indebted or liable the full payment of any costs,
expenses or liabilities of the Trust, subject to certain
exceptions therein.
The proceeds from the sale of the Preferred Securities
will be combined with the proceeds from the sale by the Trust to
the Company of its common securities representing undivided
beneficial interests in the assets of the Trust (the "Common
Securities" and, together with the Preferred Securities, the
"Trust Securities"), and will be used by the Trust to purchase
$________ aggregate principal amount of __% Junior Subordinated
Deferrable Interest Debentures, Series A, due ________ __, 2046
issued by the Company (the "Debentures" and, together with the
Guarantee, the "Company Securities"). The Trust Securities will
be issued pursuant to the Amended and Restated Trust Agreement of
the Trust, dated as of _________ __, 1997 (the "Trust
Agreement"), among the Company, as depositor, the Administrative
Trustees (as defined herein), The Bank of New York, as property
trustee (the "Property Trustee"), The Bank of New York
(Delaware), as Delaware trustee (the "Delaware Trustee"), and the
holders, from time to time, of undivided beneficial interests in
the assets of the Trust. The Debentures will be issued pursuant
to an Indenture, dated as of ________ __, 1997, as supplemented
by a certificate of an officer of the Company pursuant to
resolutions of the Board of Directors of the Company (the
"Indenture"), between the Company and The Bank of New York, as
trustee (the "Debenture Trustee"). The Preferred Securities and
the Company Securities are referred to herein as the
"Securities."
3. Representations and Warranties of the Offerors. Each of
the Offerors jointly and severally represents and warrants to the
several Underwriters, and covenants and agrees with the several
Underwriters, that:
(a) The Company is duly organized and validly existing as a
corporation in good standing under the laws of the State of Texas
and has the necessary corporate power and authority to conduct
the business that it is described in the Prospectus (as defined
herein) as conducting, to own and operate the properties owned
and operated by it in such business, to issue the Company
Securities, to enter into and perform its obligations under this
Underwriting Agreement, the Trust Agreement, the Indenture, the
Guarantee Agreement, the Expense Agreement and the Company
Securities, to purchase, own, and hold the Common Securities
issued by the Trust and to consummate the transactions herein and
therein contemplated.
(b) The Trust has been duly created and is validly
existing as a business trust in good standing under the Delaware
Act, has the power and authority to own its property, to conduct
its business as described in the Prospectus, to issue and sell
the Trust Securities, to enter into and perform its obligations
under this Underwriting Agreement and the Trust Securities and to
consummate the transactions herein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Trust; the Trust has conducted and will
conduct no business other than the transactions contemplated by
this Underwriting Agreement and described in the Prospectus; the
Trust is not a party to or otherwise bound by any agreement other
than those described in the Prospectus, and is not a party to any
action, suit or proceeding of any nature; the Trust is not and
will not be classified as an association taxable as a corporation
for United States federal income tax purposes; and the Trust is
and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
(c) The Offerors have filed with the Securities and
Exchange Commission (the "Commission") a registration statement
on Form S-2 (File Nos. 333-_____ and 333-_____-01) and a related
Preliminary Prospectus for the registration of the Securities
under the Securities Act of 1933, as amended (the "Securities
Act"), and such registration statement, as amended, has become
effective. The Offerors qualify for use of Form S-2 for the
registration of the Securities. Such registration statement, as
amended at the time it (or the most recent post-effective
amendment thereto) became effective, including the information
deemed to be part thereof pursuant to Rule 430A(b) under the
Securities Act, is hereinafter referred to as the "Registration
Statement", and the prospectus constituting a part thereof,
including the documents incorporated by reference therein
pursuant to Item 12 of Form S-2 under the Securities Act, in the
form filed pursuant to Rule 424(b)(1) or (b)(4) under the
Securities Act and as it may thereafter be amended or
supplemented pursuant to Section 6(d) hereof, is hereinafter
referred to as the "Prospectus," except that if any revised
prospectus shall be provided to the Underwriters by the Offerors
for use in connection with the offering of the Securities that
differs from the Prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act), the term "Prospectus"
shall refer to such revised prospectus from and after the time it
is first provided to the Underwriters for such use. For purposes
herein, "Preliminary Prospectus" shall mean any preliminary
prospectus included in the Registration Statement prior to the
time the Registration Statement became effective or filed with
the Commission pursuant to Rule 424(a) under the Securities Act.
(d) After the time of effectiveness of this Underwriting
Agreement and during the time specified in Section 6(d), the
Offerors will not file any amendment to the Registration
Statement or supplement to the Prospectus, without prior notice
to the Underwriters and to Winthrop, Stimson, Putnam & Roberts
("Counsel for the Underwriters"), or any such amendment or
supplement to which said Counsel shall reasonably object on legal
grounds in writing.
(e) The Registration Statement, at the time it became
effective, the Indenture, the Trust Agreement and the Guarantee
Agreement, at such time, and any Preliminary Prospectus, when
delivered to the Underwriters for their use in marketing the
Preferred Securities, fully complied, and the Prospectus, when
delivered to the Underwriters for their use in making
confirmations of sales of the Preferred Securities and at the
Closing Date, as it may then be amended or supplemented, will
fully comply, in all material respects with the applicable
provisions of the Securities Act, the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder or pursuant to said
rules and regulations did or will be deemed to comply therewith.
The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-2, on the date filed with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), fully complied in all material
respects with the applicable provisions of the Exchange Act and
the rules and regulations of the Commission thereunder or
pursuant to said rules and regulations did or will be deemed to
comply therewith. On the date the Registration Statement was
declared effective by the Commission under the Securities Act,
the Registration Statement did not, and on the date that any post-
effective amendment to the Registration Statement becomes
effective, the Registration Statement, as amended by any such
post-effective amendment, will not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the time that any Preliminary Prospectus was
delivered to the Underwriters for their use in marketing the
Preferred Securities, such Preliminary Prospectus did not contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. At the time the Prospectus is delivered to the
Underwriters for their use in making confirmations of sales of
the Preferred Securities and at the Closing Date, the Prospectus,
as it may then be amended or supplemented, will not contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not
misleading. The documents incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-2, on the date filed
with the Commission pursuant to the Exchange Act, did not contain
an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this
paragraph (e) shall not apply to statements or omissions made in
reliance upon and in conformity with written information
furnished to the Offerors by the Underwriters or on behalf of any
Underwriter specifically for use in connection with the
preparation of the Registration Statement or the Prospectus, as
they may be then amended or supplemented, or to any statements in
or omissions from the statements of eligibility on Form T-1 of
the Property Trustee, the Guarantee Trustee and the Debenture
Trustee, respectively, as they may be amended, filed as exhibits
to the Registration Statement (the "Form T-1s").
(f) The Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to
the Company against payment therefor as described in the
Registration Statement and Prospectus, will constitute validly
issued undivided beneficial interests in the assets of the Trust
and will be entitled to the benefits of the Trust Agreement; the
issuance of the Common Securities is not subject to preemptive or
other similar rights; at the Closing Date, all of the Common
Securities will be directly owned by the Company free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and the Common Securities will conform to the
description thereof contained in the Prospectus.
(g) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company.
(h) The Trust Agreement has been duly qualified under the
Trust Indenture Act, has been duly authorized by the Company and,
at the Closing Date, will have been duly executed and delivered
by the Company and each of the Administrative Trustees, and
assuming due authorization, execution and delivery of the Trust
Agreement by the Property Trustee and the Delaware Trustee, will
constitute a valid and binding instrument of the Company and the
Administrative Trustees, enforceable against the Company and the
Administrative Trustees in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting
creditors' rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding in equity
or at law); and the Trust Agreement will conform to the
description thereof in the Prospectus.
(i) The Guarantee Agreement has been duly qualified under
the Trust Indenture Act, has been duly authorized by the Company
and, at the Closing Date, will have been duly executed and
delivered by the Company, and assuming due authorization,
execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a valid and binding instrument
of the Company, enforceable against the Company in accordance
with its terms, except as limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other
similar laws affecting creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in
a proceeding in equity or at law); and the Guarantee and the
Guarantee Agreement will conform to the descriptions thereof
contained in the Prospectus.
(j) The Preferred Securities have been duly authorized by
the Trust Agreement and, on the Closing Date, will have been duly
executed by an Administrative Trustee and, when issued and
delivered against payment therefor in accordance with the
provisions of this Agreement and the Trust Agreement, will
constitute validly issued and (subject to the terms of the Trust
Agreement) fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will be entitled to the
benefits of the Trust Agreement; the issuance of the Preferred
Securities is not subject to preemptive or other similar rights;
holders of Preferred Securities will be entitled to the same
limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware; and the Preferred
Securities will conform to the description thereof contained in
the Prospectus.
(k) The Indenture has been duly qualified under the Trust
Indenture Act, has been duly authorized by the Company and, at
the Closing Date, will have been duly executed and delivered by
the Company, and assuming due authorization, execution and
delivery of the Indenture by the Debenture Trustee, will
constitute a valid and binding instrument of the Company,
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law); and the Indenture will conform
to the description thereof contained in the Prospectus.
(l) The Debentures have been duly authorized and, on the
Closing Date, will have been duly executed by the Company and,
when authenticated in the manner provided for in the Indenture
and delivered against payment therefor by the Trust as described
in the Prospectus, will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance
with their terms, except as limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other
similar laws affecting creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in
a proceeding in equity or at law) and will be entitled to the
benefits of the Indenture; and the Debentures will conform to the
description thereof contained in the Prospectus.
(m) The Expense Agreement has been duly authorized by the
Company and, at the Closing Date, will have been duly executed
and delivered by the Company, and will constitute a valid and
binding instrument of the Company, enforceable against the
Company in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law); and the Expense Agreement will conform to the description
thereof contained in the Prospectus.
(n) William J. Regan, Jr., Steven C. McNeal and Frank
Williford IV, in their capacities as administrative trustees (the
"Administrative Trustees") under the Trust Agreement, are
employees of the Company and have been duly authorized by the
Company to execute and deliver the Trust Agreement.
(o) The Trust is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(p) The Trust is not in violation of its Certificate of
Trust filed with the State of Delaware on December __, 1996 or
the Trust Agreement; the execution, delivery and performance by
the Company and the Trust of their respective obligations under
this Underwriting Agreement, the Trust Agreement, the Trust
Securities, the Indenture, the Guarantee Agreement, the Company
Securities and the Expense Agreement will not result in a breach
of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement
or instrument to which the Company or the Trust is now a party.
(q) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes.
(r) Except as set forth or contemplated in the Prospectus,
as it may then be amended or supplemented, the Company possesses
adequate franchises, licenses, permits, and other rights to
conduct its respective business and operations as now conducted,
without any known conflicts with the rights of others that could
have an adverse effect on the Company.
4. Offering. The Offerors are advised by the
Representatives that the Underwriters propose to make a public
offering of their respective portions of the Preferred Securities
as soon after the effectiveness of this Underwriting Agreement as
in their judgment the Underwriters deem advisable. The Offerors
are further advised by the Representatives that the Preferred
Securities will be offered to the public at the initial public
offering price specified in the Prospectus.
SECTION 5. Time and Place of Closing; Delivery to
Underwriters. Delivery of certificates for the Preferred
Securities and payment of the purchase price therefor by wire
transfer of immediately available funds shall be made at the
offices of Reid & Priest LLP, 40 West 57th Street, New York, New
York, at 10:00 A.M., New York time, on ________ __, 1997, or at
such other time on the same or such other day as shall be agreed
upon by the Offerors and the Representatives, or as may be
established in accordance with Section 11 hereof. The hour and
date of such delivery and payment are herein called the "Closing
Date."
Certificates for the Preferred Securities shall be in
definitive form and registered in such names and in such
denominations as the Underwriters shall request not later than
two full business days prior to the Closing Date. The
certificates evidencing the Preferred Securities shall be
delivered to the Representatives through the facilities of The
Depository Trust Company in New York, New York ("DTC") for the
account of the Representatives with any transfer taxes payable in
connection with the transfer of the Preferred Securities duly
paid, against payment of the purchase price therefor.
On the Closing Date, the Company will pay, or cause to
be paid, the compensation payable at such time to the
Underwriters pursuant to Section 1 hereof by wire transfer in
immediately available funds to an account designated by Goldman,
Sachs & Co., for the accounts of the several Underwriters.
6. Covenants of the Offerors. Each of the Offerors jointly
and severally covenants and agrees with the several Underwriters
that:
(a) Not later than the Closing Date, the Company will
deliver to the Representatives a copy of the Registration
Statement in the form that it became effective or a conformed
copy thereof, certified by an officer of the Company to be in
such form.
(b) The Company will deliver to the Underwriters as many
copies of the Prospectus (and any amendments or supplements
thereto) as the Underwriters may reasonably request.
(c) The Company will cause the Prospectus to be filed with,
or transmitted for filing to, the Commission pursuant to and in
compliance with Rule 424(b) and will advise the Representatives
promptly of the issuance of any stop order under the Securities
Act with respect to the Registration Statement or the institution
of any proceedings therefor of which either of the Offerors shall
have received notice. Each of the Offerors will use its best
efforts to prevent the issuance of any such stop order and to
secure the prompt removal thereof if issued.
(d) During such period of time as the Underwriters are
required by law to deliver a prospectus after this Underwriting
Agreement has become effective, if any event relating to or
affecting the Company or the Trust, or of which the Company or
the Trust shall be advised by the Representatives in writing,
shall occur which in the opinion of the Company should be set
forth in a supplement or amendment to the Prospectus in order to
make the Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser of the
Preferred Securities, the Company will amend or supplement the
Prospectus so that, as supplemented or amended, it will not
contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading. Unless such event
relates solely to the activities of the Underwriters (in which
case the Underwriters shall assume the expense of preparing any
such amendment or supplement), the expenses of complying with
this Section 6(d) shall be borne by the Company until the
expiration of nine months from the time of effectiveness of this
Underwriting Agreement, and such expenses shall be borne by the
Underwriters thereafter.
(e) The Company will, on behalf of the Trust, make
generally available to the Trust's security holders, as soon as
practicable, an earning statement (which need not be audited)
covering a period of at least twelve months beginning after the
"effective date of the registration statement" within the meaning
of Rule 158 under the Securities Act, which earning statement
shall be in such form, and be made generally available to
security holders in such a manner, as to meet the requirements of
the last paragraph of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act.
(f) At any time within six months of the date hereof, the
Offerors will furnish such proper information as may be lawfully
required, and will otherwise cooperate in qualifying the
Preferred Securities and the Debentures for offer and sale, under
the blue sky laws of such jurisdictions as the Representatives
may reasonably designate, provided that the Offerors shall not be
required to qualify as a foreign corporation or dealer in
securities, to file any consents to service of process under the
laws of any jurisdiction, or to meet any other requirements
deemed by the Offerors to be unduly burdensome.
(g) The Company will, except as herein provided, pay
all fees, expenses and taxes incident to the performance of each
Offeror's obligations under this Underwriting Agreement
including, but not limited to, (i) the preparation and filing of
the Registration Statement and any post-effective amendment
thereto, (ii) the printing, issuance and delivery of the
certificates for the Preferred Securities to the Underwriters,
(iii) legal counsel relating to the qualification of the
Preferred Securities and the Debentures under the blue sky laws
of various jurisdictions, in an amount not to exceed $6,000, (iv)
the printing and delivery to the Underwriters of reasonable
quantities of copies of the Registration Statement, the
preliminary (or any supplemental) blue sky survey, any
Preliminary Prospectus and the Prospectus and any amendment or
supplement thereto, except as otherwise provided in paragraph (d)
of this Section 6, (v) the rating of the Preferred Securities and
the Debentures by one or more nationally recognized statistical
rating agencies, (vi) filings or other notices (if any) with or
to, as the case may be, the National Association of Securities
Dealers, Inc. (the "NASD") in connection with its review of the
terms of the offering, and (vii) the listing of the Preferred
Securities and, if applicable, the Debentures on the New York
Stock Exchange (the "NYSE") and the registration thereof under
the Exchange Act in accordance with Section 6(i) hereof. Except
as provided above, the Company shall not be required to pay any
expenses of the Underwriters, except that, if this Underwriting
Agreement shall be terminated in accordance with the provisions
of Section 7, 8 or 12 hereof, the Company will reimburse the
Underwriters for (A) the reasonable fees and expenses of
Counsel for the Underwriters, whose fees and expenses the
Underwriters agree to pay in any other event, and (B) reasonable
out-of-pocket expenses incurred in contemplation of the
performance of this Underwriting Agreement. The Company shall
not in any event be liable to the Underwriters for damages on
account of loss of anticipated profits.
(h) Each of the Offerors will not offer, sell, contract to
sell or otherwise dispose of any Preferred Securities, any other
beneficial interests in the assets of the Trust, or any preferred
securities or any other securities of the Trust or the Company
that are substantially similar to the Preferred Securities,
including any guarantee of such securities, or any securities
convertible into or exchangeable for or that represent the right
to receive securities, preferred securities or any such
substantially similar securities of either the Trust or the
Company, except for the Trust Securities and the Guarantee,
without the consent of the Representatives until the earlier to
occur of (i) thirty (30) days after the Closing Date and (ii) the
date of the termination of the trading restrictions on the
Preferred Securities, as determined by the Underwriters. The
Representatives agree to notify the Offerors of such termination
if it occurs prior to the Closing Date.
(i) The Offerors will use their best efforts to cause the
Preferred Securities to be duly authorized for listing on the
NYSE, subject to notice of issuance, and to be registered under
the Exchange Act; if the Preferred Securities are exchanged for
Debentures, the Company will use its best efforts to have the
Debentures listed on the exchange or other organization on which
the Preferred Securities were then listed, and to have the
Debentures registered under the Exchange Act.
7. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase and pay for the Preferred
Securities shall be subject to the accuracy on the date hereof
and on the Closing Date of the representations and warranties
made herein on the part of the Offerors and of any certificates
furnished by the Offerors on the Closing Date and to the
following conditions:
(a) The Prospectus shall have been filed with, or
transmitted for filing to, the Commission pursuant to Rule 424(b)
prior to 5:30 P.M., New York time, on the second business day
following the date of this Underwriting Agreement, or such other
time and date as may be agreed upon by the Offerors and the
Representatives.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect at or prior to the
Closing Date; no proceedings for such purpose shall be pending
before, or, to the knowledge of the Offerors or the Underwriters,
threatened by, the Commission on the Closing Date; and the
Underwriters shall have received a certificate, dated the Closing
Date and signed by the President, a Vice President, the Treasurer
or an Assistant Treasurer of the Company and an authorized
representative of the Trust, to the effect that no such stop
order has been or is in effect and that no proceedings for such
purpose are pending before or, to the knowledge of the Company or
the Trust, as the case may be, threatened by the Commission.
(c) At the Closing Date, there shall have been issued and
there shall be in full force and effect an order of the
Commission under the Public Utility Holding Company Act of 1935,
as amended (the "1935 Act"), authorizing the issuance and sale of
the Securities.
(d) At the Closing Date, the Underwriters shall have
received from Laurence M. Hamric, Esq., General Attorney -
Corporate and Securities of Entergy Services, Inc., and Reid &
Priest LLP, opinions, dated the Closing Date, substantially in
the forms set forth in Exhibits A and B hereto, respectively,
(i) with such changes therein as may be agreed upon by the
Offerors and the Representatives, with the approval of Counsel
for the Underwriters, and (ii) if the Prospectus shall be
supplemented after being furnished to the Underwriters for use in
offering the Preferred Securities, with changes therein to
reflect such supplementation.
(e) At the Closing Date, the Underwriters shall have
received from Richards, Layton & Finger, P.A., special Delaware
counsel for the Company and the Trust, an opinion, dated the
Closing Date, substantially in the form set forth in Exhibit C
hereto (i) with such changes therein as may be agreed upon by the
Offerors and the Representatives, with the approval of Counsel
for the Underwriters, and (ii) if the Prospectus shall be
supplemented after being furnished to the Underwriters for use in
offering the Preferred Securities, with changes therein to
reflect such supplementation.
(f) At the Closing Date, the Underwriters shall have
received from Counsel for the Underwriters, an opinion, dated the
Closing Date, substantially in the form set forth in Exhibit D
hereto, with such changes therein as may be necessary to reflect
any supplementation of the Prospectus prior to the Closing Date.
(g) On or prior to the effective date of this Underwriting
Agreement, the Underwriters shall have received from Coopers &
Lybrand L.L.P., the Company's independent certified public
accountants (the "Accountants"), a letter dated the date hereof
and addressed to the Underwriters to the effect that (i) they are
independent certified public accountants with respect to the
Company within the meaning of the Securities Act and the
applicable published rules and regulations thereunder; (ii) in
their opinion, the financial statements and financial statement
schedules examined by them and included or incorporated by
reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the applicable published
rules and regulations thereunder; (iii) on the basis of
performing the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial
Information, on the latest unaudited financial statements, if
any, included or incorporated by reference in the Prospectus, a
reading of the latest available interim unaudited financial
statements of the Company, the minutes of the meetings of the
Board of Directors of the Company, the Executive Committee
thereof, if any, and the stockholder of the Company, since
December 31, 199_ to a specified date not more than five days
prior to the date of such letter, and inquiries of officers of
the Company who have responsibility for financial and accounting
matters (it being understood that the foregoing procedures do not
constitute an examination made in accordance with generally
accepted auditing standards and they would not necessarily reveal
matters of significance with respect to the comments made in such
letter and, accordingly, that the Accountants make no
representations as to the sufficiency of such procedures for the
purposes of the Underwriters), nothing has come to their
attention which caused them to believe that, to the extent
applicable, (A) the unaudited financial statements of the Company
(if any) included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the
related published rules and regulations thereunder; (B) any
material modifications should be made to said unaudited financial
statements for them to be in conformity with generally accepted
accounting principles; and (C) at a specified date not more than
five days prior to the date of the letter, there was any change
in the capital stock or long-term debt of the Company, or
decrease in its net assets, in each case as compared with amounts
shown in the most recent balance sheet incorporated by reference
in the Prospectus, except in all instances for changes or
decreases which the Prospectus discloses have occurred or may
occur, for declarations of dividends, for the repayment or
redemption of long-term debt, for the amortization of premium or
discount on long-term debt, for the redemption or purchase of
preferred stock for sinking fund purposes, for any increases in
long-term debt in respect of previously issued pollution control,
solid waste disposal or industrial development revenue bonds, or
for changes or decreases as set forth in such letter, identifying
the same and specifying the amount thereof; and (iv) stating that
they have compared specific dollar amounts, percentages of
revenues and earnings and other financial information pertaining
to the Company set forth in the Prospectus to the extent that
such amounts, numbers, percentages and information may be derived
from the general accounting records of the Company, and excluding
any questions requiring an interpretation by legal counsel, with
the results obtained from the application of specified readings,
inquiries and other appropriate procedures (which procedures do
not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter, and found
them to be in agreement.
(h) At the Closing Date, the Underwriters shall have
received a certificate, dated the Closing Date and signed by the
President, a Vice President, the Treasurer or an Assistant
Treasurer of the Company, to the effect that (i) the
representations and warranties of the Company contained herein
are true and correct, (ii) the Company has performed and complied
with all agreements and conditions in this Underwriting Agreement
to be performed or complied with by the Company at or prior to
the Closing Date and (iii) since the most recent date as of which
information is given in the Prospectus, as it may then be amended
or supplemented, there has not been any material adverse change
in the business, property or financial condition of the Company
and there has not been any material transaction entered into by
the Company, other than transactions in the ordinary course of
business, in each case other than as referred to in, or
contemplated by, the Prospectus, as it may then be amended or
supplemented.
(i) At the Closing Date, the Underwriters shall have
received a certificate, dated the Closing Date and signed by an
authorized representative of the Trust, to the effect that (i)
the representations and warranties of the Trust contained herein
are true and correct, (ii) the Trust has performed and complied
with all agreements and conditions in this Underwriting Agreement
to be performed or complied with by the Trust at or prior to the
Closing Date and (iii) since the most recent date as of which
information is given in the Prospectus, as it may then be amended
or supplemented, there has not been any material adverse change
in the business, property or financial condition of the Trust and
there has not been any material transaction entered into by the
Trust, other than transactions in the ordinary course of
business, in each case other than as referred to in, or
contemplated by, the Prospectus, as it may then be amended or
supplemented.
(j) At the Closing Date, the Underwriters shall have
received duly executed counterparts of the Trust Agreement, the
Guarantee Agreement, the Expense Agreement and the Indenture.
(k) At the Closing Date, the Underwriters shall have
received from the Accountants a letter, dated the Closing Date,
confirming, as of a date not more than five days prior to the
Closing Date, the statements contained in the letter delivered
pursuant to Section 7(g) hereof.
(l) Between the date hereof and the Closing Date, no event
shall have occurred with respect to or otherwise affecting the
Company or the Trust that, in the reasonable opinion of the
Representatives, materially impairs the investment quality of the
Preferred Securities.
(m) Between the date hereof and the Closing Date neither
Moody's Investors Service, Inc. nor Standard & Poor's shall have
lowered its rating of any of the Company's outstanding debt
securities in any respect.
(n) On or prior to the Closing Date, the Underwriters shall
have received from the Company evidence reasonably satisfactory
to Goldman, Sachs & Co. that Moody's Investors Service, Inc. and
Standard & Poor's have publicly assigned to the Preferred
Securities ratings of ___ and ___, respectively, which ratings
shall be in full force and effect on the Closing Date.
(o) On or prior to the Closing Date, (i) the Preferred
Securities shall have been duly listed, subject to notice of
issuance, on the NYSE and (ii) the Company's registration
statement on Form 8-A relating to the Preferred Securities shall
have become effective under the Exchange Act.
(p) All legal matters in connection with the issuance and
sale of the Preferred Securities shall be satisfactory in form
and substance to Counsel for the Underwriters.
(q) The Offerors will furnish the Underwriters with
additional conformed copies of such opinions, certificates,
letters and documents as may be reasonably requested.
If any of the conditions specified in this Section 7
shall not have been fulfilled, this Underwriting Agreement may be
terminated by the Underwriters upon notice thereof to the
Offerors. Any such termination shall be without liability of any
party to any other party, except as otherwise provided in
paragraph (g) of Section 6 and in Section 10.
8. Conditions of Obligations of the Offerors. The
obligations of the Offerors hereunder shall be subject to the
following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect at or prior to the
Closing Date, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the Closing
Date.
(b) At the Closing Date, there shall have been issued and
there shall be in full force and effect an order of the
Commission under the 1935 Act authorizing the issuance and sale
of the Securities.
In case any of the conditions specified in this Section
8 shall not have been fulfilled, this Underwriting Agreement may
be terminated by the Offerors upon notice thereof to the
Representatives. Any such termination shall be without liability
of any party to any other party, except as otherwise provided in
paragraph (g) of Section 6 and in Section 10.
9. Indemnification.
(a) The Offerors shall indemnify, defend and hold harmless
each Underwriter and each person who controls each Underwriter
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which each
Underwriter or any or all of them may become subject under the
Securities Act or any other statute or common law and shall
reimburse each Underwriter and any such controlling person for
any legal or other expenses (including to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection
with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar
as such losses, claims, damages, liabilities, expenses or actions
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, as amended or supplemented, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, or in the Prospectus, as each may be amended or
supplemented, or the omission or alleged omission to state
therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the indemnity
agreement contained in this paragraph shall not apply to any such
losses, claims, damages, liabilities, expenses or actions arising
out of, or based upon, any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if
such statement or omission was made in reliance upon and in
conformity with information furnished herein or in writing to the
Offerors by any Underwriter specifically for use in connection
with the preparation of the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or
supplement to any thereof or arising out of, or based upon,
statements in or omissions from the Form T-1s; and provided
further, that the indemnity agreement contained in this
subsection shall not inure to the benefit of any Underwriter or
to the benefit of any person controlling any Underwriter on
account of any such losses, claims, damages, liabilities,
expenses or actions arising from the sale of the Preferred
Securities to any person in respect of any Preliminary Prospectus
or the Prospectus as supplemented or amended, furnished by any
Underwriter to a person to whom any of the Preferred Securities
were sold (excluding in both cases, however, any document then
incorporated by reference therein), insofar as such indemnity
relates to any untrue or misleading statement or omission made in
any Preliminary Prospectus or the Prospectus but eliminated or
remedied prior to the consummation of such sale in the
Prospectus, or any amendment or supplement thereto furnished on a
timely basis by the Offerors to the Underwriters pursuant to
Section 6(d) hereof, respectively, unless a copy of the
Prospectus (in the case of such a statement or omission made in
any Preliminary Prospectus) or such amendment or supplement (in
the case of such a statement or omission made in the Prospectus)
(excluding, however, any document then incorporated by reference
in the Prospectus or such amendment or supplement) is furnished
by such Underwriter to such person (i) with or prior to the
written confirmation of the sale involved or (ii) as soon as
available after such written confirmation (if it is made
available to the Underwriters prior to settlement of such sale).
(b) The Company shall indemnify, defend and hold harmless
the Trust against any and all losses, claims, damages or
liabilities that may become due from the Trust under Section 9(a)
hereof.
(c) Each Underwriter shall indemnify, defend and hold
harmless the Offerors, its directors and officers and each person
who controls the foregoing within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under
the Securities Act or any other statute or common law and shall
reimburse each of them for any legal or other expenses
(including, to the extent hereinafter provided, reasonable
counsel fees) incurred by them in connection with investigating
any such losses, claims, damages or liabilities or in connection
with defending any action, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, as amended
or supplemented, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or upon
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus or in the
Prospectus, as each may be amended or supplemented, or the
omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
in each case, if, but only if, such statement or omission was
made in reliance upon and in conformity with information
furnished herein or in writing to the Offerors by any Underwriter
specifically for use in connection with the preparation of the
Registration Statement, any Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto.
(d) In case any action shall be brought, based upon the
Registration Statement, any Preliminary Prospectus or the
Prospectus (including amendments or supplements thereto), against
any party in respect of which indemnity may be sought pursuant to
any of the preceding paragraphs, such party (hereinafter called
the indemnified party) shall promptly notify the party or parties
against whom indemnity shall be sought hereunder (hereinafter
called the indemnifying party) in writing, and the indemnifying
party shall have the right to participate at its own expense in
the defense or, if it so elects, to assume (in conjunction with
any other indemnifying party) the defense thereof, including the
employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses. If the
indemnifying party shall elect not to assume the defense of any
such action, the indemnifying party shall reimburse the
indemnified party for the reasonable fees and expenses of any
counsel retained by such indemnified party. Such indemnified
party shall have the right to employ separate counsel in any such
action in which the defense has been assumed by the indemnifying
party and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel has been
specifically authorized by the indemnifying party or (ii) the
named parties to any such action (including any impleaded
parties) include each of such indemnified party and the
indemnifying party and such indemnified party shall have been
advised by such counsel that a conflict of interest between the
indemnifying party and such indemnified party may arise and for
this reason it is not desirable for the same counsel to represent
both the indemnifying party and the indemnified party (it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm
of attorneys for such indemnified party (plus any local counsel
retained by such indemnified party in its reasonable judgment).
The indemnified party shall be reimbursed for all such fees and
expenses as they are incurred. The indemnifying party shall not
be liable for any settlement of any such action effected without
its consent, but if any such action is settled with the consent
of the indemnifying party or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless the indemnified party from and
against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and
indemnity has or could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party and any person
controlling any indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(e) If the indemnification provided for under subsections
(a), (b), (c) or (d) in this Section 9 is unavailable to any
extent to an indemnified party in respect of any losses, claims,
damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Offerors and the
Underwriters from the offering of the Preferred Securities or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Offerors on the one
hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Offerors
on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total proceeds from the
offering (after deducting underwriting discounts and commissions
but before deducting expenses) to the Offerors bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Offerors on
the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by any of the
Underwriters and such parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission.
The Offerors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this
Section 9(e) were determined by pro rata allocation or by any
other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable to an indemnified party as
a result of the losses, claims, damages and liabilities referred
to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 9(e), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Preferred
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 9(e) are several in
proportion to their respective underwriting obligations and not
joint. The obligations of the Company under this Section 9 shall
be in addition to any liability which the Company may otherwise
have.
10.Survival of Certain Representations and Obligations. Any
other provision of this Underwriting Agreement to the contrary
notwithstanding, (a) the indemnity and contribution agreements
contained in Section 9 of, and the representations and warranties
and other agreements of the Offerors contained in, this
Underwriting Agreement shall remain operative and in full force
and effect regardless of (i) any investigation made by or on
behalf of any Underwriter or by or on behalf of the Offerors or
its directors or officers, or any of the other persons referred
to in Section 9 hereof and (ii) acceptance of and payment for the
Preferred Securities and (b) the indemnity and contribution
agreements contained in Section 9 shall remain operative and in
full force and effect regardless of any termination of this
Underwriting Agreement.
11. Default of Underwriters. If any Underwriter shall fail
or refuse (otherwise than for some reason sufficient to justify,
in accordance with the terms hereof, the cancellation or
termination of its obligations hereunder) to purchase and pay for
the Preferred Securities that it has agreed to purchase and pay
for hereunder, and the number of Preferred Securities that such
defaulting Underwriter agreed but failed or refused to purchase
is not more than one-tenth of the number of the Preferred
Securities, the other Underwriters shall be obligated to purchase
the Preferred Securities that such defaulting Underwriter agreed
but failed or refused to purchase; provided that in no event
shall the number of Preferred Securities that any Underwriter has
agreed to purchase pursuant to Schedule I hereof be increased
pursuant to this Section 11 by an amount in excess of one-ninth
of such number of Preferred Securities without written consent of
such Underwriter. If any Underwriter shall fail or refuse to
purchase Preferred Securities and the number of Preferred
Securities with respect to which such default occurs is more than
one-tenth of the number of the Preferred Securities, the Offerors
shall have the right (a) to require the non-defaulting
Underwriters to purchase and pay for the respective number of
Preferred Securities that it had severally agreed to purchase
hereunder, and, in addition, the number of Preferred Securities
that the defaulting Underwriter shall have so failed to purchase
up to an amount thereof equal to one-ninth of the respective
number of Preferred Securities that such non-defaulting
Underwriters have otherwise agreed to purchase hereunder, and/or
(b) to procure one or more others, members of the NASD (or, if
not members of the NASD, who are foreign banks, dealers or
institutions not registered under the Exchange Act and who agree
in making sales to comply with the NASD's Rules of Fair
Practice), to purchase, upon the terms herein set forth, the
number of Preferred Securities that such defaulting Underwriter
had agreed to purchase, or that portion thereof that the
remaining Underwriters shall not be obligated to purchase
pursuant to the foregoing clause (a). In the event the Offerors
shall exercise its rights under clause (a) and/or (b) above, the
Offerors shall give written notice thereof to the Representatives
within 24 hours (excluding any Saturday, Sunday, or legal
holiday) of the time when the Offerors learn of the failure or
refusal of any Underwriter to purchase and pay for its respective
number of Preferred Securities, and thereupon the Closing Date
shall be postponed for such period, not exceeding three business
days, as the Offerors shall determine. In the event the Offerors
shall be entitled to but shall not elect (within the time period
specified above) to exercise its rights under clause (a) and/or
(b), the Offerors shall be deemed to have elected to terminate
this Underwriting Agreement. In the absence of such election by
the Offerors, this Underwriting Agreement will, unless otherwise
agreed by the Offerors and the non-defaulting Underwriters,
terminate without liability on the part of any non-defaulting
party except as otherwise provided in paragraph (g) of Section 6
and in Section 10. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect
of its default under this Underwriting Agreement.
12. Termination. This Underwriting Agreement shall be
subject to termination by notice given by written notice from the
Representatives to the Offerors if (a) after the execution and
delivery of this Underwriting Agreement and prior to the Closing
Date (i) trading of the Preferred Securities or trading in
securities generally shall have been suspended or materially
limited on the NYSE by The New York Stock Exchange, Inc., the
Commission or other governmental authority, (ii) minimum or
maximum ranges for prices shall have been generally established
on the NYSE by The New York Stock Exchange, Inc., the Commission
or other governmental authority, (iii) a general moratorium on
commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv)
there shall have occurred any outbreak or escalation of
hostilities or any calamity or crisis that, in the judgment of
the Representatives, is material and adverse and (b) in the case
of any of the events specified in clauses (a)(i) through (iv),
such event singly or together with any other such event makes it,
in the reasonable judgment of the Representatives, impracticable
to market the Preferred Securities. This Underwriting Agreement
shall also be subject to termination, upon notice by the
Representatives as provided above, if, in the judgment of the
Representatives, the subject matter of any amendment or
supplement (prepared by the Offerors) to the Prospectus (except
for information relating solely to the manner of public offering
of the Preferred Securities or to the activity of the
Underwriters or to the terms of any series of securities of the
Offerors other than the Preferred Securities) filed or issued
after the effectiveness of this Underwriting Agreement by the
Offerors shall have materially impaired the marketability of the
Preferred Securities. Any termination hereof, pursuant to this
Section 12, shall be without liability of any party to any other
party, except as otherwise provided in paragraph (g) of Section 6
and in Section 10.
13. Miscellaneous. THE RIGHTS AND DUTIES OF THE PARTIES TO
THIS UNDERWRITING AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. This Underwriting Agreement shall become
effective when a fully executed copy thereof is delivered to the
Offerors and to the Representatives. This Underwriting Agreement
may be executed in any number of separate counterparts, each of
which, when so executed and delivered, shall be deemed to be an
original and all of which, taken together, shall constitute but
one and the same agreement. This Underwriting Agreement shall
inure to the benefit of each of the Offerors, the Underwriters
and, with respect to the provisions of Section 9, each director,
officer and other person referred to in Section 9, and their
respective successors. Should any part of this Underwriting
Agreement for any reason be declared invalid, such declaration
shall not affect the validity of any remaining portion, which
remaining portion shall remain in full force and effect as if
this Underwriting Agreement had been executed with the invalid
portion thereof eliminated. Nothing herein is intended or shall
be construed to give to any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of
any provision in this Underwriting Agreement. The term
"successor" as used in this Underwriting Agreement shall not
include any purchaser, as such purchaser, of any Preferred
Securities from the Underwriters.
14. Notices. All communications hereunder shall be in writing
and, if to the Underwriters, shall be mailed or delivered to
Goldman, Sachs & Co. at the address set forth at the beginning of
this Underwriting Agreement (to the attention of its General
Counsel) or, if to the Offerors, shall be mailed or delivered to
it at 350 Pine Street, Beaumont, Texas 77701, Attention:
Treasurer, or, if to Entergy Services, Inc., shall be mailed or
delivered to it at 639 Loyola Avenue, New Orleans, Louisiana
70113, Attention: Treasurer.
If the foregoing is in accordance with your
understanding, please sign and return to us counterparts of this
Underwriting Agreement, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this Underwriting Agreement
and such acceptance hereof, shall constitute a binding agreement
among each of the Underwriters, the Company and the Trust. It is
understood that your acceptance of this Underwriting Agreement on
behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Trust
for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
Entergy Gulf States, Inc.
By:
Name:
Title:
Entergy Gulf States Capital I
By: Entergy Gulf States, Inc.,
as Depositor
By:
Name:
Title:
Accepted as of the date first above written:
Goldman, Sachs & Co.
[Other Managers]
As representatives of the other several
Underwriters named in Schedule I hereto
By:
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE I
Entergy Gulf States Capital I
__% Cumulative Quarterly Income Preferred Securities, Series A
Number of
Underwriter Preferred
Securities
Goldman, Sachs & Co.
_________
Total
<PAGE>
EXHIBIT A
[Letterhead of Laurence M. Hamric, Esq.]
_________ __,1997
Goldman, Sachs & Co.
[Other Managers]
As representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred
to below (the "Underwriters")
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
I, together with Reid & Priest LLP, of New York, New
York, and Richards, Layton & Finger, P.A., Wilmington, Delaware,
have acted as counsel for Entergy Gulf States, Inc., a Texas
corporation (the "Company"), and Entergy Gulf States Capital I, a
statutory business trust organized under the laws of the State of
Delaware (the "Trust"), in connection with the issuance and sale
by the Trust to the several Underwriters pursuant to the
Underwriting Agreement, effective _________ __, 1997 (the
"Underwriting Agreement"), among the Company, the Trust and you,
as the representatives of the several Underwriters, of
___________ __% Cumulative Quarterly Income Preferred Securities,
Series A (liquidation preference $25 per preferred security) (the
"Preferred Securities"), guaranteed to the extent the Trust has
funds by the Company. This opinion is rendered to you at the
request of the Company and the Trust. Capitalized terms used
herein and not otherwise defined have the meanings ascribed to
such terms in the Underwriting Agreement.
In my capacity as such counsel, I have either
participated in the preparation of or have examined and are
familiar with: (a) the Company's Restated Articles of
Incorporation and Bylaws, each as amended; (b) the Underwriting
Agreement; (c) the Indenture; (d) the Trust Agreement; (e) the
Guarantee Agreement; (f) the Expense Agreement; (g) the
Registration Statement and Prospectus filed under the Securities
Act; (h) the records of various corporate proceedings relating to
the authorization, issuance and sale of the Company Securities
and the execution and delivery by the Company of the Indenture,
the Underwriting Agreement, the Trust Agreement, the Expense
Agreement and the Guarantee Agreement; and (i) the proceedings
before and the order entered by the Commission under the 1935 Act
relating to the issuance and sale of the Securities. I have also
examined or caused to be examined such other documents and have
satisfied myself as to such other matters as I have deemed
necessary in order to render this opinion. In such examination,
I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, and
the conformity to the originals of the documents submitted to me
as certified or photostatic copies. I have not examined the
Debentures, except a specimen thereof, and I have relied upon a
certificate of the Debenture Trustee as to the authentication and
delivery thereof.
In my examination, I have assumed the genuineness of
all signatures, the authenticity of all documents submitted to me
as originals, the legal capacity of natural persons and the
conformity with the originals of all documents submitted to me as
copies. In making my examination of documents and instruments
executed or to be executed by persons other than the Company and
the Trust, I have assumed that each such other person had the
requisite power and authority to enter into and perform fully its
obligations thereunder, the due authorization by each such other
person for the execution, delivery and performance thereof by
such person, and the due execution and delivery by or on behalf
of such person of each such document and instrument. In the case
of any such other person that is not a natural person, I have
also assumed, insofar as it is relevant to the opinions set forth
below, that each such other person is duly organized, validly
existing and in good standing under the laws of the jurisdiction
in which such other person was created, and is duly qualified and
in good standing in each other jurisdiction where the failure to
be so qualified could reasonably be expected to have a material
effect upon the ability of such other person to execute, deliver
and/or perform such other person's obligations under any such
document or instrument. I have further assumed that each
document, instrument, agreement, record and certificate reviewed
by me for purposes of rendering the opinions expressed below has
not been amended by oral agreement, conduct or course of dealing
of the parties thereto, although I have no knowledge of any facts
or circumstances that could give rise to such amendment.
As to questions of fact material to the opinions
expressed herein, I have relied upon certificates and
representations of officers of the Company and the Trust
(including but not limited to those contained in the Underwriting
Agreement, the Indenture, the Trust Agreement, the Expense
Agreement and the Guarantee Agreement and certificates delivered
at the closing of the sale of the Preferred Securities) and
appropriate public officials without independent verification of
such matters except as otherwise described herein.
Whenever my opinions herein with respect to the
existence or absence of facts are stated to be to my knowledge or
awareness, I intend to signify that no information has come to my
attention or the attention of any other attorneys acting for or
on behalf of the Company or the Trust or any of its affiliates
that have participated in the negotiation of the transactions
contemplated by the Underwriting Agreement, the Indenture, the
Trust Agreement, the Expense Agreement and the Guarantee
Agreement, in the preparation of the Registration Statement and
the Prospectus or in the preparation of this opinion letter that
would give me, or them, actual knowledge that would contradict
such opinions. However, except to the extent necessary in order
to give the opinions hereinafter expressed, neither I nor they
have undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to
knowledge of the existence or absence of such facts (except to
the extent necessary in order to give the opinions hereinafter
expressed) should be assumed.
Subject to the foregoing and to the further exceptions
and qualifications set forth below, I am of the opinion that:
(1) The Company is duly organized and validly existing as a
corporation in good standing under the laws of the State of
Texas, has due corporate power and authority to conduct the
business that it is described as conducting in the Prospectus, to
own and operate the properties owned and operated by it in such
business, to issue the Company Securities, to enter into and
perform its obligations under the Underwriting Agreement, the
Trust Agreement, the Indenture, the Expense Agreement, the
Guarantee Agreement and the Company Securities, to purchase, own,
and hold the Common Securities issued by the Trust and to
consummate the transactions therein contemplated, and is duly
qualified to conduct such business in the States of Texas and
Louisiana.
(2) The statements made in the Prospectus under the
captions "Risk Factors and Issues Facing the Company", "Entergy
Gulf States Capital I", "Description of Preferred Securities",
"Description of Guarantee", "Description of the Junior
Subordinated Debentures" and "Relationship Among the Preferred
Securities, the Junior Subordinated Debentures and the Guarantee"
insofar as they purport to constitute summaries of the documents
referred to therein, constitute accurate summaries of the terms
of such documents in all material respects.
(3) The Debentures have been duly and validly authorized by
all necessary corporate action on the part of the Company, and
are legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law), and are entitled to the benefits provided by the Indenture.
(4) The Indenture has been duly and validly authorized by
all necessary corporate action on the part of the Company, has
been duly and validly executed and delivered by the Company, is a
legal, valid and binding instrument of the Company enforceable
against the Company in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting
creditors' rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding in equity
or at law), and is duly qualified under the Trust Indenture Act,
and no proceedings to suspend such qualification have been
instituted or, to my knowledge, threatened by the Commission.
(5) The Guarantee Agreement has been duly and validly
authorized by all necessary corporate action on the part of the
Company, has been duly and validly executed and delivered by the
Company, is a legal, valid and binding instrument of the Company
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law), and is duly qualified under the
Trust Indenture Act, and no proceedings to suspend such
qualification have been instituted or, to my knowledge,
threatened by the Commission.
(6) The Expense Agreement has been duly and validly
authorized by all necessary corporate action on the part of the
Company, has been duly and validly executed and delivered by the
Company and is a legal, valid and binding instrument of the
Company enforceable against the Company in accordance with its
terms, except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
(7) The Trust Agreement has been duly authorized, executed
and delivered by the Company; the Underwriting Agreement has been
duly authorized, executed and delivered by the Company on behalf
of itself and as depositor under the Trust Agreement; and the
Preferred Securities have been duly executed and delivered by an
Administrative Trustee.
(8) The Trust Agreement is duly qualified under the Trust
Indenture Act, and no proceedings to suspend such qualification
have been instituted or, to my knowledge, threatened by the
Commission.
(9) The issuance and sale by the Company of the Company
Securities and the execution, delivery and performance by the
Company of the Indenture, the Underwriting Agreement, the Trust
Agreement, the Expense Agreement and the Guarantee Agreement (a)
will not violate any provision of the Company's Restated Articles
of Incorporation or Bylaws, each as amended, (b) will not violate
any provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance on
or security interest in any of the assets of the Company pursuant
to the provisions of, any mortgage, indenture, contract,
agreement or other undertaking known to me (having made due
inquiry with respect thereto) to which the Company is a party or
which purports to be binding upon the Company or upon any of its
assets, and (c) will not violate any provision of any law or
regulation applicable to the Company or, to the best of my
knowledge (having made due inquiry with respect thereto), any
provision of any order, writ, judgment or decree of any
governmental instrumentality applicable to the Company (except
that various consents of, and filings with, governmental
authorities may be required to be obtained or made, as the case
may be, in connection or compliance with the provisions of the
securities or blue-sky laws of any jurisdiction).
(10) Except in each case as to the financial statements and
other financial data included or incorporated by reference
therein, upon which we do not pass, the Registration Statement,
at the time it became effective, and the Prospectus, as of its
date, complied as to form in all material respects with the
applicable requirements of the Securities Act and (except with
respect to the Form T-1s, upon which we do not pass) the Trust
Indenture Act, and the applicable instructions, rules and
regulations of the Commission thereunder or pursuant to said
instructions, rules and regulations are deemed to comply
therewith; with respect to the documents or portions thereof
filed with the Commission pursuant to the Exchange Act, and
incorporated by reference in the Prospectus pursuant to Item 12
of Form S-2, such documents or portions thereof, on the date they
were filed with the Commission, complied as to form in all
material respects with the applicable provisions of the Exchange
Act and the applicable instructions, rules and regulations of the
Commission thereunder or pursuant to said instructions, rules and
regulations are deemed to comply therewith; and the Registration
Statement has become, and on the date hereof is, effective under
the Securities Act, and, to the best of my knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose are pending
or threatened under Section 8(d) of the Securities Act.
(11) An appropriate order has been entered by the
Commission under the 1935 Act authorizing the issuance and sale
of the Securities; to the best of my knowledge, said order is in
full force and effect; no further approval, authorization,
consent or other order of any governmental body (other than
orders of the Commission under the Securities Act, the Exchange
Act and the Trust Indenture Act, which have been duly obtained,
or in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction) is legally
required to permit the issuance and sale of the Securities; and
no further approval, authorization, consent or other order of any
governmental body is legally required to permit the performance
by the Trust of its obligations with respect to the Preferred
Securities, or by the Company of its obligations with respect to
the Company Securities or under the Indenture, the Underwriting
Agreement, the Trust Agreement, the Expense Agreement or the
Guarantee Agreement.
(12) All of the issued and outstanding Common Securities of
the Trust are owned of record by the Company.
In connection with the preparation by the Company and
the Trust of the Registration Statement and the Prospectus, I
have had discussions with certain of the officers and
representatives of the Company and the Trust, with other counsel
for the Company and the Trust, and with the independent certified
public accountants of the Company who examined certain of the
financial statements included or incorporated by reference in the
Registration Statement. My examination of the Registration
Statement and the Prospectus and such discussions did not
disclose to me any information which gives me reason to believe
that (i) the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that
the Prospectus, as of its date and at the date hereof, contained
or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, and (ii) the documents
incorporated by reference in the Prospectus pursuant to Item 12
of Form S-2, on the date filed with the Commission pursuant to
the Exchange Act, contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. I do not express any
opinion or belief as to the financial statements or other
financial data included or incorporated by reference in the
Registration Statement or the Prospectus, as to the Form T-1s or
as to the information contained in the Prospectus under the
caption "Certain United States Federal Income Tax
Considerations."
I have examined the opinions of even date herewith
rendered to you by Reid & Priest LLP and Winthrop, Stimson,
Putnam & Roberts, and concur in the conclusions expressed therein
insofar as they involve questions of Texas and Louisiana law.
I am a member of the Texas Bar and the Louisiana Bar
and do not hold myself out as an expert on the laws of any other
state. As to all matters of New York law, I have relied, with
your approval, upon the opinion of even date herewith addressed
to you by Reid & Priest LLP of New York, New York, and, as to all
matters of Delaware law, I have relied, with your approval, upon
the opinion of even date herewith addressed to you by Richards,
Layton & Finger, P.A., of Wilmington, Delaware.
The opinion set forth above is solely for the benefit
of the addressees of this letter in connection with the
Underwriting Agreement and the transactions contemplated
thereunder and it may not be relied upon in any manner by any
other person or for any other purpose, without my prior written
consent, except that Reid & Priest LLP and Winthrop, Stimson,
Putnam & Roberts may rely on this opinion as to all matters of
Texas and Louisiana law in rendering their opinions required to
be delivered under the Underwriting Agreement.
Very truly yours,
<PAGE>
EXHIBIT B
[Letterhead of Reid & Priest LLP]
________ __, 1997
Goldman, Sachs & Co.
[Other Managers]
As representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred
to below (the "Underwriters")
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We, together with Laurence M. Hamric, Esq., General
Attorney - Corporate and Securities of Entergy Services, Inc.,
and Richards, Layton & Finger, P.A., Wilmington, Delaware, have
acted as counsel for Entergy Gulf States Inc., a Texas
corporation (the "Company"), and Entergy Gulf States Capital I, a
statutory business trust organized under the laws of the State of
Delaware (the "Trust"), in connection with the issuance and sale
by the Trust to the several Underwriters pursuant to the
Underwriting Agreement, effective ______ __, 1997 (the
"Underwriting Agreement"), among the Company, the Trust and you,
as the representatives of the several Underwriters, of __________
__% Cumulative Quarterly Income Preferred Securities, Series A
(liquidation preference $25 per preferred security) (the
"Preferred Securities"), guaranteed to the extent the Trust has
funds by the Company. This opinion is rendered to you at the
request of the Company and the Trust. Capitalized terms used
herein and not otherwise defined have the meanings ascribed to
such terms in the Underwriting Agreement.
In our capacity as such counsel, we have either
participated in the preparation of or have examined and are
familiar with: (a) the Company's Restated Articles of
Incorporation and Bylaws, each as amended; (b) the Underwriting
Agreement; (c) the Indenture; (d) the Trust Agreement; (e) the
Guarantee Agreement; (f) the Expense Agreement; (g) the
Registration Statement and Prospectus filed under the Securities
Act; (h) the records of various corporate proceedings relating to
the authorization, issuance and sale of the Company Securities
and the execution and delivery by the Company of the Indenture,
the Underwriting Agreement, the Trust Agreement, the Expense
Agreement and the Guarantee Agreement; and (i) the proceedings
before and the order entered by the Commission under the 1935 Act
relating to the issuance and sale of the Securities. We have
also examined or caused to be examined such other documents and
have satisfied ourselves as to such other matters as we have
deemed necessary in order to render this opinion. In such
examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals,
and the conformity to the originals of the documents submitted to
us as certified or photostatic copies. We have not examined the
Debentures, except a specimen thereof, and we have relied upon a
certificate of the Debenture Trustee as to the authentication and
delivery thereof.
Subject to the foregoing and to the further exceptions
and qualifications set forth below, we are of the opinion that:
(13) The Indenture has been duly and validly authorized by
all necessary corporate action on the part of the Company, has
been duly and validly executed and delivered by the Company, is a
legal, valid and binding instrument of the Company enforceable
against the Company in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting
creditors' rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding in equity
or at law), and is duly qualified under the Trust Indenture Act,
and no proceedings to suspend such qualification have been
instituted or, to our knowledge, threatened by the Commission.
(14) The Debentures have been duly and validly authorized by
all necessary corporate action on the part of the Company, and
are legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law), and are entitled to the benefits provided by the Indenture.
(15) The Guarantee Agreement has been duly and validly
authorized by all necessary corporate action on the part of the
Company, has been duly and validly executed and delivered by the
Company, is a legal, valid and binding instrument of the Company
enforceable against the Company in accordance with its terms,
except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law), and is duly qualified under the
Trust Indenture Act, and no proceedings to suspend such
qualification have been instituted or, to our knowledge,
threatened by the Commission.
(16) The Expense Agreement has been duly and validly
authorized by all necessary corporate action on the part of the
Company, has been duly and validly executed and delivered by the
Company and is a legal, valid and binding instrument of the
Company enforceable against the Company in accordance with its
terms, except as limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other similar laws
affecting creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
(17) The Trust Agreement is duly qualified under the Trust
Indenture Act, and no proceedings to suspend such qualification
have been instituted or, to our knowledge, threatened by the
Commission.
(18) The statements made in the Prospectus under the
captions "Risk Factors and Issues Facing the Company", "Entergy
Gulf States Capital I", "Description of Preferred Securities",
"Description of Guarantee", "Description of the Junior
Subordinated Debentures" and "Relationship Among the Preferred
Securities, the Junior Subordinated Debentures and the Guarantee"
insofar as they purport to constitute summaries of the documents
referred to therein, constitute accurate summaries of the terms
of such documents in all material respects.
(19) The statements made in the Prospectus under the caption
"Certain United States Federal Income Tax Considerations"
constitute a fair and accurate summary of the matters addressed
therein, based upon current law and the assumptions stated or
referred to therein.
(20) The Trust is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(21) Except in each case as to the financial statements and
other financial data included or incorporated by reference
therein, upon which we do not pass, the Registration Statement,
at the time it became effective, and the Prospectus, as of its
date, complied as to form in all material respects with the
applicable requirements of the Securities Act and (except with
respect to the Form T-1s, upon which we do not pass) the Trust
Indenture Act, and the applicable instructions, rules and
regulations of the Commission thereunder or pursuant to said
instructions, rules and regulations are deemed to comply
therewith; with respect to the documents or portions thereof
filed with the Commission pursuant to the Exchange Act, and
incorporated by reference in the Prospectus pursuant to Item 12
of Form S-2, such documents or portions thereof, on the date they
were filed with the Commission, complied as to form in all
material respects with the applicable provisions of the Exchange
Act and the applicable instructions, rules and regulations of the
Commission thereunder or pursuant to said instructions, rules and
regulations are deemed to comply therewith; and the Registration
Statement has become, and on the date hereof is, effective under
the Securities Act and, to the best of our knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose are pending
or threatened under Section 8(d) of the Securities Act.
(22) An appropriate order has been entered by the Commission
under the 1935 Act authorizing the issuance and sale of the
Securities; to the best of our knowledge, said order is in full
force and effect; no further approval, authorization, consent or
other order of any governmental body (other than orders of the
Commission under the Securities Act, the Exchange Act and the
Trust Indenture Act, which have been duly obtained, or in
connection or compliance with the provisions of the securities or
blue sky laws of any jurisdiction) is legally required to permit
the issuance and sale of the Securities; and no further approval,
authorization, consent or other order of any governmental body is
legally required to permit the performance by the Trust of its
obligations with respect to the Preferred Securities, or by the
Company of its obligations with respect to the Company Securities
or under the Indenture, the Underwriting Agreement, the Trust
Agreement, the Expense Agreement or the Guarantee Agreement.
In passing upon the forms of the Registration Statement
and the Prospectus, we necessarily assume the correctness,
completeness and fairness of the statements made by the Company
and the Trust and information included or incorporated by
reference in the Registration Statement and the Prospectus and
take no responsibility therefor, except insofar as such
statements relate to us and as set forth in paragraphs (6) and
(7) above. In connection with the preparation by the Company and
the Trust of the Registration Statement and the Prospectus, we
have had discussions with certain officers and representatives of
the Company and the Trust, with other counsel for the Company and
the Trust, and with the independent certified public accountants
of the Company who examined certain of the financial statements
included or incorporated by reference in the Registration
Statement. Our examination of the Registration Statement and the
Prospectus and such discussions did not disclose to us any
information which gives us reason to believe that the
Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectus, as of its date and at the date hereof, contained or
contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. We do not express any opinion or
belief as to the financial statements or other financial data
included or incorporated by reference in the Registration
Statement or the Prospectus or as to the Form T-1s.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of any other state. As to
all matters of Texas and Louisiana law, we have, with your
consent, relied upon the opinion of even date herewith of
Laurence M. Hamric, Esq., General Attorney - Corporate and
Securities of Entergy Services, Inc., and, as to all matters of
Delaware law, we have, with your consent, relied upon the opinion
of even date herewith of Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel for the Offerors.
We have not examined into and are not passing upon matters
relating to the incorporation of the Company.
The opinion set forth above is solely for the benefit
of the addressees of this letter in connection with the
Underwriting Agreement and the transactions contemplated
thereunder and it may not be relied upon in any manner by any
other person or for any other purpose, without our prior written
consent, except that Laurence M. Hamric, Esq., General Attorney -
Corporate and Securities of Entergy Services, Inc., may rely on
this opinion as to all matters of New York law in rendering their
opinion required to be delivered under the Underwriting
Agreement.
Very truly yours,
REID & PRIEST LLP
<PAGE>
EXHIBIT C
[Letterhead of Richards, Layton & Finger, P.A.]
________ __, 1997
Goldman, Sachs & Co.
[Other Managers]
As representatives of the several
Underwriters named in Schedule I
to the Underwriting Agreement
referred to below
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as special Delaware counsel for Entergy
Gulf States Inc., a Texas corporation (the "Company"), and
Entergy Gulf States Capital I, a Delaware business trust (the
"Trust"), in connection with the matters set forth herein. At
your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(b) The Certificate of Trust of the Trust, dated as of
December __, 1996 (the "Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary
of State") on December __, 1996;
(c)
(c) The Trust Agreement of the Trust, dated as of December
__, 1996 among the Company, as depositor, and the trustees of the
Trust named therein;
(d) The Amended and Restated Trust Agreement of the Trust,
dated as of _______ __, 1997 (including Exhibits A, B and D
thereto) (the "Trust Agreement"), among the Company, as
depositor, The Bank of New York, as property trustee, The Bank of
New York (Delaware), as Delaware trustee, William J. Regan, Jr.,
Steven C. McNeal and Frank Williford IV (each, an "Administrative
Trustee" and collectively, the "Administrative Trustees") and the
holders, from time to time, of undivided beneficial interests in
the assets of the Trust;
(e) The Underwriting Agreement, dated ______ __, 1997 (the
"Underwriting Agreement"), among the Trust, the Company and you,
as Representatives of the several underwriters named in Schedule
I to the Underwriting Agreement;
(f) The Prospectus, dated _______ __, 1997 (the
"Prospectus"), relating to ___________ __% Cumulative Quarterly
Income Preferred Securities, Series A, of the Trust representing
preferred undivided beneficial interests in the assets of the
Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"); and
(g) A Certificate of Good Standing for the Trust, dated
_______ __, 1997, obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (f) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (f) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein.
We have conducted no independent factual investigation of our
own, but rather have relied solely upon the foregoing documents,
the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us as
authentic originals, (ii) the conformity with the originals of
all documents submitted to us as copies or forms, and (iii) the
genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that
the Trust Agreement constitutes the entire agreement among the
parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and termination
of the Trust, and that the Trust Agreement and the Certificate
are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph (1) below, the due
creation, due organization or due formation, as the case may be,
and valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the
legal capacity of each natural person who is a party to the
documents examined by us, (iv) except to the extent provided in
paragraph (2) below, that each of the parties to the documents
examined by us has the power and authority to execute and
deliver, and to perform its obligations under, such documents,
(v) except to the extent provided in paragraph (9) below, that
each of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the
receipt by each Person to whom a Preferred Security is to be
issued by the Trust (the "Preferred Security Holders") of a
Preferred Securities Certificate for the Preferred Security and
the payment for the Preferred Security acquired by it, in
accordance with the Trust Agreement, and as described in the
Prospectus and the Prospectus Supplement, (vii) that the
Preferred Securities are issued and sold to the Preferred
Security Holders in accordance with the Trust Agreement, and as
described in the Prospectus, (viii) the receipt by the Person
(the "Common Security Holder") to whom a __% Common Security of
the Trust representing common undivided beneficial interests in
the assets of the Trust (each, a "Common Security" and
collectively, the "Common Securities") (the Preferred Securities
and the Common Securities being hereinafter collectively referred
to as the "Trust Securities") is to be issued by the Trust of a
Common Securities Certificate for the Common Security and the
payment for the Common Security acquired by it, in accordance
with the Trust Agreement, and as described in the Prospectus, and
(ix) that the Common Securities are issued and sold to the Common
Security Holder in accordance with the Trust Agreement, and as
described in the Prospectus. We have not participated in the
preparation of the Prospectus and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as we
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
(1) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business
Trust Act, and all filings required under the Delaware Business
Trust Act with respect to the creation and valid existence of the
Trust as a business trust have been made.
(2) Under the Trust Agreement and the Delaware Business
Trust Act, the Trust has the trust power and authority (i) to own
property and conduct its business, all as described in the
Prospectus, (ii) to issue and sell the Trust Securities in
accordance with the Trust Agreement, and as described in the
Prospectus, and to perform its other obligations under the Trust
Agreement, the Underwriting Agreement and the Trust Securities,
(iii) to execute and deliver the Underwriting Agreement, and (iv)
to consummate the transactions contemplated by the Underwriting
Agreement.
(3) The Trust Agreement constitutes a valid and binding
obligation of the Company and the Administrative Trustees, and is
enforceable against the Company and the Administrative Trustees,
in accordance with its terms.
(4) The Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued undivided
beneficial interests in the assets of the Trust.
(5) The Preferred Securities have been duly authorized by
the Trust Agreement and are duly and validly issued and, subject
to the qualifications set forth in paragraph (6) below, fully
paid and nonassessable undivided beneficial interests in the
assets of the Trust.
(6) The Preferred Security Holders, as beneficial owners of
the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State
of Delaware. We note that the Preferred Security Holders may be
obligated, pursuant to the Trust Agreement, (i) to provide
indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of
Preferred Securities Certificates and the issuance of replacement
Preferred Securities Certificates, and (ii) to provide security
or indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and powers under the
Trust Agreement.
(7) Under the Trust Agreement and the Delaware Business
Trust Act, the issuance of the Trust Securities is not subject to
preemptive rights.
(8) The issuance and sale by the Trust of the Trust
Securities and the execution, delivery and performance by the
Trust of the Underwriting Agreement and the consummation of the
transactions contemplated by the Underwriting Agreement do not
violate (a) the Certificate or the Trust Agreement or (b) any
applicable Delaware law, rule or regulation.
(9) Under the Trust Agreement and the Delaware Business
Trust Act, (i) the issuance and sale by the Trust of the Trust
Securities and the execution and delivery by the Trust of the
Underwriting Agreement, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all
necessary trust action on the part of the Trust and (ii) assuming
the due authorization, execution and delivery of the Underwriting
Agreement by the Company as depositor under the Trust Agreement
on behalf of the Trust and of the Preferred Securities
Certificates for the Preferred Securities by an Administrative
Trustee on behalf of the Trust, the Underwriting Agreement and
the Preferred Securities Certificates have been duly executed and
delivered by the Trust.
The opinion expressed in paragraph (3) above is
subject, as to enforcement, to the effect upon the Trust
Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent transfer
and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties (regardless
of whether considered and applied in a proceeding in equity or at
law) and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution.
We consent to your relying as to matters of Delaware
law upon this opinion in connection with the Underwriting
Agreement. We also consent to the reliance upon this opinion as
to matters of Delaware law by Laurence M. Hamric, Esq., General
Attorney - Corporate and Securities of Entergy Services, Inc.,
Reid & Priest LLP, and Winthrop, Stimson, Putnam & Roberts, as if
it were addressed to each of them, in rendering their opinions to
you of even date herewith. Except as stated above, without our
prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER, P.A.
<PAGE>
EXHIBIT D
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
__________ __, 1997
Goldman, Sachs & Co.
[Other Managers]
As representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred
to below (the "Underwriters")
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as counsel for the several Underwriters
of ___________ __% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per preferred
security) (the "Preferred Securities"), issued by Entergy Gulf
States Capital I, a statutory business trust organized under the
laws of the State of Delaware (the "Trust"), pursuant to the
agreement among you, as the representatives of the several
Underwriters, Entergy Gulf States, Inc., a Texas corporation (the
"Company"), and the Trust effective ______ __, 1997 (the
"Underwriting Agreement").
We are members of the New York Bar and, for purposes of
this opinion, do not hold ourselves out as experts on the laws of
any jurisdiction other than the State of New York and the United
States of America. We have, with your consent, relied upon (i)
an opinion of even date herewith addressed to you of Laurence M.
Hamric, Esq., General Attorney - Corporate and Securities of
Entergy Services, Inc., and the Trust, as to the matters covered
in such opinion relating to Texas and Louisiana law and (ii) an
opinion of even date herewith addressed to you of Richards,
Layton & Finger, P.A., special Delaware counsel for the Company
and the Trust, as to the matters covered in such opinion relating
to Delaware law. We have reviewed said opinions and believe that
they are satisfactory. We have also reviewed the opinion of Reid
& Priest LLP required by Section 7(d) of the Underwriting
Agreement, and we believe said opinion to be satisfactory.
We have also reviewed such documents and satisfied
ourselves as to such other matters as we have deemed necessary in
order to enable us to express this opinion. As to various
questions of fact material to this opinion, we have relied upon
representations of the Company and the Trust and statements in
the Registration Statement. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to the
originals of the documents submitted to us as certified or
photostatic copies, and the correctness of all statements of fact
contained in all such original or copied documents. We have not
examined the certificates representing the Preferred Securities
or the Debentures except in each case for specimens thereof, and
we have relied upon a certificate of an Administrative Trustee as
to the execution and delivery of the Preferred Securities and a
certificate of the Debenture Trustee as to the authentication and
delivery of the Debentures. Capitalized terms used herein and
not otherwise defined have the meanings ascribed to such terms in
the Underwriting Agreement.
Subject to the foregoing and to the further exceptions
and qualifications set forth below, we are of the opinion that:
(10) The Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and fully paid
and nonassessable undivided beneficial interests in the assets of
the Trust. The holders of the Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the
holders of the Preferred Securities may be obligated, pursuant to
the Trust Agreement, (i) to provide indemnity and/or security in
connection with and pay taxes or governmental charges arising
from transfers or exchanges of Preferred Securities certificates
and the issuance of replacement Preferred Securities
certificates, and (ii) to provide security or indemnity in
connection with requests of or directions to the Property Trustee
to exercise its rights and powers under the Trust Agreement.
(11)
(11) The Indenture has been duly and validly authorized by all
necessary corporate action on the part of the Company, has been
duly and validly executed and delivered by the Company, is a
legal, valid and binding instrument of the Company enforceable
against the Company in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or other similar laws affecting creditors' rights
and general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law), and, to the best of our knowledge, the Indenture is duly
qualified under the Trust Indenture Act, and no proceedings to
suspend such qualification have been instituted or threatened by
the Commission.
(12) The statements made in the Prospectus under the captions
"Description of Preferred Securities", "Description of
Guarantee", "Description of the Junior Subordinated Debentures",
"Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee" and "Underwriting",
insofar as they purport to constitute summaries of the documents
referred to therein, constitute accurate summaries of the terms
of such documents in all material respects.
(13) The Debentures have been duly and validly authorized by
all necessary corporate action on the part of the Company, and
are legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization or
other similar laws affecting creditors' rights and general
equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law), and are entitled
to the benefits provided by the Indenture.
(14) The Guarantee Agreement has been duly and validly
authorized by all necessary corporate action on the part of the
Company, has been duly and validly executed and delivered by the
Company, is a legal, valid and binding instrument of the Company
enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws affecting
creditors' rights and general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or
at law), and, to the best of our knowledge, the Guarantee
Agreement is duly qualified under the Trust Indenture Act, and no
proceedings to suspend such qualification have been instituted or
threatened by the Commission.
(15) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
(16) An appropriate order has been issued by the Commission
under the 1935 Act authorizing the issuance and sale of the
Securities, and to the best of our knowledge, such order is in
full force and effect; and no further approval, authorization,
consent or other order of any governmental body (other than
orders of the Commission under the Securities Act, the Exchange
Act and the Trust Indenture Act, which have been duly obtained,
or in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction) is legally
required to permit the issuance and sale of the Securities.
(17) Except in each case as to the financial statements and
other financial data included or incorporated by reference
therein, upon which we do not pass, the Registration Statement,
at the time it became effective, and the Prospectus, as of its
date, complied as to form in all material respects with the
applicable requirements of the Securities Act and (except with
respect to the Form T-1s, upon which we do not pass) the Trust
Indenture Act, and the applicable instructions, rules and
regulations of the Commission thereunder or pursuant to said
instructions, rules and regulations are deemed to comply
therewith; with respect to the documents or portions thereof
filed with the Commission pursuant to the Exchange Act, and
incorporated by reference in the Prospectus pursuant to Item 12
of Form S-2, such documents or portions thereof, on the date they
were filed with the Commission, complied as to form in all
material respects with the applicable provisions of the Exchange
Act and the applicable instructions, rules and regulations of the
Commission thereunder or pursuant to said instructions, rules and
regulations are deemed to comply therewith; and, to the best of
our knowledge, the Registration Statement has become, and on the
date hereof is, effective under the Securities Act and no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose are pending
or threatened under Section 8(d) of the Securities Act.
In passing upon the form of the Registration Statement
and the form of the Prospectus, we necessarily assume the
correctness, completeness and fairness of statements made by the
Company and the Trust and the information included or
incorporated by reference in the Registration Statement and the
Prospectus and take no responsibility therefor, except insofar as
such statements relate to us and as set forth in paragraph (3)
hereof. In connection with the preparation by the Company and
the Trust of the Registration Statement and the Prospectus, we
had discussions with certain officers, employees and
representatives of the Company, the Trust and Entergy Services,
Inc., with counsel for the Company and the Trust, and with your
representatives. Our review of the Registration Statement and
the Prospectus, and such discussions, did not disclose to us any
information that gives us reason to believe that the Registration
Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date and
at the date hereof, contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
We do not express any opinion or belief as to the financial
statements or other financial data included or incorporated by
reference in the Registration Statement or Prospectus, as to the
Form T-1s or as to the information contained in the Prospectus
under the caption "Certain United States Federal Income Tax
Considerations."
This opinion is solely for the benefit of the
addressees hereof in connection with the Underwriting Agreement
and the transactions contemplated thereunder and may not be
relied upon in any manner by any other person or for any other
purpose, without our prior written consent.
Very truly yours,
WINTHROP, STIMSON, PUTNAM & ROBERTS
Exhibit 4.03
__________________________________________
ENTERGY GULF STATES, INC.
TO
THE BANK OF NEW YORK
Trustee
_________
Indenture
(For Unsecured Subordinated Debt Securities
relating to Trust Securities)
Dated as of ________, 199_
__________________________________________
<PAGE>
TABLE OF CONTENTS
PARTIES 1
RECITAL OF THE COMPANY 1
ARTICLE ONE 1
Definitions and Other Provisions of General Application 1
SECTION 101. Definitions 1
Act 2
Additional Interest 2
Affiliate 2
Authenticating Agent 2
Authorized Officer 2
Board of Directors 2
Board Resolution 2
Business Day 2
Commission 3
Company 3
Company Request or Company Order 3
Corporate Trust Office 3
corporation 3
Defaulted Interest 3
Dollar or $ 3
Event of Default 3
Governmental Authority 3
Government Obligations 3
Guarantee 4
Holder 4
Indenture 4
Interest Payment Date 4
Maturity 4
Officer's Certificate 4
Opinion of Counsel 4
Outstanding 4
Paying Agent 5
Person 5
Place of Payment 5
Predecessor Security 5
Preferred Securities 6
Property Trustee 6
Redemption Date 6
Redemption Price 6
Regular Record Date 6
Responsible Officer 6
Securities 6
Security Register and Security Registrar 6
Senior Indebtedness 6
Special Record Date 7
Stated Maturity 7
Trust 7
Trust Agreement 7
Trust Indenture Act 7
Trustee 7
United States 7
SECTION 102. Compliance Certificates and Opinions 7
SECTION 103. Form of Documents Delivered to
Trustee 8
SECTION 104. Acts of Holders 9
SECTION 105. Notices, etc. to Trustee and Company 11
SECTION 106. Notice to Holders of Securities;
Waiver 12
SECTION 107. Conflict with Trust Indenture Act 12
SECTION 108. Effect of Headings and Table of
Contents 12
SECTION 109. Successors and Assigns 12
SECTION 110. Separability Clause 13
SECTION 111. Benefits of Indenture 13
SECTION 112. Governing Law 13
SECTION 113. Legal Holidays 13
ARTICLE TWO 14
Security Forms 14
SECTION 201. Forms Generally 14
SECTION 202. Form of Trustee's Certificate of
Authentication 14
ARTICLE THREE 15
The Securities 15
SECTION 301. Amount Unlimited; Issuable in Series 15
SECTION 302. Denominations 18
SECTION 303. Execution, Authentication, Delivery
and Dating 18
SECTION 304. Temporary Securities 20
SECTION 305. Registration, Registration of
Transfer and Exchange 21
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities 22
SECTION 307. Payment of Interest; Interest Rights
Preserved 23
SECTION 308. Persons Deemed Owners 24
SECTION 309. Cancellation by Security Registrar 24
SECTION 310. Computation of Interest 24
SECTION 311. Extension of Interest Payment 24
SECTION 312. Additional Interest. 25
SECTION 313. CUSIP Numbers 25
ARTICLE FOUR 25
Redemption of Securities 25
SECTION 401. Applicability of Article 25
SECTION 402. Election to Redeem; Notice to
Trustee 25
SECTION 403. Selection of Securities to Be
Redeemed 26
SECTION 404. Notice of Redemption 26
SECTION 405. Securities Payable on Redemption
Date 28
SECTION 406. Securities Redeemed in Part 28
ARTICLE FIVE 28
Sinking Funds 28
SECTION 501. Applicability of Article 28
SECTION 502. Satisfaction of Sinking Fund
Payments with Securities 29
SECTION 503. Redemption of Securities for Sinking
Fund 29
ARTICLE SIX 30
Covenants 30
SECTION 601. Payment of Principal, Premium and
Interest 30
SECTION 602. Maintenance of Office or Agency 30
SECTION 603. Money for Securities Payments to Be
Held in Trust 31
SECTION 604. Corporate Existence 32
SECTION 605. Maintenance of Properties 32
SECTION 606. Annual Officer's Certificate as to
Compliance. 32
SECTION 607. Waiver of Certain Covenants 33
SECTION 608. Restriction on Payment of Dividends 33
SECTION 609. Maintenance of Trust Existence 34
SECTION 610. Rights of Holders of Preferred
Securities 34
ARTICLE SEVEN 34
Satisfaction and Discharge 34
SECTION 701. Satisfaction and Discharge of
Securities 34
SECTION 702. Satisfaction and Discharge of
Indenture 37
SECTION 703. Application of Trust Money 37
ARTICLE EIGHT 38
Events of Default; Remedies 38
SECTION 801. Events of Default 38
SECTION 802. Acceleration of Maturity; Rescission
and Annulment 40
SECTION 803. Collection of Indebtedness and Suits
for Enforcement by Trustee 41
SECTION 804. Trustee May File Proofs of Claim 41
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities 42
SECTION 806. Application of Money Collected 42
SECTION 807. Limitation on Suits 43
SECTION 808. Unconditional Right of Holders to
Receive Principal,
Premium and Interest 44
SECTION 809. Restoration of Rights and Remedies 44
SECTION 810. Rights and Remedies Cumulative 44
SECTION 811. Delay or Omission Not Waiver 44
SECTION 812. Control by Holders of Securities 45
SECTION 813. Waiver of Past Defaults 45
SECTION 814. Undertaking for Costs 46
SECTION 815. Waiver of Stay or Extension Laws 46
ARTICLE NINE 46
The Trustee 46
SECTION 901. Certain Duties and Responsibilities 46
SECTION 902. Notice of Defaults 48
SECTION 903. Certain Rights of Trustee 48
SECTION 904. Not Responsible for Recitals or
Issuance of Securities 49
SECTION 905. May Hold Securities 49
SECTION 906. Money Held in Trust 50
SECTION 907. Compensation and Reimbursement 50
SECTION 908. Disqualification; Conflicting
Interests. 50
SECTION 909. Corporate Trustee Required;
Eligibility 51
SECTION 910. Resignation and Removal; Appointment
of Successor 51
SECTION 911. Acceptance of Appointment by
Successor 53
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business 54
SECTION 913. Preferential Collection of Claims
Against Company 55
SECTION 914. Co-trustees and Separate Trustees. 55
SECTION 915. Appointment of Authenticating Agent 56
ARTICLE TEN 58
Holders' Lists and Reports by Trustee and Company 58
SECTION 1001. Lists of Holders 58
SECTION 1002. Reports by Trustee and Company 59
ARTICLE ELEVEN 59
Consolidation, Merger, Conveyance or Other Transfer 59
SECTION 1101. Company May Consolidate, etc., Only
on Certain Terms 59
SECTION 1102. Successor Corporation Substituted 60
ARTICLE TWELVE 60
Supplemental Indentures 60
SECTION 1201. Supplemental Indentures Without
Consent of Holders 60
SECTION 1202. Supplemental Indentures With
Consent of Holders 62
SECTION 1203. Execution of Supplemental
Indentures 64
SECTION 1204. Effect of Supplemental Indentures 64
SECTION 1205. Conformity With Trust Indenture Act 64
SECTION 1206. Reference in Securities to
Supplemental Indentures 64
SECTION 1207. Modification Without Supplemental
Indenture 65
ARTICLE THIRTEEN 65
Meetings of Holders; Action Without Meeting 65
SECTION 1301. Purposes for Which Meetings May Be
Called 65
SECTION 1302. Call, Notice and Place of Meetings 65
SECTION 1303. Persons Entitled to Vote at
Meetings 66
SECTION 1304. Quorum; Action 66
SECTION 1305. Attendance at Meetings;
Determination of Voting Rights;
Conduct and Adjournment of Meetings 67
SECTION 1306. Counting Votes and Recording Action
of Meetings 68
SECTION 1307. Action Without Meeting 68
ARTICLE FOURTEEN 69
Immunity of Incorporators, Stockholders, Officers and
Directors 69
SECTION 1401. Liability Solely Corporate 69
ARTICLE FIFTEEN 69
Subordination of Securities 69
SECTION 1501. Securities Subordinate to Senior
Indebtedness. 69
SECTION 1502. Payment Over of Proceeds of
Securities 70
SECTION 1503. Disputes with Holders of Certain
Senior Indebtedness 72
SECTION 1504. Subrogation 72
SECTION 1505. Obligation of the Company
Unconditional 72
SECTION 1506. Priority of Senior Indebtedness
Upon Maturity 73
SECTION 1507. Trustee as Holder of Senior
Indebtedness 73
SECTION 1508. Notice to Trustee to Effectuate
Subordination 73
SECTION 1509. Modification, Extension, etc. of
Senior Indebtedness 74
SECTION 1510. Trustee Has No Fiduciary Duty to
Holders of Senior Indebtedness 74
SECTION 1511. Paying Agents Other Than the
Trustee 74
SECTION 1512. Rights of Holders of Senior
Indebtedness Not Impaired 74
SECTION 1513. Effect of Subordination Provisions;
Termination 75
Testimonium 76
Signatures and Seals 76
Acknowledgements 78
Note: This table of contents shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
ENTERGY GULF STATES, INC.
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of ________, 199_
Trust Indenture Act Section Indenture Section
310 (a)(1) 909
(a)(2) 909
(a)(3) 914
(a)(4) Not Applicable
(b) 908
910
311 (a) 913
(b) 913
(c) 913
312 (a) 1001
(b) 1001
(c) 1001
313 (a) 1002
(b) 1002
(c) 1002
314 (a) 1002
(a)(4) 606
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
315 (a) 901
903
(b) 902
(c) 901
(d) 901
(e) 814
316 (a) 812
813
(a)(1)(A) 802
812
(a)(1)(B) 813
(a)(2) Not Applicable
(b) 808
317 (a)(1) 803
(a)(2) 804
(b) 603
318 (a) 107
<PAGE>
INDENTURE, dated as of ________, 199_, between
ENTERGY GULF STATES, INC., a corporation duly organized and
existing under the laws of the State of Texas (herein called
the "Company"), having its principal office at 350 Pine
Street, Beaumont, Texas 77701, and THE BANK OF NEW YORK, a
New York banking corporation, having its principal corporate
trust office at 101 Barclay Street, New York, New York
10286, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from
time to time of its unsecured subordinated debentures, notes
or other evidences of indebtedness (herein called the
"Securities"), in an unlimited aggregate principal amount to
be issued in one or more series as contemplated herein; and
all acts necessary to make this Indenture a valid agreement
of the Company have been performed.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires, capitalized terms used herein shall have the
meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions
upon which the Securities are to be authenticated, issued
and delivered and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of
any series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, 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 terms used herein without definition which
are defined in the Trust Indenture Act, either directly
or by reference therein, have the meanings assigned to
them therein;
(c) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles in the
United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting
principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles
as are generally accepted in the United States at the
date of such computation or, at the election of the
Company from time to time, at the date of the execution
and delivery of this Indenture; provided, however, that
in determining generally accepted accounting principles
applicable to the Company, the Company shall, to the
extent required, conform to any order, rule or regulation
of any administrative agency, regulatory authority or
other governmental body having jurisdiction over the
Company; and
(d) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section or
other subdivision.
Certain terms, used principally in Article Nine, are
defined in that Article.
"Act", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"Additional Interest" has the meaning specified in
Section 312.
"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.
"Authenticating Agent" means any Person (other than
the Company or an Affiliate of the Company) authorized by
the Trustee to act on behalf of the Trustee to authenticate
one or more series of Securities.
"Authorized Officer" means the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, or any other duly authorized officer of
the Company.
"Board of Directors" means either the board of
directors of the Company or any committee thereof duly
authorized to act in respect of matters relating to this
Indenture.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or
other location are generally authorized or required by law,
regulation or executive order to remain closed, except as
may be otherwise specified as contemplated by Section 301.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, as amended, or, if at
any time after the date of execution and delivery of this
Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act,
then the body, if any, performing such duties at such time.
"Company" means the Person named as the "Company" in
the first paragraph of this Indenture until a successor
Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by an
Authorized Officer and delivered to the Trustee.
"Corporate Trust Office" means 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 execution and delivery of this Indenture is
located at 101 Barclay Street, 21 West, New York, New York
10286.
"corporation" means a corporation, association,
company, joint stock company or business trust.
"Defaulted Interest" has the meaning specified in
Section 307.
"Dollar" or "$" means a dollar or other equivalent
unit in such coin or currency of the United States as at the
time shall be legal tender for the payment of public and
private debts.
"Event of Default" with respect to Securities of a
particular series has the meaning specified in Section 801.
"Governmental Authority" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any
department, agency, authority or other instrumentality of
any of the foregoing.
"Government Obligations" means:
(a) direct obligations of, or obligations the
principal of and interest on which are
unconditionally guaranteed by, the United States and
entitled to the benefit of the full faith and credit
thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership
interest in obligations described in clause (a)
above or in any specific interest or principal
payments due in respect thereof; provided, however,
that the custodian of such obligations or specific
interest or principal payments shall be a bank or
trust company (which may include the Trustee or any
Paying Agent) subject to Federal or state
supervision or examination with a combined capital
and surplus of at least $50,000,000; and provided,
further, that except as may be otherwise required by
law, such custodian shall be obligated to pay to the
holders of such certificates, depositary receipts or
other instruments the full amount received by such
custodian in respect of such obligations or specific
payments and shall not be permitted to make any
deduction therefrom.
"Guarantee" means the guarantee agreement delivered
from the Company to a Trust, for the benefit of the
holders of Preferred Securities issued by such Trust.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indenture" means this instrument as originally
executed and delivered and as it may from time to time be
supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms
of a particular series of Securities established as
contemplated by Section 301.
"Interest Payment Date", when used with respect to
any Security, means the Stated Maturity of an installment
of interest on such Security.
"Maturity", when used with respect to any Security,
means the date on which the principal of such Security or
an installment of principal becomes due and payable as
provided in such Security or in this Indenture, whether at
the Stated Maturity, by declaration of acceleration, upon
call for redemption or otherwise.
"Officer's Certificate" means a certificate signed by
an Authorized Officer and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company, or other
counsel acceptable to the Trustee.
"Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities
theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid in
accordance with Section 701; and
(c) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which
other Securities have been authenticated and
delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to
it and the Company that such Securities are held by a
bona fide purchaser or purchasers in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether or not the
Holders of the requisite principal amount of the
Securities Outstanding under this Indenture, or the
Outstanding Securities of any series, have given any
request, demand, authorization, direction, notice,
consent or waiver hereunder or whether or not a quorum is
present at a meeting of Holders of Securities, Securities
owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this
Indenture, or (except for purposes of actions to be taken
by Holders generally under Section 812 or 813) all
Outstanding Securities of each such series, as the case
may be, determined without regard to this provision)
shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or
upon any such determination as to the presence of a
quorum, only Securities which the Trustee knows to be so
owned shall be so disregarded; provided, however, that
Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such
other obligor; and provided, further, that, in the case
of any Security the principal of which is payable from
time to time without presentment or surrender, the
principal amount of such Security that shall be deemed to
be Outstanding at any time for all purposes of this
Indenture shall be the original principal amount thereof
less the aggregate amount of principal thereof
theretofore paid.
"Paying Agent" means any Person, including the
Company, authorized by the Company to pay the principal
of, and premium, if any, or interest, if any, on any
Securities on behalf of the Company.
"Person" means any individual, corporation,
partnership, joint venture, trust, limited liability
company, limited liability partnership or unincorporated
organization or any Governmental Authority.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places,
specified as contemplated by Section 301, at which,
subject to Section 602, principal of and premium, if any,
and interest, if any, on the Securities of such series are
payable.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion
of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed (to the extent lawful) to
evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Preferred Securities" means any preferred trust
interests issued by a Trust or similar securities issued
by permitted successors to such Trust in accordance with
the Trust Agreement pertaining to such Trust.
"Property Trustee" has the meaning specified in
Section 111.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to
be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series
means the date specified for that purpose as contemplated
by Section 301.
"Responsible Officer", when used with respect to the
Trustee, means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any
securities authenticated and delivered under this
Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness" means all obligations (other
than non-recourse obligations and the indebtedness issued
under this Indenture) of, or guaranteed or assumed by, the
Company for borrowed money, including both senior and
subordinated indebtedness for borrowed money (other than
the Securities), or for the payment of money relating to
any lease which is capitalized on the consolidated balance
sheet of the Company and its subsidiaries in accordance
with generally accepted accounting principles as in effect
from time to time, or evidenced by bonds, debentures,
notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligations,
whether existing as of the date of this Indenture or
subsequently incurred by the Company unless, in the case
of any particular indebtedness, obligation, renewal,
extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the
same expressly provides that such indebtedness,
obligation, renewal, extension or refunding is not
superior in right of payment to or is pari passu with the
Securities; provided that the Company's obligations under
the Guarantee shall not be deemed to be Senior
Indebtedness.
"Special Record Date" for the payment of any
Defaulted Interest on the Securities of any series means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any
obligation or any installment of principal thereof or
interest thereon, means the date on which the principal of
such obligation or such installment of principal or
interest is stated to be due and payable (without regard
to any provisions for redemption, prepayment,
acceleration, purchase or extension).
"Trust" means Entergy Gulf States Capital I, Entergy
Gulf States Capital II, Entergy Gulf States Capital III,
each a statutory business trust created under the laws of
the State of Delaware, or any other Trust designated
pursuant to Section 301 hereof or any permitted successor
under the Trust Agreement pertaining to such Trust.
"Trust Agreement" means the Amended and Restated
Trust Agreement, dated as of _________, ____, relating to
Entergy Gulf States Capital I, the Amended and Restated
Trust Agreement relating to Entergy Gulf States Capital
II, the Amended and Restated Trust Agreement relating to
Entergy Gulf States Capital III or an Amended and Restated
Trust Agreement relating to a Trust designated pursuant to
Section 301 hereof, in each case, among the Company, as
Depositor, the trustees named therein and several holders
referred to therein as they may be amended from time to
time.
"Trust Indenture Act" means, as of any time, the
Trust Indenture Act of 1939, or any successor statute, as
in effect at such time.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor
Trustee shall have become such with respect to one or more
series of Securities pursuant to the applicable provisions
of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities
of that series.
"United States" means the United States of America,
its Territories, its possessions and other areas subject
to its political jurisdiction.
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company
to the Trustee to take any action under any provision of
this Indenture, the Company shall, if requested by the
Trustee, furnish to the Trustee an Officer's Certificate
stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action
(including any covenants compliance with which constitutes
a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such
application or request as to which the furnishing of such
documents is specifically required by any provision of
this Indenture relating to such particular application or
request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in
this Indenture shall include:
(a) a statement that each Person signing such
certificate or opinion has read such covenant or
condition and the definitions herein relating
thereto;
(b) 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;
(c) a statement that, in the opinion of each
such Person, such Person has made such examination
or investigation as is necessary to enable such
Person to express an informed opinion as to whether
or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion
of each such Person, such condition or covenant has
been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required
to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or
covered by only one document, but one such Person may
certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows,
or in the exercise of reasonable care should know, that
the certificate or opinion or representations with
respect to the matters upon which such Officer's
Certificate or opinion are based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers
of the Company stating that the information with respect
to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or
opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever, subsequent to the receipt by the
Trustee of any Board Resolution, Officer's Certificate,
Opinion of Counsel or other document or instrument, a
clerical, typographical or other inadvertent or
unintentional error or omission shall be discovered
therein, a new document or instrument may be substituted
therefor in corrected form with the same force and effect
as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution
and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or
delivered as of the date or dates required with respect
to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary
notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at
the request of the Company which could not have been
taken had the original document or instrument not
contained such error or omission, the action so taken
shall not be invalidated or otherwise rendered
ineffective but shall be and remain in full force and
effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without
limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or
instrument shall nevertheless be the valid obligations of
the Company entitled to the benefits of this Indenture
equally and ratably with all other Outstanding
Securities, except as aforesaid.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization,
direction, notice, consent, election, waiver or
other action provided by this Indenture to be made,
given or taken by Holders may be embodied in and
evidenced by one or more instruments of
substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing
or, alternatively, may be embodied in and evidenced
by the record of Holders voting in favor thereof,
either in person or by proxies duly appointed in
writing, at any meeting of Holders duly called and
held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and
any such record. Except as herein otherwise
expressly provided, such action shall become
effective when such instrument or instruments or
record or both are delivered to the Trustee and,
where it is hereby expressly required, to the
Company. Such instrument or instruments and any
such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument
or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding
by any Person of a Security, shall be sufficient for
any purpose of this Indenture and (subject to Sec
tion 901) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this
Section. The record of any meeting of Holders shall
be proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be
proved by the affidavit of a witness of such
execution or by 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 or may be
proved in any other manner which the Trustee and the
Company deem sufficient. 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.
(c) The principal amount and serial numbers of
Securities held by any Person, and the date of
holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization,
direction, notice, consent, election, waiver or
other Act of a Holder shall bind every future Holder
of the same Security and the Holder of every
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 Trustee or the Company in reliance
thereon, whether or not notation of such action is
made upon such Security.
(e) Until such time as written instruments
shall have been delivered to the Trustee with
respect to the requisite percentage of principal
amount of Securities for the action contemplated by
such instruments, any such instrument executed and
delivered by or on behalf of a Holder may be revoked
with respect to any or all of such Securities by
written notice by such Holder or any subsequent
Holder, proven in the manner in which such
instrument was proven.
(f) Securities of any series authenticated and
delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by
such Act of Holders. If the Company shall so
determine, new Securities of any series so modified
as to conform, in the opinion of the Trustee and the
Company, to such action may be prepared and executed
by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities
of such series.
(g) If the Company shall solicit from Holders
any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company
may, at its option, by Board Resolution, fix in
advance a record date for the determination of
Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or
other Act, 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 Act may be given before or
after such record date, but only the Holders of
record at the close of business on the record date
shall be deemed to be Holders for the purposes of
(i) determining whether Holders of the requisite
proportion of the Outstanding Securities have
authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of the
record date or (ii) determining which Holders may
revoke any such Act (notwithstanding Section
104(e)).
SECTION 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction,
notice, consent, election, waiver or Act of Holders or
other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with, the
Trustee by any Holder or by the Company, or the Company
by the Trustee or by any Holder, shall be sufficient for
every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered
personally to an officer or other responsible employee of
the addressee, or transmitted by facsimile transmission,
telex or other direct written electronic means to such
telephone number or other electronic communications
address as the parties hereto shall from time to time
designate, or transmitted by registered mail, charges
prepaid, to the applicable address set opposite such
party's name below or to such other address as either
party hereto may from time to time designate:
If to the Trustee, to:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-____
Telecopy: (212) 815-5915
If to the Company, to:
Entergy Gulf States, Inc.
350 Pine Street
Beaumont, Texas 77701
Attention: Treasurer
Telephone:
Telecopy:
With a copy to:
Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Attention: Legal Department - Corporate and
Securities Law Division
Telephone: (504) 576-2272
Telecopy: (504) 576-4150
Any communication contemplated herein shall be
deemed to have been made, given, furnished and filed if
personally delivered, on the date of delivery, if
transmitted by facsimile transmission or other direct
written electronic means, on the date of transmission,
and if transmitted by registered mail, on the date of
receipt.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein,
where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given, and
shall be deemed given, to Holders if in writing and
mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as
it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In case by reason of the suspension of regular
mail service or by reason of any other cause it shall be
impracticable to give such notice to Holders by mail,
then such notification as shall be made with the approval
of the Trustee shall constitute a sufficient notification
for every purpose hereunder. In any case where notice to
Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of
such notice with respect to other Holders.
Any notice required by this Indenture may be
waived in writing by the Person entitled to receive such
notice, either before or after the event otherwise to be
specified therein, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. Conflict with Trust Indenture Act.
If any provision of this Indenture limits,
qualifies or conflicts with another provision hereof
which is required or deemed to be included in this
Indenture by, or is otherwise governed by, any of the
provisions of the Trust Indenture Act, such other
provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the
Trust Indenture Act shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings in this
Indenture and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture
by the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in
the Securities shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or the Securities,
express or implied, shall give to any Person, other than
the parties hereto, their successors hereunder, the
Holders and, so long as the notice described in Section
1513 hereof has not been given, the holders of Senior
Indebtedness, any benefit or any legal or equitable
right, remedy or claim under this Indenture; provided,
however, if the property trustee under the related Trust
Agreement (the "Property Trustee") fails to enforce its
rights with respect to the Securities or the related
Trust Agreement, a holder of Preferred Securities may
institute a legal proceeding directly against the Company
to enforce the Property Trustee's rights with respect to
the Securities or such Trust Agreement, to the fullest
extent permitted by law, without first instituting any
legal proceeding against the Property Trustee or any
other person or entity.
SECTION 112. Governing Law.
This Indenture and the Securities shall be
governed by and construed in accordance with the laws of
the State of New York, except to the extent that the law
of any other jurisdiction shall be mandatorily
applicable.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall
not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or
of the Securities other than a provision in Securities of
any series, or in the Board Resolution or Officer's
Certificate which establishes the terms of the Securities
of such series, which specifically states that such
provision shall apply in lieu of this Section) payment of
interest or principal and premium, if any, need not be
made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of
Payment, 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, and in the same amount, as if
made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, as the case may be, and, if such
payment is made or duly provided for on such Business
Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be,
to such Business Day.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The definitive Securities of each series shall
be in substantially the form or forms thereof established
in the indenture supplemental hereto establishing such
series or in a Board Resolution establishing such series,
or in an Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, in each case
with such appropriate insertions, omissions,
substitutions and other variations as are required or
permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends
or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their
execution of the Securities. If the form or forms of
Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a
Board Resolution, such Board Resolution and Officer's
Certificate, if any, shall be delivered to the Trustee at
or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and
delivery of such Securities.
Unless otherwise specified as contemplated by
Section 301, the Securities of each series shall be
issuable in registered form without coupons. The
definitive Securities shall be produced in such manner as
shall be determined by the officers executing such
Securities, as evidenced by their execution thereof.
SECTION 202. Form of Trustee's Certificate of
Authentication.
The Trustee's certificate of authentication
shall be in substantially the form set forth below:
This is one of the Securities of
the series designated therein referred to in
the within-mentioned Indenture.
Dated: _________________________________
as Trustee
By:____________________________
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities
which may be authenticated and delivered under this
Indenture is unlimited; provided, however, that all
Securities shall be issued to a Trust in exchange for
securities of the Company or to evidence loans by a Trust
of the proceeds of the issuance of Preferred Securities
of such Trust plus the amount deposited by the Company
with such Trust from time to time.
The Securities may be issued in one or more
series. Prior to the authentication, issuance and
delivery of Securities of any series there shall be
established by specification in a supplemental indenture
or in a Board Resolution, or in an Officer's Certificate
pursuant to a supplemental indenture or a Board
Resolution:
(a) the title of the Securities of such series
(which shall distinguish the Securities of such
series from Securities of all other series);
(b) any limit upon the aggregate principal
amount of the Securities of such series which may be
authenticated and delivered under this Indenture
(except for Securities authenticated and delivered
upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of such series
pursuant to Section 304, 305, 306, 406 or 1206 and
except for any Securities which, pursuant to Section
303, are deemed never to have been authenticated and
delivered hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of
such series shall be payable on any Interest Payment
Date, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities)
are registered at the close of business on the
Regular Record Date for such interest;
(d) the date or dates on which the principal
of the Securities of such series is payable or any
formulary or other method or other means by which
such date or dates shall be determined, by reference
to an index or other fact or event ascertainable
outside this Indenture or otherwise (without regard
to any provisions for redemption, prepayment,
acceleration, purchase or extension);
(e) the rate or rates at which the Securities
of such series shall bear interest, if any
(including the rate or rates at which overdue
principal shall bear interest, if different from the
rate or rates at which such Securities shall bear
interest prior to Maturity, and, if applicable, the
rate or rates at which overdue premium or interest
shall bear interest, if any), or any formulary or
other method or other means by which such rate or
rates shall be determined, by reference to an index
or other fact or event ascertainable outside this
Indenture or otherwise; the date or dates from which
such interest shall accrue; the Interest Payment
Dates on which such interest shall be payable and
the Regular Record Date, if any, for the interest
payable on such Securities on any Interest Payment
Date; the right of the Company, if any, to extend
the interest payment periods and the duration of any
such extension as contemplated by Section 311; and
the basis of computation of interest, if other than
as provided in Section 310;
(f) the place or places at which or methods by
which (1) the principal of and premium, if any, and
interest, if any, on Securities of such series shall
be payable, (2) registration of transfer of
Securities of such series may be effected, (3)
exchanges of Securities of such series may be
effected and (4) notices and demands to or upon the
Company in respect of the Securities of such series
and this Indenture may be served; the Security
Registrar and Paying Agent or Agents for such
series; and if such is the case, and if acceptable
to the Trustee, that the principal of such
Securities shall be payable without presentment or
surrender thereof;
(g) the period or periods within which, or the
date or dates on which, the price or prices at which
and the terms and conditions upon which the
Securities of such series may be redeemed, in whole
or in part, at the option of the Company and any
restrictions on such redemptions, including but not
limited to a restriction on a partial redemption by
the Company of the Securities of any series,
resulting in delisting of such Securities from any
national exchange;
(h) the obligation or obligations, if any, of
the Company to redeem or purchase the Securities of
such series pursuant to any sinking fund or other
analogous mandatory redemption provisions or at the
option of a Holder thereof and the period or periods
within which or the date or dates on which, the
price or prices at which and the terms and
conditions upon which such Securities shall be
redeemed or purchased, in whole or in part, pursuant
to such obligation, and applicable exceptions to the
requirements of Section 404 in the case of mandatory
redemption or redemption at the option of the
Holder;
(i) the denominations in which Securities of
such series shall be issuable if other than
denominations of $25 and any integral multiple
thereof;
(j) the currency or currencies, including com
posite currencies, in which payment of the principal
of and premium, if any, and interest, if any, on the
Securities of such series shall be payable (if other
than in Dollars);
(k) if the principal of or premium, if any, or
interest, if any, on the Securities of such series
are to be payable, at the election of the Company or
a Holder thereof, in a coin or currency other than
that in which the Securities are stated to be
payable, the period or periods within which and the
terms and conditions upon which, such election may
be made;
(l) if the principal of or premium, if any, or
interest, if any, on the Securities of such series
are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in
securities or other property, the type and amount of
such securities or other property, or the formulary
or other method or other means by which such amount
shall be determined, and the period or periods
within which, and the terms and conditions upon
which, any such election may be made;
(m) if the amount payable in respect of
principal of or premium, if any, or interest, if
any, on the Securities of such series may be
determined with reference to an index or other fact
or event ascertainable outside this Indenture, the
manner in which such amounts shall be determined to
the extent not established pursuant to clause (e) of
this paragraph;
(n) if other than the principal amount
thereof, the portion of the principal amount of
Securities of such series which shall be payable
upon declaration of acceleration of the Maturity
thereof pursuant to Section 802;
(o) any Events of Default, in addition to
those specified in Section 801, with respect to the
Securities of such series, and any covenants of the
Company for the benefit of the Holders of the
Securities of such series, in addition to those set
forth in Article Six and whether any such covenants
may be waived pursuant to Section 607;
(p) the terms, if any, pursuant to which the
Securities of such series may be converted into or
exchanged for shares of capital stock or other
securities of the Company or any other Person;
(q) the obligations or instruments, if any,
which shall be considered to be Government
Obligations in respect of the Securities of such
series denominated in a currency other than Dollars
or in a composite currency, and any additional or
alternative provisions for the reinstatement of the
Company's indebtedness in respect of such Securities
after the satisfaction and discharge thereof as
provided in Section 701;
(r) if the Securities of such series are to be
issued in global form, (i) any limitations on the
rights of the Holder or Holders of such Securities
to transfer or exchange the same or to obtain the
registration of transfer thereof, (ii) any
limitations on the rights of the Holder or Holders
thereof to obtain certificates therefor in
definitive form in lieu of global form and (iii) any
and all other matters incidental to such Securities;
(s) if the Securities of such series are to be
issuable as bearer securities, any and all matters
incidental thereto which are not specifically
addressed in a supplemental indenture as
contemplated by clause (g) of Section 1201;
(t) to the extent not established pursuant to
clause (r) of this paragraph, any limitations on the
rights of the Holders of the Securities of such
Series to transfer or exchange such Securities or to
obtain the registration of transfer thereof; and if
a service charge will be made for the registration
of transfer or exchange of Securities of such series
the amount or terms thereof;
(u) any exceptions to Section 113, or
variation in the definition of Business Day, with
respect to the Securities of such series;
(v) the designation of the Trust to which
Securities of such series are to be issued; and
(w) any other terms of the Securities of such
series not inconsistent with the provisions of this
Indenture.
The Securities of each series shall be
subordinated in right of payment to Senior Indebtedness
as provided in Article Fifteen.
SECTION 302. Denominations.
Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, the
Securities of each series shall be issuable in
denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and
Dating.
Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, the
Securities shall be executed on behalf of the Company by
an Authorized Officer and may have the corporate seal of
the Company affixed thereto or reproduced thereon
attested by any other Authorized Officer or by the
Secretary or an Assistant Secretary of the Company. The
signature of any or all of these officers on the Secu
rities may be manual or facsimile.
Securities bearing the manual or facsimile
signatures of individuals who were at the time of
execution Authorized Officers or the Secretary or an
Assistant Secretary of the Company shall bind the
Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
The Trustee shall authenticate and deliver
Securities of a series, for original issue, at one time
or from time to time in accordance with the Company Order
referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing
the form or forms and terms of such series, as
provided in Sections 201 and 301;
(b) a Company Order requesting the
authentication and delivery of such Securities and,
to the extent that the terms of such Securities
shall not have been established in an indenture
supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated
by Sections 201 and 301, establishing such terms;
(c) the Securities of such series, executed on
behalf of the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such
Securities have been duly authorized by the
Company and have been established in conformity
with the provisions of this Indenture;
(ii) the terms of such Securities
have been duly authorized by the Company and
have been established in conformity with the
provisions of this Indenture; and
(iii) such Securities, when
authenticated and delivered by the Trustee and
issued and delivered by the Company in the
manner and subject to any conditions specified
in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute
valid and legally binding obligations of the
Company, entitled to the benefits provided by
this Indenture, and enforceable in accordance
with their terms, subject, as to enforcement,
to laws relating to or affecting generally the
enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency
laws and to general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at
law).
If the form or terms of the Securities of any
series have been established by or pursuant to a Board
Resolution or an Officer's Certificate as permitted by
Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such
Securities pursuant to this Indenture will materially or
adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable
to the Trustee.
Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities,
each Security shall be dated the date of its
authentication.
Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities, no
Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of
authentication substantially in the form provided for
herein executed by the Trustee or an Authenticating Agent
by manual signature of an authorized officer thereof, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has
been duly authenticated and made available for delivery
hereunder and is entitled to the benefits of this
Indenture. Notwithstanding the foregoing, if any
Security shall have been authenticated and made available
for delivery hereunder to the Company, or any Person
acting on its behalf, but shall never have been issued
and sold by the Company, and the Company shall deliver
such Security to the Trustee for cancellation as provided
in Section 309 together with a written statement (which
need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company,
for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and made
available for delivery hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. Temporary Securities.
Pending the preparation of definitive
Securities of any series, the Company may execute, and
upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which
are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities
in lieu of which they are issued, with such appropriate
insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine,
as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not
recite specific redemption, sinking fund, conversion or
exchange provisions.
Unless otherwise specified as contemplated by
Section 301 with respect to the Securities of any series,
after the preparation of definitive Securities of such
series, the temporary Securities of such series shall be
exchangeable, without charge to the Holder thereof, for
definitive Securities of such series upon surrender of
such temporary Securities at the office or agency of the
Company maintained pursuant to Section 602 in a Place of
Payment for such Securities. Upon such surrender of
temporary Securities, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and
make available for delivery in exchange therefor
definitive Securities of the same series, of authorized
denominations and of like tenor and aggregate principal
amount.
Until exchanged in full as hereinabove
provided, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and
of like tenor authenticated and made available for
delivery hereunder.
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept in one of
the offices designated pursuant to Section 602, with
respect to the Securities of each series, a register (the
register kept in accordance with this Section being
referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities
of such series and the registration of transfer thereof.
The Company shall designate one Person to maintain the
Security Register for the Securities of each series, and
such Person is referred to herein, with respect to such
series, as the "Security Registrar." Anything herein to
the contrary notwithstanding, the Company may designate
one of its offices as the office in which the register
with respect to the Securities of one or more series
shall be maintained, and the Company may designate itself
the Security Registrar with respect to one or more of
such series. The Security Register shall be open for
inspection by the Trustee and the Company at all
reasonable times.
Except as otherwise specified as contemplated
by Section 301 with respect to the Securities of any
series, upon surrender for registration of transfer of
any Security of such series at the office or agency of
the Company maintained pursuant to Section 602 in a Place
of Payment for such series, the Company shall execute,
and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or
transferees, one or more new Securities of the same
series, of authorized denominations and of like tenor and
aggregate principal amount.
Except as otherwise specified as contemplated
by Section 301 with respect to the Securities of any
series, any Security of such series may be exchanged at
the option of the Holder, for one or more new Securities
of the same series, of authorized denominations and of
like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or
agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, the
Securities which the Holder making the exchange is
entitled to receive.
All Securities delivered upon any registration
of transfer or exchange of Securities shall be valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as
the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so
required by the Company, the Trustee or the Security
Registrar) be duly endorsed or shall be accompanied by a
written instrument of transfer in form satisfactory to
the Company, the Trustee or the Security Registrar, as
the case may be, duly executed by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise specified as contemplated by
Section 301 with respect to Securities of any series, no
service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in
connection with any registration of transfer or exchange
of Securities, other than exchanges pursuant to Section
304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or
to provide for the registration of transfer of or the
exchange of (a) Securities of any series during a period
of 15 days immediately preceding the date notice is to be
given identifying the serial numbers of such series
called for redemption or (b) any Security so selected for
redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange
therefor a new Security of the same series, and of like
tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and
the Trustee (a) evidence to their satisfaction of the
ownership of and the destruction, loss or theft of any
Security and (b) such security or indemnity as may be
reasonably required by them to save each of them and any
agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security
is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and make available for delivery, in lieu of
any such destroyed, lost or stolen Security, a new
Security of the same series, and of like tenor and
principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under
this Section, the Company may require the payment of a
sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security of any series issued
pursuant to this Section in lieu of any destroyed, lost
or stolen Security shall constitute an original
additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone other than the Holder of
such new Security, and any such new Security shall be
entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of
such series duly issued hereunder.
The provisions of this Section are exclusive
and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 307. Payment of Interest; Interest Rights
Preserved.
Unless otherwise specified as contemplated by
Section 301 with respect to the Securities of any series,
interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record
Date for such interest.
Subject to Section 311, any interest on any
Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the
related Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in
clause (a) or (b) below:
(a) The Company may elect to make payment of
any Defaulted Interest to the Persons in whose names
the Securities of such series (or their respective
Predecessor Securities) are registered at the close
of business on a date (herein called a "Special
Record Date") for the payment of such Defaulted
Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed
to be paid on each Security of such series 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 on or 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 be not more than 15
days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the
name and at the expense of the Company, shall
promptly cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at the
address of such Holder as it appears in the Security
Register, 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 so mailed, such Defaulted
Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective
Predecessor Securities) are registered at the close
of business on such Special Record Date and shall be
no longer payable pursuant to the following clause
(b).
(b) The Company may make payment of any
Defaulted Interest on the Securities of any series
in any other lawful manner not inconsistent with the
requirements of any securities exchange on which
such Securities 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.
Subject to the foregoing provisions of this
Section and Section 305, each Security delivered under
this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry
the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
The Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name
such Security is registered as the absolute owner of such
Security for the purpose of receiving payment of
principal of and premium, if any, and (subject to
Sections 305 and 307) interest, if any, on such Security
and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall
be affected by notice to the contrary.
SECTION 309. Cancellation by Security Registrar.
All Securities surrendered for payment, re
demption, registration of transfer or exchange shall, if
surrendered to any Person other than the Security
Registrar, be delivered to the Security Registrar and, if
not theretofore canceled, shall be promptly canceled by
the Security Registrar. The Company may at any time
deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered
hereunder which the Company may have acquired in any
manner whatsoever or which the Company shall not have
issued and sold, and all Securities so delivered shall be
promptly canceled by the Security Registrar. No
Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture.
All canceled Securities held by the Security Registrar
shall be disposed of in accordance with a Company Order
delivered to the Security Registrar and the Trustee, and
the Security Registrar shall promptly deliver a
certificate of disposition to the Trustee and the Company
unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned
to it. The Security Registrar shall promptly deliver
evidence of any cancellation of a Security in accordance
with this Section 309 to the Trustee and the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated
by Section 301 for Securities of any series, interest on
the Securities of each series shall be computed on the
basis of a 360-day year consisting of twelve 30-day
months.
SECTION 311. Extension of Interest Payment.
The Company shall have the right at any time, so
long as no Event of Default shall have occurred and be
continuing with respect to the Securities of any series
hereunder, to extend interest payment periods on all
Securities of one or more series, if so specified as
contemplated by Section 301 with respect to such
Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such
Securities.
SECTION 312. Additional Interest.
So long as any Preferred Securities remain
outstanding, if the Trust which issued such Preferred
Securities shall be required to pay, with respect to its
income derived from the interest payments on the
Securities of any series, any amounts for or on account
of any taxes, duties, assessments or governmental charges
of whatever nature imposed by the United States, or any
other taxing authority, then, in any such case, the
Company will pay as interest on such series such
additional interest ("Additional Interest") as may be
necessary in order that the net amounts received and
retained by such Trust after the payment of such taxes,
duties, assessments or governmental charges shall result
in such Trust's having such funds as it would have had in
the absence of the payment of such taxes, duties,
assessments or governmental charges.
SECTION 313. CUSIP Numbers.
The Company in issuing Securities of any series
may use a "CUSIP" number (if then generally in use) and,
if so, the Trustee shall use the CUSIP number in notices
of redemption or exchange as a convenience to the Holders
of the Securities of such series; provided, that any such
notice may state that no such representation is made as
to the correctness or accuracy of the CUSIP number
printed in the notice or in the Securities of such
series, and that reliance may be placed only on the other
identification numbers printed on the Securities of such
series.
ARTICLE FOUR
Redemption of Securities
SECTION 401. Applicability of Article.
Securities of any series which are redeemable
before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities
of such series) in accordance with this Article.
SECTION 402. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any
Securities shall be evidenced by a Board Resolution or an
Officer's Certificate. The Company shall, at least 45
days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemp
tion Date and of the principal amount of such Securities
to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction
on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant
to an election of the Company which is subject to a
condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officer's
Certificate evidencing compliance with such restriction
or condition.
SECTION 403. Selection of Securities to Be Redeemed.
If less than all the Securities of any series
are to be redeemed, the particular Securities to be
redeemed shall be selected by the Security Registrar from
the Outstanding Securities of such series not previously
called for redemption, by such method as shall be
provided for any particular series, or, in the absence of
any such provision, by such method of random selection as
the Security Registrar shall deem fair and appropriate
and which may, in any case, provide for the selection for
redemption of portions (equal to the minimum authorized
denomination for Securities of such series or any
integral multiple thereof) of the principal amount of
Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of
such series; provided, however, that if, as indicated in
an Officer's Certificate, the Company shall have offered
to purchase all or any principal amount of the Securities
then Outstanding of any series, and less than all of such
Securities as to which such offer was made shall have
been tendered to the Company for such purchase, the
Security Registrar, if so directed by Company Order,
shall select for redemption all or any principal amount
of such Securities which have not been so tendered.
The Security Registrar shall promptly notify
the Company and the Trustee in writing of the Securities
selected for redemption and, in the case of any
Securities selected to be redeemed in part, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities
which has been or is to be redeemed.
SECTION 404. Notice of Redemption.
Notice of redemption shall be given in the
manner provided in Section 106 to the Holders of the
Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any
series are to be redeemed, the identification of the
particular Securities to be redeemed and the portion
of the principal amount of any Security to be
redeemed in part,
(d) that on the Redemption Date the Redemption
Price, together with accrued interest, if any, to
the Redemption Date, will become due and payable
upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to
accrue on and after said date,
(e) the place or places where such Securities
are to be surrendered for payment of the Redemption
Price and accrued interest, if any, unless it shall
have been specified as contemplated by Section 301
with respect to such Securities that such surrender
shall not be required,
(f) that the redemption is for a sinking or
other fund, if such is the case, and
(g) such other matters as the Company shall
deem desirable or appropriate.
Unless otherwise specified with respect to any
Securities in accordance with Section 301, with respect
to any notice of redemption of Securities at the election
of the Company, unless, upon the giving of such notice,
such Securities shall be deemed to have been paid in
accordance with Section 701, such notice may state that
such redemption shall be conditional upon the receipt by
the Paying Agent or Agents for such Securities, on or
prior to the date fixed for such redemption, of money
sufficient to pay the principal of and premium, if any,
and interest, if any, on such Securities and that if such
money shall not have been so received such notice shall
be of no force or effect and the Company shall not be
required to redeem such Securities. In the event that
such notice of redemption contains such a condition and
such money is not so received, the redemption shall not
be made and within a reasonable time thereafter notice
shall be given, in the manner in which the notice of
redemption was given, that such money was not so received
and such redemption was not required to be made, and the
Paying Agent or Agents for the Securities otherwise to
have been redeemed shall promptly return to the Holders
thereof any of such Securities which had been surrendered
for payment upon such redemption.
Notice of redemption of Securities to be
redeemed at the election of the Company, and any notice
of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the
Company's request, by the Security Registrar in the name
and at the expense of the Company. Notice of mandatory
redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.
SECTION 405. Securities Payable on Redemption Date.
Notice of redemption having been given as
aforesaid, and the conditions, if any, set forth in such
notice having been satisfied, the Securities or portions
thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein
specified, and from and after such date (unless, in the
case of an unconditional notice of redemption, the
Company shall default in the payment of the Redemption
Price and accrued interest, if any) such Securities or
portions thereof, if interest-bearing, shall cease to
bear interest. Upon surrender of any such Security for
redemption in accordance with such notice, such Security
or portion thereof shall be paid by the Company at the
Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such
surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to
such Security; and provided, further, that except as
otherwise specified as contemplated by Section 301 with
respect to such Security, any installment of interest on
any Security the Stated Maturity of which installment is
on or prior to the Redemption Date shall be payable to
the Holder of such Security, or one or more Predecessor
Securities, registered as such at the close of business
on the related Regular Record Date according to the terms
of such Security and subject to the provisions of Section
307.
SECTION 406. Securities Redeemed in Part.
Upon the surrender of any Security which is to
be redeemed only in part at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly
authorized in writing), the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder
of such Security, without service charge, a new Security
or Securities of the same series, of any authorized
denomination requested by such Holder and of like tenor
and in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE FIVE
Sinking Funds
SECTION 501. Applicability of Article.
The provisions of this Article shall be
applicable to any sinking fund for the retirement of the
Securities of any series, except as otherwise specified
as contemplated by Section 301 for Securities of such
series.
The minimum amount of any sinking fund payment
provided for by the terms of Securities 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 Securities of any series is herein
referred to as an "optional sinking fund payment". If
provided for by the terms of Securities of any series,
the cash amount of any mandatory sinking fund payment may
be subject to reduction as provided in Section 502. Each
sinking fund payment shall be applied to the redemption
of Securities of the series in respect of which it was
made as provided for by the terms of such Securities.
SECTION 502. Satisfaction of Sinking Fund Payments with
Securities.
The Company (a) may deliver to the Trustee
Outstanding Securities (other than any previously called
for redemption) of a series in respect of which a
mandatory sinking fund payment is to be made and (b) may
apply as a credit Securities of such series which have
been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of such mandatory sinking
fund payment; provided, however, that no Securities shall
be applied in satisfaction of a mandatory sinking fund
payment if such Securities shall have been previously so
applied. Securities so applied shall be received and
credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be
reduced accordingly.
SECTION 503. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking
fund payment date for the Securities of any series, the
Company shall deliver to the Trustee an Officer's
Certificate specifying:
(a) the amount of the next succeeding
mandatory sinking fund payment for such series;
(b) the amount, if any, of the optional
sinking fund payment to be made together with such
mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate
sinking fund payment which is to be satisfied by the
payment of cash;
(e) the portion, if any, of such mandatory
sinking fund payment which is to be satisfied by
delivering and crediting Securities of such series
pursuant to Section 502 and stating the basis for
such credit and that such Securities have not
previously been so credited, and the Company shall
also deliver to the Trustee any Securities to be so
delivered. If the Company shall not deliver such
Officer's Certificate, the next mandatory sinking
fund payment for such series shall be made entirely
in cash in the amount of the mandatory sinking fund
payment. Not less than 30 days before each such
sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 403
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 404. Such
notice having been duly given, the redemption of
such Securities shall be made upon the terms and in
the manner stated in Sections 405 and 406.
ARTICLE SIX
Covenants
SECTION 601. Payment of Principal, Premium and Interest.
The Company shall pay the principal of and
premium, if any, and interest, if any (including
Additional Interest), on the Securities of each series in
accordance with the terms of such Securities and this
Indenture.
SECTION 602. Maintenance of Office or Agency.
The Company shall maintain in each Place of
Payment for the Securities of each series an office or
agency where payment of such Securities shall be made,
where the registration of transfer or exchange of such
Securities may be effected and where notices and demands
to or upon the Company in respect of such Securities and
this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and
any change in the location, of each such office or agency
and prompt notice to the Holders of any such change in
the manner specified in Section 106. If at any time the
Company shall fail to maintain any such required office
or agency in respect of Securities of any series, or
shall fail to furnish the Trustee with the address
thereof, payment of such Securities shall be made,
registration of transfer or exchange thereof may be
effected and notices and demands in respect thereof may
be served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent
for all such purposes in any such event.
The Company may also from time to time
designate one or more other offices or agencies with
respect to the Securities of one or more series, for any
or all of the foregoing purposes and may from time to
time rescind such designations; provided, however, that,
unless otherwise specified as contemplated by Section 301
with respect to the Securities of such series, no such
designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency
for such purposes in each Place of Payment for such
Securities in accordance with the requirements set forth
above. The Company shall give prompt written notice to
the Trustee, and prompt notice to the Holders in the
manner specified in Section 106, of any such designation
or rescission and of any change in the location of any
such other office or agency.
Anything herein to the contrary
notwithstanding, any office or agency required by this
Section may be maintained at an office of the Company, in
which event the Company shall perform all functions to be
performed at such office or agency.
SECTION 603. Money for Securities Payments to Be Held in
Trust.
If the Company shall at any time act as its own
Paying Agent with respect to the Securities of any
series, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any,
on any of such Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and premium or interest
so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided. The
Company shall promptly notify the Trustee of any failure
by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any,
or interest, if any, on such Securities.
Whenever the Company shall have one or more
Paying Agents for the Securities of any series, it shall,
on or before each due date of the principal of and
premium, if any, and interest, if any, on such
Securities, deposit with such Paying Agents sums
sufficient (without duplication) to pay the principal and
premium 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 shall promptly notify
the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for
the Securities of any series, other than the Company or
the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of this Section,
that such Paying Agent shall:
(a) hold all sums held by it for the payment
of the principal of and premium, if any, or
interest, if any, on such Securities in trust for
the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any failure by
the Company (or any other obligor upon such
Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such
Securities; and
(c) at any time during the continuance of any
failure referred to in the preceding paragraph (b),
upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such
Paying Agent and furnish to the Trustee such
information as it possesses regarding the names and
addresses of the Persons entitled to such sums.
The Company may at any time pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent,
such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by the Company or
such Paying Agent and, if so stated in a Company Order
delivered to the Trustee, in accordance with the
provisions of Article Seven; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for
the payment of the principal of and premium, if any, or
interest, if any, on any Security and remaining unclaimed
for two years after such principal and premium, if any,
or interest has become due and payable shall be paid to
the Company on Company Request, or, if then held by the
Company, shall be discharged from such trust; and, upon
such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a
Holder of an Outstanding Security, look only to the
Company for payment of the amount so due and payable and
remaining unpaid, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and
all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such
payment to the Company, may at the expense of the Company
cause to be mailed, on one occasion only, notice to such
Holder that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30
days from the date of such mailing, any unclaimed balance
of such money then remaining will be paid to the Company.
SECTION 604. Corporate Existence.
Subject to the rights of the Company under
Article Eleven, the Company shall do or cause to be done
all things necessary to preserve and keep in full force
and effect its corporate existence.
SECTION 605. Maintenance of Properties.
The Company shall cause (or, with respect to
property owned in common with others, make reasonable
effort to cause) all its properties used or useful in the
conduct of its business to be maintained and kept in good
condition, repair and working order and shall cause (or,
with respect to property owned in common with others,
make reasonable effort to cause) to be made all necessary
repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the
Company, may be necessary so that the business carried on
in connection therewith may be properly conducted;
provided, however, that nothing in this Section shall
prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any
of its properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its
business.
SECTION 606. Annual Officer's Certificate as to
Compliance.
Not later than June 30 in each year, commencing
June 30, 1997, the Company shall deliver to the Trustee
an Officer's Certificate which need not comply with
Section 102, executed by the principal executive officer,
the principal financial officer or the principal
accounting officer of the Company, as to such officer's
knowledge of the Company's compliance with all conditions
and covenants under this Indenture, such compliance to be
determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 607. Waiver of Certain Covenants.
The Company may omit in any particular instance
to comply with any term, provision or condition set forth
in (a) any covenant or restriction specified with respect
to the Securities of any series, as contemplated by
Section 301 as being subject to waiver pursuant to this
Section 607, if before the time for such compliance the
Holders of at least a majority in aggregate principal
amount of the Outstanding Securities of all series with
respect to which compliance with such covenant or
restriction is to be omitted, considered as one class,
shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance
with such term, provision or condition and (b) Section
604, 605 or Article Eleven if before the time for such
compliance the Holders of at least a majority in
principal amount of Securities Outstanding under this
Indenture shall, by Act of such Holders, either waive
such compliance in such instance or generally waive
compliance with such term, provision or condition; but,
in the case of (a) or (b), no such waiver shall extend to
or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and
effect; provided, however, so long as a Trust holds
Securities of any series, such Trust may not waive
compliance or waive any default in compliance by the
Company with any covenant or other term contained in this
Indenture or the Securities of such series without the
approval of the holders of at least a majority in
aggregate liquidation preference of the outstanding
Preferred Securities issued by such Trust affected,
obtained as provided in the Trust Agreement pertaining to
such Trust.
SECTION 608. Restriction on Payment of Dividends.
The Company shall not (a) declare or pay any
dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to,
any of the Company's capital stock, or (b) make any
payment of principal of or, interest or premium, if any,
on or repay or repurchase or redeem any debt securities
(including other Securities) that rank pari passu with or
junior in interest to the Securities or make any
guarantee payments with respect to the foregoing (other
than dividends or distributions in common stock of the
Company and payments under the Guarantee relating to any
Preferred Securities) if at such time (i) there shall
have occurred and be continuing a payment default
pursuant to Section 801(a) or 801(b) (whether before or
after expiration of any period of grace) or an Event of
Default hereunder, or (ii) the Company shall be in
default with respect to its payment or other obligations
under the Guarantee relating to such Preferred
Securities, or (iii) the Company shall have elected to
extend any interest payment period as provided in Section
311, and any such period, or any extension thereof, shall
be continuing.
SECTION 609. Maintenance of Trust Existence.
So long as Preferred Securities of any series
remain outstanding, the Company shall (a) maintain direct
or indirect ownership of all interests in the Trust which
issued such Preferred Securities, other than such
Preferred Securities, (b) not voluntarily (to the extent
permitted by law) dissolve, liquidate or wind up such
Trust, except in connection with a distribution of the
Securities to the holders of the Preferred Securities in
liquidation of such Trust, (c) remain the sole Depositor
under the Trust Agreement (the "Depositor") of such Trust
and timely perform in all material respects all of its
duties as Depositor of such Trust, and (d) use reasonable
efforts to cause such Trust to remain a business trust
and otherwise continue to be treated as a grantor trust
for Federal income tax purposes provided that any
permitted successor to the Company under this Indenture
may succeed to the Company's duties as Depositor of such
Trust; and provided further that the Company may permit
such Trust to consolidate or merge with or into another
business trust or other permitted successor under the
Trust Agreement pertaining to such Trust so long as the
Company agrees to comply with this Section 609 with
respect to such successor business trust or other
permitted successor.
SECTION 610. Rights of Holders of Preferred Securities.
The Company agrees that, for so long as any
Preferred Securities remain outstanding, its obligations
under this Indenture will also be for the benefit of the
holders from time to time of Preferred Securities, and
the Company acknowledges and agrees that if the Property
Trustee fails to enforce its rights with respect to the
Securities or the related Trust Agreement, a holder of
Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Property
Trustee's rights with respect to the Securities or such
Trust Agreement, to the fullest extent permitted by law,
without first instituting any legal proceeding against
the Property Trustee or any other person or entity.
ARTICLE SEVEN
Satisfaction and Discharge
SECTION 701. Satisfaction and Discharge of Securities.
Any Security or Securities, or any portion of
the principal amount thereof, shall be deemed to have
been paid for all purposes of this Indenture, and the
entire indebtedness of the Company in respect thereof
shall be deemed to have been satisfied and discharged, if
there shall have been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in
trust:
(a) money in an amount which shall be
sufficient, or
(b) in the case of a deposit made prior to the
Maturity of such Securities or portions thereof,
Government Obligations, which shall not contain
provisions permitting the redemption or other
prepayment thereof at the option of the issuer
thereof, the principal of and the interest on which
when due, without any regard to reinvestment
thereof, will provide moneys which, together with
the money, if any, deposited with or held by the
Trustee or such Paying Agent, shall be sufficient,
or
(c) a combination of (a) or (b) which shall be
sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such
Securities or portions thereof on or prior to Maturity;
provided, however, that in the case of the provision for
payment or redemption of less than all the Securities of
any series, such Securities or portions thereof shall
have been selected by the Security Registrar as provided
herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have
been given or irrevocable authority shall have been given
by the Company to the Trustee to give such notice, under
arrangements satisfactory to the Trustee; and provided,
further, that the Company shall have delivered to the
Trustee and such Paying Agent:
(x) if such deposit shall have been
made prior to the Maturity of such Securities,
a Company Order stating that the money and
Government Obligations deposited in accordance
with this Section shall be held in trust, as
provided in Section 703; and
(y) if Government Obligations shall
have been deposited, an Opinion of Counsel that
the obligations so deposited constitute
Government Obligations and do not contain
provisions permitting the redemption or other
prepayment at the option of the issuer thereof,
and an opinion of an independent public
accountant of nationally recognized standing,
selected by the Company, to the effect that the
requirements set forth in clause (b) above have
been satisfied; and
(z) if such deposit shall have been
made prior to the Maturity of such Securities,
an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's
Certificate, its indebtedness in respect of
such Securities or portions thereof will have
been satisfied and discharged as contemplated
in this Section.
Upon the deposit of money or Government Obli
gations, or both, in accordance with this Section,
together with the documents required by clauses (x), (y)
and (z) above, the Trustee shall, upon receipt of a
Company Request, acknowledge in writing that the Security
or Securities or portions thereof with respect to which
such deposit was made are deemed to have been paid for
all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof has been
satisfied and discharged as contemplated in this Section.
In the event that all of the conditions set forth in the
preceding paragraph shall have been satisfied in respect
of any Securities or portions thereof except that, for
any reason, the Officer's Certificate specified in clause
(z), if required, shall not have been delivered, such
Securities or portions thereof shall nevertheless be
deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions
thereof shall nevertheless be no longer entitled to the
benefits of this Indenture or of any of the covenants of
the Company under Article Six (except the covenants
contained in Sections 602 and 603) or any other covenants
made in respect of such Securities or portions thereof as
contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof
shall not be deemed to have been satisfied and discharged
prior to Maturity for any other purpose, and the Holders
of such Securities or portions thereof shall continue to
be entitled to look to the Company for payment of the
indebtedness represented thereby; and, upon Company
Request, the Trustee shall acknowledge in writing that
such Securities or portions thereof are deemed to have
been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all
of the Securities of any series is to be provided for in
the manner and with the effect provided in this Section,
the Security Registrar shall select such Securities, or
portions of principal amount thereof, in the manner
specified by Section 403 for selection for redemption of
less than all the Securities of a series.
In the event that Securities which shall be
deemed to have been paid for purposes of this Indenture,
and, if such is the case, in respect of which the
Company's indebtedness shall have been satisfied and
discharged, all as provided in this Section do not mature
and are not to be redeemed within the 60 day period
commencing with the date of the deposit of moneys or
Government Obligations, as aforesaid, the Company shall,
as promptly as practicable, give a notice, in the same
manner as a notice of redemption with respect to such
Securities, to the Holders of such Securities to the
effect that such deposit has been made and the effect
thereof.
Notwithstanding that any Securities shall be
deemed to have been paid for purposes of this Indenture,
as aforesaid, the obligations of the Company and the
Trustee in respect of such Securities under Sections 304,
305, 306, 404, 503 (as to notice of redemption), 602,
603, 907 and 915 and this Article Seven shall survive.
The Company shall pay, and shall indemnify the
Trustee or any Paying Agent with which Government
Obligations shall have been deposited as provided in this
Section against, any tax, fee or other charge imposed on
or assessed against such Government Obligations or the
principal or interest received in respect of such
Government Obligations, including, but not limited to,
any such tax payable by any entity deemed, for tax
purposes, to have been created as a result of such
deposit.
Anything herein to the contrary
notwithstanding, (a) if, at any time after a Security
would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's
indebtedness in respect thereof would be deemed to have
been satisfied or discharged, pursuant to this Section
(without regard to the provisions of this paragraph), the
Trustee or any Paying Agent, as the case may be, shall be
required to return the money or Government Obligations,
or combination thereof, deposited with it as aforesaid to
the Company or its representative under any applicable
Federal or State bankruptcy, insolvency or other similar
law, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction
and discharge of the Company's indebtedness in respect
thereof shall retroactively be deemed not to have been
effected, and such Security shall be deemed to remain
Outstanding and (b) any satisfaction and discharge of the
Company's indebtedness in respect of any Security shall
be subject to the provisions of the last paragraph of
Section 603.
SECTION 702. Satisfaction and Discharge of Indenture.
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) no Securities remain Outstanding
hereunder; and
(b) the Company has paid or caused to be paid
all other sums payable hereunder by the Company;
provided, however, that if, in accordance with the last
paragraph of Section 701, any Security, previously deemed
to have been paid for purposes of this Indenture, shall
be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to
have been satisfied and discharged, as aforesaid, and to
remain in full force and effect, and the Company shall
execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge
of this Indenture as aforesaid, the obligations of the
Company and the Trustee under Sections 304, 305, 306,
404, 503 (as to notice of redemption), 602, 603, 907 and
915 and this Article Seven 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 907, any and all money,
securities and other property then held by the Trustee
for the benefit of the Holders of the Securities other
than money and Government Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. Application of Trust Money.
Neither the Government Obligations nor the
money deposited pursuant to Section 701, nor the
principal or interest payments on any such Government
Obligations, shall be withdrawn or used for any purpose
other than, and shall be held in trust for, the payment
of the principal of and premium, if any, and interest, if
any, on the Securities or portions of principal amount
thereof in respect of which such deposit was made, all
subject, however, to the provisions of Section 603;
provided, however, that, so long as there shall not have
occurred and be continuing an Event of Default any cash
received from such principal or interest payments on such
Government Obligations, if not then needed for such pur
pose, shall, to the extent practicable, be invested upon
Company Request and upon receipt of the documents
referred to in clause (y) of Section 701 in Government
Obligations of the type described in clause (b) in the
first paragraph of Section 701 maturing at such times and
in such amounts as shall be sufficient together with any
other moneys and the principal of and interest on any
other Government Obligations then held by the Trustee to
pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such
Securities or portions thereof on and prior to the
Maturity thereof, and interest earned from such
reinvestment shall be paid over to the Company as
received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section
907; and provided, further, that, so long as there shall
not have occurred and be continuing an Event of Default,
any moneys held in accordance with this Section on the
Maturity of all such Securities in excess of the amount
required to pay the principal of and premium, if any, and
interest, if any, then due on such Securities shall be
paid over to the Company free and clear of any trust,
lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if
an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company
pursuant to this Section shall be held until such Event
of Default shall have been waived or cured.
ARTICLE EIGHT
Events of Default; Remedies
SECTION 801. Events of Default.
"Event of Default", wherever used herein with
respect to Securities of any series, means any one or
more of the following events which has occurred and is
continuing:
(a) failure to pay interest, if any, including
any Additional Interest, on any Security of such
series within 60 days after the same becomes due and
payable (whether or not payment is prohibited by the
provisions of Article Fifteen hereof); provided,
however, that a valid extension of the interest
payment period by the Company as contemplated in
Section 311 of this Indenture shall not constitute a
failure to pay interest for this purpose; or
(b) failure to pay the principal of or
premium, if any, on any Security of such series
(whether or not payment is prohibited by the
provisions of Article Fifteen hereof) when due and
payable; or
(c) failure to perform or breach of any
covenant or warranty of the Company in this
Indenture (other than a covenant or warranty a
default in the performance of which or breach of
which is elsewhere in this Section specifically
dealt with or which has expressly been included in
this Indenture solely for the benefit of one or more
series of Securities other than such series) for a
period of 60 days after there has been given, by
registered or certified mail, to the Company by the
Trustee, or to the Company and the Trustee by the
Holders of at least 33% in principal amount of the
Outstanding Securities of such series, 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, unless
the Trustee, or the Trustee and the Holders of a
principal amount of Securities of such series not
less than the principal amount of Securities the
Holders of which gave such notice, as the case may
be, shall agree in writing to an extension of such
period prior to its expiration; provided, however,
that the Trustee, or the Trustee and the Holders of
such principal amount of Securities of such series,
as the case may be, shall be deemed to have agreed
to an extension of such period if corrective action
is initiated by the Company within such period and
is being diligently pursued; or
(d) the entry by a court having jurisdiction
in the premises of (1) a decree or order for relief
in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other
similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons
other than the Company seeking reorganization,
arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal
or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any
substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any
such decree or order for relief or any such other
decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a
voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company
in a case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by
it to the filing of such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or
of any substantial part of its property, or the
making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its
inability to pay its debts generally as they become
due, or the authorization of such action by the
Board of Directors; or
(f) any other Event of Default specified with
respect to Securities of such series as contemplated
by Section 301.
SECTION 802. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default due to the default in
payment of principal of, or interest on, any series of
Securities or due to the default in the performance or
breach of any other covenant or warranty of the Company
applicable to the Securities of such series but not
applicable to all outstanding Securities shall have
occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal
of all Securities of such series and interest accrued
thereon to be due and payable immediately (provided that
the payment of principal and interest on such Securities
shall remain subordinated to the extent provided in
Article Fifteen hereof). If the Trustee or the Holders of
not less than 33% in principal amount of the Securities
of such series fail to make such declaration, and the
Preferred Securities issued by the Trust to which such
series of Securities relate are still outstanding, then
the holders of not less than 33% in aggregate liquidation
preference of such series of Preferred Securities may
make such declaration. If an Event of Default due to
default in the performance of any other of the covenants
or agreements herein applicable to all Outstanding
Securities or an Event of Default specified in Section
801(d) or (e) shall have occurred and be continuing,
either the Trustee or the Holders of not less than 33% in
principal amount of all Securities then Outstanding
(considered as one class), and not the Holders of the
Securities of any one of such series, may declare the
principal of all Securities and interest accrued thereon
to be due and payable immediately (provided that the
payment of principal and interest on such Securities
shall remain subordinated to the extent provided in the
Indenture).
At any time after such a declaration of
acceleration with respect to Securities of any series
shall have been made and before a judgment or decree for
payment of the money due shall have been obtained by the
Trustee as hereinafter in this Article provided, the
Event or Events of Default giving rise to such
declaration of acceleration shall, without further act,
be deemed to have been waived, and such declaration and
its consequences shall, without further act, be deemed to
have been rescinded and annulled, if
(a) the Company shall have paid or deposited
with the Trustee a sum sufficient to pay
(1) all overdue interest on all
Securities of such series;
(2) the principal of and premium, if
any, on any Securities of such series which
have become due otherwise than by such
declaration of acceleration and interest
thereon at the rate or rates prescribed
therefor in such Securities;
(3) to the extent that payment of
such interest is lawful, interest upon overdue
interest, if any, at the rate or rates
prescribed therefor in such Securities;
(4) all amounts due to the Trustee
under Section 907;
and
(b) any other Event or Events of Default with
respect to Securities of such series, other than the
non-payment of the principal of Securities of such
series which shall have become due solely by such
declaration of acceleration, shall have been cured
or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of
Default or impair any right consequent thereon.
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee.
If an Event of Default described in clause (a)
or (b) of Section 801 shall have occurred and be con
tinuing, the Company shall, upon demand of the Trustee,
pay to it, for the benefit of the Holders of the Securi
ties of the series with respect to which such Event of
Default shall have occurred, the whole amount then due
and payable on such Securities for principal and premium,
if any, and interest, if any, and, to the extent per
mitted by law, interest on premium, if any, and on any
overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to
cover any amounts due to the Trustee under Section 907.
If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name
and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company
or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.
If an Event of Default with respect to
Securities of any series shall have occurred and be
continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate
judicial proceedings as the Trustee shall deem most ef
fectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 804. Trustee May File Proofs of Claim.
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of
such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the
payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole
amount of principal, premium, if any, and interest,
if any, owing and unpaid in respect of the
Securities and to file such other papers or
documents as may be necessary or advisable in order
to have the claims of the Trustee (including any
claim for amounts due to the Trustee under Section
907) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims
and to distribute the same;
and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the
Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this
Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of
the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for
the ratable benefit of the Holders in respect of which
such judgment has been recovered.
SECTION 806. Application of Money Collected.
Subject to the provisions of Article Fifteen,
any money collected by the Trustee with respect to a
particular series of Securities pursuant to this Article
shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or
premium, if any, or interest, if any, upon presentation
of the Securities in respect of which or for the benefit
of which such money shall have been collected and the
notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
First: To the payment of all amounts due the
Trustee under Section 907;
Second: To the payment of the amounts then due
and unpaid upon the Securities for principal of and
premium, if any, and interest, if any, 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 Securities for principal,
premium, if any, and interest, if any, respectively;
and
Third: To the payment of the remainder, if
any, to the Company or to whomsoever may be lawfully
entitled to receive the same or as a court of
competent jurisdiction may direct.
SECTION 807. Limitation on Suits.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given
written notice to the Trustee of a continuing Event
of Default with respect to the Securities of such
series;
(b) the Holders of not less than a majority in
aggregate principal amount of the Outstanding
Securities of all series in respect of which an
Event of Default shall have occurred and be
continuing, considered as one class, shall have made
written request to the Trustee to institute
proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered
to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity shall
have failed to institute any such proceeding; and
(e) no direction inconsistent with such
written request shall have been given to the Trustee
during such 60-day period by the Holders of a
majority in aggregate principal amount of the
Outstanding Securities of all series in respect of
which an Event of Default shall have occurred and be
continuing, considered as one class;
it being understood and intended that no one or more of
such Holders shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of
any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 808. Unconditional Right of Holders to Receive
Principal,
Premium and Interest.
Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and
(subject to Section 307 and 311) interest, if any, on
such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemp
tion, on the Redemption Date) and to institute suit for
the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
Any holder of related Preferred Securities shall have the
right to institute suit for the enforcement of any such
payment to such holder with respect to Securities
relating to such Preferred Securities having a principal
amount equal to the aggregate liquidation preference
amount of the related Preferred Securities held by such
holder.
SECTION 809. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this
Indenture and such proceeding shall have been
discontinued or abandoned for any reason, or shall have
been determined adversely to the Trustee or to such
Holder, then and in every such case, subject to any
determination in such proceeding, the Company, and
Trustee and such Holder shall be restored severally and
respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and
such Holder shall continue as though no such proceeding
had been instituted.
SECTION 810. Rights and Remedies Cumulative.
Except as otherwise provided in the last
paragraph of Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 811. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any
Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Holders, as
the case may be.
SECTION 812. Control by Holders of Securities.
If an Event of Default shall have occurred and
be continuing in respect of a series of Securities, the
Holders of a majority in principal amount of the
Outstanding Securities of such series shall have the
right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series;
provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one
series of Securities, the Holders of a majority in
aggregate principal amount of the Outstanding Securities
of all such series, considered as one class, shall have
the right to make such direction, and not the Holders of
the Securities of any one of such series; and provided,
further, that
(a) such direction shall not be in conflict
with any rule of law or with this Indenture, and
could not involve the Trustee in personal liability
in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate; and
(b) the Trustee may take any other action
deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 813. Waiver of Past Defaults.
The Holders of not less than a majority in
principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities
of such series waive any past default hereunder with
respect to such series and its consequences, except a
default
(a) in the payment of the principal of or
premium, if any, or interest, if any, on any
Security of such series, or
(b) in respect of a covenant or provision
hereof which under Section 1202 cannot be modified
or amended without the consent of the Holder of each
Outstanding Security of such series affected;
provided, however, that so long as a Trust holds the
Securities of any series, such Trust may not waive any
past default without the consent of at least a majority
in aggregate liquidation preference of the outstanding
Preferred Securities issued by such Trust affected,
obtained as provided in the Trust Agreement pertaining to
such Trust.
Upon any such waiver, such default shall cease
to exist, and any and all Events of Default arising
therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 814. Undertaking for Costs.
The Company and the Trustee agree, and each
Holder by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for
any action taken, suffered 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 Company, to any
suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate
more than 10% in aggregate principal amount of the
Outstanding Securities of all series in respect of which
such suit may be brought, considered as one class, or to
any suit instituted by any Holder for the enforcement of
the payment of the principal of or premium, if any, or
interest, if any, on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 815. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it
may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had
been enacted.
ARTICLE NINE
The Trustee
SECTION 901. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event
of Default with respect to Securities of any series,
(1) the Trustee undertakes to
perform, with respect to Securities of such
series, such duties and only such duties as are
specifically set forth in this Indenture, and
no implied covenants or obligations shall be
read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on
its part, the Trustee may, with respect to
Securities of such series, conclusively rely,
as to the truth of the statements and the
correctness of the opinions expressed therein,
upon certificates or opinions furnished to the
Trustee and conforming to the requirements of
this Indenture; but in the case of any such
certificates or opinions which by any 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).
(b) In case an Event of Default with respect
to Securities of any series shall have occurred and
be continuing, the Trustee shall exercise, with
respect to Securities of such 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 man would exercise or use
under the circumstances in the conduct of his own
affairs.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this subsection shall not be
construed to limit the effect of subsection (a)
of this Section;
(2) the Trustee shall not be liable
for any error of judgment made in good faith by
a Responsible Officer, unless it shall be
proved that the Trustee was negligent in
ascertaining the pertinent facts;
(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 a majority in
principal amount of the Outstanding Securities
of any one or more series, as provided herein,
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
Securities of such series; and
(4) no provision of this Indenture
shall require the Trustee to expend or risk its
own funds or otherwise incur any financial
liability in the performance of any of its
duties hereunder, or in the exercise of any of
its rights or powers, if it 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.
(d) Whether or not therein expressly so
provided, every provision of this Indenture relating
to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject
to the provisions of this Section.
SECTION 902. Notice of Defaults.
The Trustee shall give notice of any default
hereunder with respect to the Securities of any series to
the Holders of Securities of such series in the manner
and to the extent required to do so by the Trust
Indenture Act, unless such default shall have been cured
or waived; provided, however, that in the case of any
default of the character specified in Section 801(c), no
such notice to Holders shall be given until at least 75
days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which
is, or after notice or lapse of time, or both, would
become, an Event of Default.
SECTION 903. Certain Rights of Trustee.
Subject to the provisions of Section 901 and to
the applicable provisions of the Trust Indenture Act:
(a) the Trustee may conclusively rely and
shall be protected in acting or refraining from
acting in good faith 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 or presented by
the proper party or parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by
a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the
Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an
Officer's Certificate;
(d) the Trustee may consult with counsel of
its selection and the written advice of such counsel
or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(e) the Trustee shall be under no obligation
to exercise any of the rights or powers vested in it
by this Indenture at the request or direction of any
Holder pursuant to this Indenture, unless such
Holder shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses
and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or
investigation, it shall (subject to applicable legal
requirements) be entitled to examine, during normal
business hours, the books, records and premises of
the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys
and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
and
(h) the Trustee shall not be charged with
knowledge of any Event of Default with respect to
the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer
of the Trustee shall have actual knowledge of the
Event of Default or (2) written notice of such Event
of Default shall have been given to the Trustee by
the Company, any other obligor on such Securities or
by any Holder of such Securities.
SECTION 904. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the
Securities (except the Trustee's certificates of
authentication) shall be taken as the statements of the
Company, and neither the Trustee nor any Authenticating
Agent assumes responsibility for their correctness. The
Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 905. May Hold Securities.
Each of the Trustee, any Authenticating Agent,
any Paying Agent, any Security Registrar or any other
agent of the Company or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it
would have if it were not the Trustee, Authenticating
Agent, Paying Agent, Security Registrar or such other
agent.
SECTION 906. Money Held in Trust.
Money held by the Trustee in trust hereunder
need not be segregated from other funds, except to the
extent required by law. The Trustee shall be under no
liability for interest on or investment of any moneys
received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit
of, the Company.
SECTION 907. Compensation and Reimbursement.
The Company shall
(a) pay to the Trustee from time to time
reasonable compensation for all services rendered by
it hereunder (which compensation shall not be
limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided
herein, reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances
reasonably incurred or made by the Trustee in
accordance with any provision of this Indenture
(including the reasonable compensation and the
expenses and disbursements of its agents and
counsel), except to the extent that any such
expense, disbursement or advance may be attributable
to its negligence, wilful misconduct or bad faith;
and
(c) indemnify the Trustee for, and hold it
harmless from and against, any loss, liability or
expense reasonably incurred by it arising out of or
in connection with the acceptance or administration
of the trust or trusts hereunder or the performance
of its duties hereunder, including the reasonable
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, except to the extent any such loss,
liability or expense may be attributable to its
negligence, wilful misconduct or bad faith.
As security for the performance of the
obligations of the Company under this Section, the
Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee
as such other than property and funds held in trust under
Section 703 (except as otherwise provided in Section
703). "Trustee" for purposes of this Section shall
include any predecessor Trustee; provided, however, that
the negligence, wilful misconduct or bad faith of any
Trustee hereunder shall not affect the rights of any
other Trustee hereunder.
SECTION 908. Disqualification; Conflicting Interests.
If the Trustee shall have or acquire any
conflicting interest within the meaning of the Trust
Indenture Act, it shall either eliminate such conflicting
interest or resign to the extent, in the manner and with
the effect, and subject to the conditions, provided in
the Trust Indenture Act and this Indenture. For purposes
of Section 310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee, in its
capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting
interest arising from its capacity as trustee in respect
of the Securities of any other series. The Trust
Agreement and the Guarantee Agreement pertaining to each
Trust shall be deemed to be specifically described in
this Indenture for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 909. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder
which shall be
(a) a corporation organized and doing business
under the laws of the United States, any State or
Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, or
(b) if and to the extent permitted by the
Commission by rule, regulation or order upon
application, a corporation or other Person organized
and doing business under the laws of a foreign
government, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and
subject to supervision or examination by authority of
such foreign government or a political subdivision
thereof substantially equivalent to supervision or
examination applicable to United States institutional
trustees,
and, in either case, qualified and eligible under this
Article and the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of such 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 condi
tion so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
SECTION 910. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee
and no appointment of a successor Trustee pursuant to
this Article shall become effective until the
acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of
Section 911.
(b) The Trustee may resign at any time with
respect to the Securities of one or more series by
giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee
required by Section 911 shall not have been delivered
to the Trustee within 30 days after the giving 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
the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the
Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to
the Trustee and to the Company; provided that so long
as any Preferred Securities remain outstanding, the
Trust which issued such Preferred Securities shall
not execute any Act to remove the Trustee without the
consent of the holders of a majority in aggregate
liquidation preference of Preferred Securities issued
by such Trust outstanding, obtained as provided in
the Trust Agreement pertaining to such Trust.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 908 after written request therefor by the
Company or by any Holder who has been a bona fide
Holder for at least six months, or
(2) the Trustee shall cease to be
eligible under Section 909 and shall fail to resign
after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take
charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (x) the Company by a Board
Resolution may remove the Trustee with respect to all
Securities or (y) subject to Section 814, any Holder who
has been a bona fide Holder for at least six months may,
on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause (other
than as contemplated in clause (y) in subsection (d)
of this Section), with respect to the Securities of
one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of
that or those series (it being understood that any
such successor Trustee may be appointed with respect
to the Securities of one or more or all of such
series and that at any time there shall be only one
Trustee with respect to the Securities of any
particular series) and shall comply with the
applicable requirements of Section 911. If, within
one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of
any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of
such appointment in accordance with the applicable
requirements of Section 911, become the successor
Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee ap
pointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have
been so appointed by the Company or the Holders and
accepted appointment in the manner required by
Section 911, any Holder who has been a bona fide
Holder of a Security of such series for at least six
months may, on behalf of itself and all others
similarly situated, petition any court of competent
jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such
series.
(f) So long as no event which is, or after
notice or lapse of time, or both, would become, an
Event of Default shall have occurred and be
continuing, and except with respect to a Trustee
appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the
Company shall have delivered to the Trustee (i) a
Board Resolution appointing a successor Trustee,
effective as of a date specified therein, and (ii) an
instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee
in accordance with Section 911, the Trustee shall be
deemed to have resigned as contemplated in subsection
(b) of this Section, the successor Trustee shall be
deemed to have been appointed by the Company pursuant
to subsection (e) of this Section and such
appointment shall be deemed to have been accepted as
contemplated in Section 911, all as of such date, and
all other provisions of this Section and Section 911
shall be applicable to such resignation, appointment
and acceptance except to the extent inconsistent with
this subsection (f).
(g) The Company shall give notice of each
resignation and each removal of the Trustee with
respect to the Securities of any series and each
appointment of a successor Trustee with respect to
the Securities of any series by mailing written
notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series
as their names and addresses appear in the Security
Register. Each notice shall include the name of the
successor Trustee with respect to the Securities of
such series and the address of its corporate trust
office.
SECTION 911. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of
all series, 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 all sums owed to it, execute
and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts
of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of
one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such
appointment and which (1) shall contain such
provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the
Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if
the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of
that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be
necessary to provide for or facilitate the
administration of the trusts hereunder by more than
one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the
extent provided therein and each such successor
Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to
which the appointment of such successor Trustee
relates; but, on request of the Company or any succes
sor Trustee, such retiring Trustee, upon payment of
all sums owed to it, shall duly assign, transfer and
deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to
which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee,
the Company shall execute any instruments which fully
vest in and confirm to such successor Trustee all
such rights, powers and trusts referred to in
subsection (a) or (b) of this Section, as the case
may be.
(d) No successor Trustee shall accept its
appointment unless at the time of such acceptance
such successor Trustee shall be qualified and
eligible under this Article.
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all
the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of
any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so
authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 913. Preferential Collection of Claims Against
Company.
If the Trustee shall be or become a creditor of
the Company or any other obligor upon the Securities
(other than by reason of a relationship described in
Section 311(b) of the Trust Indenture Act), the Trustee
shall be subject to any and all applicable provisions of
the Trust Indenture Act regarding the collection of
claims against the Company or such other obligor. For
purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any
transaction in which full payment for goods or
securities sold is made within seven days after
delivery of the goods or securities in currency or
in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means
any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing
the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise
previously constituting the security, provided the
security is received by the Trustee simultaneously
with the creation of the creditor relationship with
the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
SECTION 914. Co-trustees and Separate Trustees.
At any time or times, for the purpose of
meeting the legal requirements of any applicable
jurisdiction, the Company and the Trustee shall have
power to appoint, and, upon the written request of the
Trustee or of the Holders of at least 33% in principal
amount of the Securities then Outstanding, the Company
shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons
approved by the Trustee either to act as co-trustee,
jointly with the Trustee, or to act as separate trustee,
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 Company
does not join in such appointment within 15 days after
the receipt by it of a request so to do, or if an Event
of Default shall have occurred and be continuing, the
Trustee alone shall have power to make such appointment.
Should any written instrument or instruments
from the Company be required by any co-trustee or
separate trustee so appointed to more fully confirm 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
Company.
Every co-trustee or separate trustee shall, to
the extent permitted by law, but to such extent only, be
appointed subject to the following conditions:
(a) the Securities shall be authenticated 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
Trustee hereunder, shall be exercised solely, by the
Trustee;
(b) the rights, powers, duties and obligations
hereby conferred or imposed upon the Trustee in
respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or
performed either by the Trustee or by the 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 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 Trustee at any time, by an instrument
in writing executed by it, with the concurrence of
the Company, may accept the resignation of or remove
any co-trustee or separate trustee appointed under
this Section, and, if an Event of Default shall have
occurred and be continuing, the Trustee shall have
power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the
concurrence of the Company. Upon the written
request of the Trustee, the Company shall join with
the Trustee in the execution and delivery 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;
(d) no co-trustee or separate trustee
hereunder shall be personally liable by reason of
any act or omission of the Trustee, or any other
such trustee hereunder; and
(e) any Act of Holders delivered to the
Trustee shall be deemed to have been delivered to
each such co-trustee and separate trustee.
SECTION 915. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent
or Agents with respect to the Securities of one or more
series, which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued
upon original issuance and upon exchange, registration of
transfer or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to
the Company and shall at all times be a corporation
organized and doing business under the laws of the United
States, any State or territory thereof or the District of
Columbia or the Commonwealth of Puerto Rico, authorized
under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining
authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so pub
lished. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating
Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall
be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time
by giving written notice thereof to the Trustee and to the
Company. The Trustee may at any time terminate the agency
of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable
to the Company. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authen
ticating Agent shall be appointed unless eligible under
the provisions of this Section.
The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its
services under this Section.
The provisions of Sections 308, 904 and 905
shall be applicable to each Authenticating Agent.
If an appointment with respect to the Securities
of one or more series shall be made pursuant to this
Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication
substantially in the following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
Dated: ________________________
As Trustee
By_____________________
As Authenticating Agent
By_____________________
Authorized Signatory
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not
have an office capable of authenticating Securities upon
original issuance located in a Place of Payment where the
Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so
requested by the Company in writing (which writing need
not comply with Section 102 and need not be accompanied by
an Opinion of Counsel), shall appoint, in accordance with
this Section and in accordance with such procedures as
shall be acceptable to the Trustee, an Authenticating
Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
ARTICLE TEN
Holders' Lists and Reports by Trustee and Company
SECTION 1001. Lists of Holders.
Semiannually, not later than December 31 and
June 30 in each year, commencing June 30, 1997, and at
such other times as the Trustee may request in writing,
the Company shall furnish or cause to be furnished to the
Trustee information as to the names and addresses of the
Holders, and the Trustee shall preserve such information
and similar information received by it in any other
capacity and afford to the Holders access to information
so preserved by it, all to such extent, if any, and in
such manner as shall be required by the Trust Indenture
Act; provided, however, that no such list need be
furnished so long as the Trustee shall be the Security
Registrar.
SECTION 1002. Reports by Trustee and Company.
Not later than June 30 in each year, commencing
June 30, 1997, the Trustee shall transmit to the Holders
and the Commission a report, dated as of the next
preceding April 30, with respect to any events and other
matters described in Section 313(a) of the Trust Indenture
Act, in such manner and to the extent required by the
Trust Indenture Act. The Trustee shall transmit to the
Holders and the Commission, and the Company shall file
with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and
furnished to the Trustee) and transmit to the Holders,
such other information, reports and other documents, if
any, at such times and in such manner, as shall be
required by the Trust Indenture Act.
To the extent required by the Trust Indenture
Act, the Company shall file with the Trustee the following
documents and reports within 30 days after such documents
or reports (or consolidated documents or reports
containing such documents or reports) are filed with the
Commission:
(a) The Company's annual reports on Form 10-K;
(b) The Company's quarterly reports on Form 10-Q;
(c) The Company's current reports on Form 8-K; and
(d) Any other documents filed with the
Commission which are filed with or incorporated
by reference in the foregoing reports, related
to the Company, and have not previously been
filed with the Trustee.
To the extent that any of the foregoing documents or
reports are consolidated with similar documents or reports
filed by an affiliate, the Company may file such
consolidated document or report with the Trustee in lieu
of the separate document or report.
ARTICLE ELEVEN
Consolidation, Merger, Conveyance or Other Transfer
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge
into any other corporation, or convey or otherwise
transfer or lease its properties and assets substantially
as an entirety to any Person, unless
(a) the corporation formed by such
consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Com
pany substantially as an entirety shall be a Person
organized and validly existing under the laws of the
United States, any State thereof or the District of
Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of and premium,
if any, and interest, if any, on all Outstanding
Securities and the performance of every covenant of
this Indenture on the part of the Company to be per
formed or observed;
(b) immediately after giving effect to such
transaction and treating any indebtedness for
borrowed money which becomes an obligation of the
Company as a result of such transaction as having
been incurred by the Company at the time of such
transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be
continuing; and
(c) the Company shall have delivered to the
Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation,
merger, conveyance, or other transfer or lease and
such supplemental indenture comply with this Article
and that all conditions precedent herein provided for
relating to such transactions have been complied
with.
SECTION 1102. Successor Corporation Substituted.
Upon any consolidation by the Company with or
merger by the Company into any other corporation or any
conveyance, or other transfer or lease of the properties
and assets of the Company substantially as an entirety in
accordance with Section 1101, the successor corporation
formed by such consolidation or into which the Company is
merged or the Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company
under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants
under this Indenture and the Securities Outstanding
hereunder.
ARTICLE TWELVE
Supplemental Indentures
SECTION 1201. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company
and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following
purposes:
(a) to evidence the succession of another
Person to the Company and the assumption by any such
successor of the covenants of the Company herein and
in the Securities, all as provided in Article Eleven;
or
(b) to add one or more covenants of the Company
or other provisions for the benefit of all Holders or
for the benefit of the Holders of, or to remain in
effect only so long as there shall be Outstanding,
Securities of one or more specified series, or to
surrender any right or power herein conferred upon
the Company; or
(c) to add any additional Events of Default
with respect to all or any series of Securities
Outstanding hereunder; or
(d) to change or eliminate any provision of
this Indenture or to add any new provision to this
Indenture; provided, however, that if such change,
elimination or addition shall adversely affect the
interests of the Holders of Securities of any series
Outstanding on the date of such indenture
supplemental hereto in any material respect, such
change, elimination or addition shall become
effective with respect to such series only pursuant
to the provisions of Section 1202 hereof or when no
Security of such series remains Outstanding; or
(e) to provide collateral security for the
Securities; or
(f) to establish the form or terms of
Securities of any series as contemplated by Sections
201 and 301; or
(g) to provide for the authentication and
delivery of bearer securities and coupons
appertaining thereto representing interest, if any,
thereon and for the procedures for the registration,
exchange and replacement thereof and for the giving
of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all
other matters incidental thereto; or
(h) to evidence and provide for the acceptance
of appointment hereunder by a separate or successor
Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the
requirements of Section 911(b); or
(i) to provide for the procedures required to
permit the Company to utilize, at its option, a non-
certificated system of registration for all, or any
series of, the Securities; or
(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if
any, on all or any series of Securities shall be
payable, (2) all or any series of Securities may be
surrendered for registration of transfer, (3) all or
any series of Securities may be surrendered for
exchange and (4) notices and demands to or upon the
Company in respect of all or any series of Securities
and this Indenture may be served; or
(k) to cure any ambiguity, to correct or
supplement any provision herein which may be
defective or inconsistent with any other provision
herein, or to make any other changes to the
provisions hereof or to add other provisions with
respect to matters or questions arising under this
Indenture, provided that such other changes or
additions shall not adversely affect the interests of
the Holders of Securities of any series in any
material respect.
Without limiting the generality of the
foregoing, if the Trust Indenture Act as in effect at the
date of the execution and delivery of this Indenture or at
any time thereafter shall be amended and
(x) if any such amendment shall
require one or more changes to any provisions
hereof or the inclusion herein of any additional
provisions, or shall by operation of law be
deemed to effect such changes or incorporate
such provisions by reference or otherwise, this
Indenture shall be deemed to have been amended
so as to conform to such amendment to the Trust
Indenture Act, and the Company and the Trustee
may, without the consent of any Holders, enter
into an indenture supplemental hereto to effect
or evidence such changes or additional
provisions; or
(y) if any such amendment shall
permit one or more changes to, or the
elimination of, any provisions hereof which, at
the date of the execution and delivery hereof or
at any time thereafter, are required by the
Trust Indenture Act to be contained herein, this
Indenture shall be deemed to have been amended
to effect such changes or elimination, and the
Company and the Trustee may, without the consent
of any Holders, enter into an indenture
supplemental hereto to evidence such amendment
hereof.
SECTION 1202. Supplemental Indentures With Consent of
Holders.
With the consent of the Holders of not less than
a majority in aggregate principal amount of the Securities
of all series then Outstanding under this Indenture,
considered as one class, by Act of said Holders delivered
to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of,
this Indenture or modifying in any manner the rights of
the Holders of Securities of such series under the
Indenture; provided, however, that if there shall be
Securities of more than one series Outstanding hereunder
and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or
more, but less than all, of such series, then the consent
only of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series so
directly affected, considered as one class, shall be
required; and provided, further, that no such supplemental
indenture shall:
(a) change the Stated Maturity of the principal
of, or any installment of principal of or interest on
(except as provided in Section 311 hereof), any
Security, or reduce the principal amount thereof or
the rate of interest thereon (or the amount of any
installment of interest thereon) or change the method
of calculating such rate or reduce any premium
payable upon the redemption thereof, or change the
coin or currency (or other property), in which any
Security or any premium or the interest thereon is
payable, or impair the right to institute suit for
the enforcement of any such payment on or after the
Stated Maturity of any Security (or, in the case of
redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder
of such Security, or
(b) reduce the percentage in principal amount
of the Outstanding Securities of any series (or, if
applicable, in liquidation preference of any series
of Preferred Securities), the consent of the Holders
of which is required for any such supplemental in
denture, or the consent of the Holders of which is
required for any waiver of compliance with any
provision of this Indenture or of any default
hereunder and its consequences, or reduce the
requirements of Section 1304 for quorum or voting,
without, in any such case, the consent of the Holders
of each Outstanding Security of such series, or
(c) modify any of the provisions of this
Section, Section 607 or Section 813 with respect to
the Securities of any series, except to increase the
percentages in principal amount referred to in this
Section or such other Sections or to provide that
other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, how
ever, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this pro
viso, in accordance with the requirements of Sections
911(b) and 1201(h).
Notwithstanding the foregoing, so long as any of the
Preferred Securities remain outstanding, the Trustee may
not consent to a supplemental indenture under this Section
1202 without the prior consent, obtained as provided in a
Trust Agreement pertaining to a Trust which issued such
Preferred Securities, of the holders of not less than a
majority in aggregate liquidation preference of all
Preferred Securities issued by such Trust affected,
considered as one class, or, in the case of changes
described in clauses (a), (b) and (c) above, 100% in
aggregate liquidation preference of all such Preferred
Securities then outstanding which would be affected
thereby, considered as one class. A supplemental
indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular
series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of
Securities of any other series.
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance
thereof. A waiver by a Holder of such Holder's right to
consent under this Section shall be deemed to be a consent
of such Holder.
SECTION 1203. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 901) shall be fully
protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own
rights, duties, immunities or liabilities under this
Indenture or otherwise.
SECTION 1204. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound
thereby. Any supplemental indenture permitted by this
Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such
restatement shall supersede this Indenture as theretofore
in effect for all purposes.
SECTION 1205. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant
to this Article shall conform to the requirements of the
Trust Indenture Act as then in effect.
SECTION 1206. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and
delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved
by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to
any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such
series.
SECTION 1207. Modification Without Supplemental
Indenture.
If the terms of any particular series of
Securities shall have been established in a Board
Resolution or an Officer's Certificate pursuant to a Board
Resolution as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or
the elimination of any of such terms may be effected by
means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and
accepted by, the Trustee; provided, however, that such
supplemental Board Resolution or Officer's Certificate
shall not be accepted by the Trustee or otherwise be
effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately
satisfied. Upon the acceptance thereof by the Trustee,
any such supplemental Board Resolution or Officer's
Certificate shall be deemed to be a "supplemental
indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
Meetings of Holders; Action Without Meeting
SECTION 1301. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of one or
more, or all, series may be called at any time and from
time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1302. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting
of Holders of Securities of one or more, or all,
series for any purpose specified in Section 1301, to
be held at such time and at such place in the Borough
of Manhattan, The City of New York, as the Trustee
shall determine, or, with the approval of the
Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such
meeting and in general terms the action proposed to
be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor
more than 180 days prior to the date fixed for the
meeting.
(b) If the Trustee shall have been requested to
call a meeting of the Holders of Securities of one or
more, or all, series by the Company or by the Holders
of 33% in aggregate principal amount of all of such
series, considered as one class, for any purpose
specified in Section 1301, by written request setting
forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 21 days after
receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided
herein, then the Company or the Holders of Securities
of such series in the amount above specified, as the
case may be, may determine the time and the place in
the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved
by the Company, for such meeting and may call such
meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one
or more, or all, series shall be valid without notice
if the Holders of all Outstanding Securities of such
series are present in person or by proxy and if rep
resentatives of the Company and the Trustee are
present, or if notice is waived in writing before or
after the meeting by the Holders of all Outstanding
Securities of such series, or by such of them as are
not present at the meeting in person or by proxy, and
by the Company and the Trustee.
SECTION 1303. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders
of Securities of one or more, or all, series a Person
shall be (a) a Holder of one or more Outstanding
Securities of such series, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled
to attend any meeting of Holders of Securities of any
series shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. Quorum; Action.
The Persons entitled to vote a majority in
aggregate principal amount of the Outstanding Securities
of the series with respect to which a meeting shall have
been called as hereinbefore provided, considered as one
class, shall constitute a quorum for a meeting of Holders
of Securities of such series; provided, however, that if
any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders
of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Securities of such
series, considered as one class, the Persons entitled to
vote such specified percentage in principal amount of the
Outstanding Securities of such series, considered as one
class, shall constitute a quorum. In the absence of a
quorum within one hour of the time appointed for any such
meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In
any other case the meeting may be adjourned for such
period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for such period as may be
determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Except as provided
by Section 1305(e), notice of the reconvening of any
meeting adjourned for more than 30 days shall be given as
provided in Section 1302(a) not less than 10 days prior to
the date on which the meeting is scheduled to be recon
vened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Securities of
such series which shall constitute a quorum.
Except as limited by Section 1202, any
resolution presented to a meeting or adjourned meeting
duly reconvened at which a quorum is present as aforesaid
may be adopted only by the affirmative vote of the Holders
of a majority in aggregate principal amount of the
Outstanding Securities of the series with respect to which
such meeting shall have been called, considered as one
class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture
expressly provides may be taken by the Holders of a
specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such
series, considered as one class, may be adopted at a
meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid by the affirmative
vote of the Holders of such specified percentage in
principal amount of the Outstanding Securities of such
series, considered as one class.
Any resolution passed or decision taken at any
meeting of Holders of Securities duly held in accordance
with this Section shall be binding on all the Holders of
Securities of the series with respect to which such
meeting shall have been held, whether or not present or
represented at the meeting.
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights;
Conduct and Adjournment of Meetings.
(a) Attendance at meetings of Holders of
Securities may be in person or by proxy; and, to the
extent permitted by law, any such proxy shall remain
in effect and be binding upon any future Holder of
the Securities with respect to which it was given
unless and until specifically revoked by the Holder
or future Holder (except as provided in Section
104(g)), of such Securities before being voted.
(b) Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting
of Holders of Securities in regard to proof of the
holding of such Securities and of the appointment of
proxies and in regard to the appointment and duties
of inspectors of votes, the submission and
examination of proxies, certificates and other
evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall
deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of
Securities shall be proved in the manner specified in
Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104. Such
regulations may provide that written instruments
appointing proxies, regular on their face, may be
presumed valid and genuine without the proof
specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in
writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the
Company or by Holders as provided in Section 1302(b),
in which case the Company or the Holders of
Securities of the series calling the meeting, as the
case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of all
series represented at the meeting, considered as one
class.
(d) At any meeting each Holder or proxy shall
be entitled to one vote for each $1 principal amount
of Securities held or represented by him; provided,
however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a
Security or proxy.
(e) Any meeting duly called pursuant to Section
1302 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a
majority in aggregate principal amount of the
Outstanding Securities of all series represented at
the meeting, considered as one class; and the meeting
may be held as so adjourned without further notice.
SECTION 1306. Counting Votes and Recording Action of
Meetings.
The vote upon any resolution submitted to any
meeting of Holders shall be by written ballots on which
shall be subscribed the signatures of the Holders or of
their representatives by proxy and the principal amounts
and serial numbers of the Outstanding Securities, of the
series with respect to which the meeting shall have been
called, held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with
the secretary of the meeting their verified written
reports of all votes cast at the meeting. A record of the
proceedings of each meeting of Holders shall be prepared
by the secretary of the meeting and there shall be
attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided
in Section 1302 and, if applicable, Section 1304. Each
copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one
such copy shall be delivered to the Company, and another
to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
SECTION 1307. Action Without Meeting.
In lieu of a vote of Holders at a meeting as
hereinbefore contemplated in this Article, any request, de
mand, authorization, direction, notice, consent, waiver or
other action may be made, given or taken by Holders by
written instruments as provided in Section 104.
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Dire
ctors
SECTION 1401. Liability Solely Corporate.
No recourse shall be had for the payment of the
principal of or premium, if any, or interest, if any, on
any Securities, or any part thereof, or for any claim
based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation,
covenant or agreement under this Indenture, against any
incorporator, stockholder, officer or director, as such,
past, present or future of the Company or of any
predecessor or successor corporation (either directly or
through the Company or a predecessor or successor
corporation), whether by virtue of any constitutional pro
vision, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly
agreed and understood that this Indenture and all the
Securities are solely corporate obligations, and that no
personal liability whatsoever shall attach to, or be
incurred by, any incorporator, stockholder, officer or
director, past, present or future, of the Company or of
any predecessor or successor corporation, either directly
or indirectly through the Company or any predecessor or
successor corporation, because of the indebtedness hereby
authorized or under or by reason of any of the
obligations, covenants or agreements contained in this
Indenture or in any of the Securities or to be implied
herefrom or therefrom, and that any such personal
liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the
Securities.
ARTICLE FIFTEEN
Subordination of Securities
SECTION 1501. Securities Subordinate to Senior
Indebtedness.
The Company, for itself, its successors and
assigns, covenants and agrees, and each Holder of the
Securities of each series, by its acceptance thereof,
likewise covenants and agrees, that the payment of the
principal of and premium, if any, and interest, if any, on
each and all of the Securities is hereby expressly
subordinated and subject to the extent and in the manner
set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness.
Each Holder of the Securities of each series, by
its acceptance thereof, authorizes and directs the Trustee
on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in
this Article, and appoints the Trustee its attorney-in-
fact for any and all such purposes.
SECTION 1502. Payment Over of Proceeds of Securities.
In the event (a) of any insolvency or bankruptcy
proceedings or any receivership, liquidation,
reorganization or other similar proceedings in respect of
the Company or a substantial part of its property, or of
any proceedings for liquidation, dissolution or other
winding up of the Company, whether or not involving
insolvency or bankruptcy, or (b) subject to the provisions
of Section 1503, that (i) a default shall have occurred
with respect to the payment of principal of or interest on
or other monetary amounts due and payable on any Senior
Indebtedness, or (ii) there shall have occurred a default
(other than a default in the payment of principal or
interest or other monetary amounts due and payable) in
respect of any Senior Indebtedness, as defined therein or
in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the
maturity thereof (with notice or lapse of time, or both),
and such default shall have continued beyond the period of
grace, if any, in respect thereof, and, in the cases of
subclauses (i) and (ii) of this clause (b), such default
shall not have been cured or waived or shall not have
ceased to exist, or (c) that the principal of and accrued
interest on the Securities of any series shall have been
declared due and payable pursuant to Section 801 and such
declaration shall not have been rescinded and annulled as
provided in Section 802, then:
(1) the holders of all Senior
Indebtedness shall first be entitled to
receive payment of the full amount due
thereon, or provision shall be made for
such payment in money or money's worth,
before the Holders of any of the Securities
are entitled to receive a payment on
account of the principal of or interest on
the indebtedness evidenced by the
Securities, including, without limitation,
any payments made pursuant to Articles Four
and Five;
(2) any payment by, or distribution
of assets of, the Company of any kind or
character, whether in cash, property or
securities, to which any Holder or the
Trustee would be entitled except for the
provisions of this Article, shall be paid
or delivered by the person making such
payment or distribution, whether a trustee
in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the
holders of such Senior Indebtedness or
their representative or representatives or
to the trustee or trustees under any
indenture under which any instruments
evidencing any of such Senior Indebtedness
may have been issued, ratably according to
the aggregate amounts remaining unpaid on
account of such Senior Indebtedness held or
represented by each, to the extent
necessary to make payment in full of all
Senior Indebtedness remaining unpaid after
giving effect to any concurrent payment or
distribution (or provision therefor) to the
holders of such Senior Indebtedness, before
any payment or distribution is made to the
Holders of the indebtedness evidenced by
the Securities or to the Trustee under this
Indenture; and
(3) in the event that,
notwithstanding the foregoing, any payment
by, or distribution of assets of, the
Company of any kind or character, whether
in cash, property or securities, in respect
of principal of or interest on the
Securities or in connection with any
repurchase by the Company of the
Securities, shall be received by the
Trustee or any Holder before all Senior
Indebtedness is paid in full, or provision
is made for such payment in money or
money's worth, such payment or distribution
in respect of principal of or interest on
the Securities or in connection with any
repurchase by the Company of the Securities
shall be paid over to the holders of such
Senior Indebtedness or their representative
or representatives or to the trustee or
trustees under any indenture under which
any instruments evidencing any such Senior
Indebtedness may have been issued, ratably
as aforesaid, for application to the
payment of all Senior Indebtedness
remaining unpaid until all such Senior
Indebtedness shall have been paid in full,
after giving effect to any concurrent
payment or distribution (or provision
therefor) to the holders of such Senior
Indebtedness.
Notwithstanding the foregoing, at any time after
the 123rd day following the date of deposit of cash or
Government Obligations pursuant to Section 701 (provided
all conditions set out in such Section shall have been
satisfied), the funds so deposited and any interest
thereon will not be subject to any rights of holders of
Senior Indebtedness including, without limitation, those
arising under this Article Fifteen; provided that no event
described in clauses (d) and (e) of Section 801 with
respect to the Company has occurred during such 123-day
period.
For purposes of this Article only, 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 or reorganization or
readjustment which are subordinate in right of payment to
all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in
this Article. 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 Eleven
hereof shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this
Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article Eleven hereof.
Nothing in Section 1501 or in this Section 1502 shall
apply to claims of, or payments to, the Trustee under or
pursuant to Section 907.
SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness.
Any failure by the Company to make any payment
on or perform any other obligation in respect of Senior
Indebtedness, other than any indebtedness incurred by the
Company or assumed or guaranteed, directly or indirectly,
by the Company for money borrowed (or any deferral,
renewal, extension or refunding thereof) or any other
obligation as to which the provisions of this Section
shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or
obligation, shall not be deemed a default under clause (b)
of Section 1502 if (i) the Company shall be disputing its
obligation to make such payment or perform such obligation
and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which
is in full force and effect and is not subject to further
review, including a judgment that has become final by
reason of the expiration of the time within which a party
may seek further appeal or review, or (B) in the event
that a judgment that is subject to further review or
appeal has been issued, the Company shall in good faith be
prosecuting an appeal or other proceeding for review and a
stay or execution shall have been obtained pending such
appeal or review.
SECTION 1504. Subrogation.
Senior Indebtedness shall not be deemed to have
been paid in full unless the holders thereof shall have
received cash (or securities or other property
satisfactory to such holders) in full payment of such
Senior Indebtedness then outstanding. Subject to the
prior payment in full of all Senior Indebtedness, the
rights of the Holders of the Securities shall be
subrogated to the rights of the holders of Senior
Indebtedness to receive any further payments or
distributions of cash, property or securities of the
Company applicable to the holders of the Senior
Indebtedness until all amounts owing on the Securities
shall be paid in full; and such payments or distributions
of cash, property or securities received by the Holders of
the Securities, by reason of such subrogation, which
otherwise would be paid or distributed to the holders of
such Senior Indebtedness shall, as between the Company,
its creditors other than the holders of Senior
Indebtedness, and the Holders, be deemed to be a payment
by the Company to or on account of Senior Indebtedness, it
being understood that the provisions of this Article are
and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
SECTION 1505. Obligation of the Company Unconditional.
Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other
than the holders of Senior Indebtedness and the Holders,
the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and
interest on the Securities 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 and creditors of the Company other than the
holders of Senior Indebtedness, nor shall anything herein
or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the
rights, if any, under this Article 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 or
securities of the Company referred to in this Article, the
Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in
which such dissolution, winding up, liquidation or
reorganization proceedings are pending for the purpose 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.
SECTION 1506. Priority of Senior Indebtedness Upon
Maturity.
Upon the maturity of the principal of any Senior
Indebtedness by lapse of time, acceleration or otherwise,
all matured principal of Senior Indebtedness and interest
and premium, if any, thereon shall first be paid in full
before any payment of principal or premium, if any, or
interest, if any, is made upon the Securities or before
any Securities can be acquired by the Company or any
sinking fund payment is made with respect to the
Securities (except that required sinking fund payments may
be reduced by Securities acquired before such maturity of
such Senior Indebtedness).
SECTION 1507. Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all rights set
forth in this Article with respect to any Senior
Indebtedness at any time held by it, to the same extent as
any other holder of Senior Indebtedness. Nothing in this
Article shall deprive the Trustee of any of its rights as
such holder.
SECTION 1508. Notice to Trustee to Effectuate
Subordination.
Notwithstanding the provisions of this Article
or any other provision of the Indenture, the Trustee shall
not be charged with knowledge of the existence of any
facts which would prohibit the making of any payment of
moneys to or by the Trustee unless and until the Trustee
shall have received written notice thereof from the
Company, from a Holder or from a holder of any Senior
Indebtedness or from any representative or representatives
of such holder and, prior to the receipt of any such
written notice, the Trustee shall be entitled, subject to
Section 901, in all respects to assume that no such facts
exist; provided, however, that, if prior to the fifth
Business Day preceding the date upon which by the terms
hereof any such moneys may become payable for any purpose,
or in the event of the execution of an instrument pursuant
to Section 702 acknowledging satisfaction and discharge of
this Indenture, then if prior to the second Business Day
preceding the date of such execution, the Trustee shall
not have received with respect to such moneys the notice
provided for in this Section, then, anything herein
contained to the contrary notwithstanding, the Trustee
may, in its discretion, receive such moneys and/or apply
the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary, which
may be received by it on or after such date; provided,
however, that no such application shall affect the
obligations under this Article of the persons receiving
such moneys from the Trustee.
SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness.
The holders of Senior Indebtedness may, without
affecting in any manner the subordination of the payment
of the principal of and premium, if any, and interest, if
any, on the Securities, at any time or from time to time
and in their absolute discretion, agree with the Company
to change the manner, place or terms of payment, change or
extend the time of payment of, or renew or alter, any
Senior Indebtedness, or amend or supplement any instrument
pursuant to which any Senior Indebtedness is issued, or
exercise or refrain from exercising any other of their
rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder, all without
notice to or assent from the Holders or the Trustee.
SECTION 1510. Trustee Has No Fiduciary Duty to Holders of
Senior Indebtedness.
With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to
observe only such of its covenants and objectives as are
specifically set forth in this Indenture, 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 shall not be liable to any such holders
if it shall mistakenly pay over or deliver to the Holders
or the Company or any other Person, money or assets to
which any holders of Senior Indebtedness shall be entitled
by virtue of this Article or otherwise.
SECTION 1511. Paying Agents Other Than the Trustee.
In case at any time any Paying Agent other than
the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in
this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and
including such Paying Agent within its meaning as fully
for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the
Trustee; provided, however, that Sections 1507, 1508 and
1510 shall not apply to the Company if it acts as Paying
Agent.
SECTION 1512. Rights of Holders of Senior Indebtedness
Not Impaired.
No right of any present or future holder of
Senior Indebtedness to enforce the subordination herein
shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or
by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of
any knowledge thereof any such holder may have or be
otherwise charged with.
SECTION 1513. Effect of Subordination Provisions;
Termination.
Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately
succeeding sentence, all the provisions of this Indenture
shall be subject to the provisions of this Article, so far
as the same may be applicable thereto.
Notwithstanding anything contained herein to the
contrary, the provisions of this Article Fifteen shall be
of no further effect, and the Securities shall no longer
be subordinated in right of payment to the prior payment
of Senior Indebtedness, if the Company shall have
delivered to the Trustee a notice to such effect. Any
such notice delivered by the Company shall not be deemed
to be a supplemental indenture for purposes of Article
Twelve hereof.
_________________________
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.
IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ENTERGY GULF STATES, INC.
By:____________________________
Vice President and Treasurer
ATTEST:
____________________________
Assistant Secretary
<PAGE>
THE BANK OF NEW YORK, Trustee
By:____________________________
Assistant Treasurer
ATTEST:
_____________________________
Assistant Vice President
<PAGE>
STATE OF LOUISIANA )
) ss.:
PARISH OF ORLEANS )
On the ___ day of ______, 199_, before me
personally came William J. Regan, Jr., to me known, who,
being by me duly sworn, did depose and say that he is the
Vice President and Treasurer of Entergy Gulf States, Inc.,
one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
Denise C. Redmann
Notary Public
Parish of Orleans, State of
Louisiana
My Commission is Issued for
Life
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of ______, 199_, before me
personally came _____________, to me known, who, being by
me duly sworn, did depose and say that she is an
___________________ of The Bank of New York, one of the
corporations described in and which executed the foregoing
instrument; that she knows the seal of said corporation;
that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that she signed her
name thereto by like authority.
William J. Cassels
Notary Public, State of New York
No. 01CA5027729
Qualified in Bronx County
Certificate Filed in New York County
Commission Expires May 16, 1998
Exhibit 4.04
CERTIFICATE OF TRUST
OF
ENTERGY GULF STATES CAPITAL I
THIS CERTIFICATE OF TRUST of Entergy Gulf States
Capital I (the "Trust"), dated as of November 27, 1996 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. 3801 et seq.).
1. Name. The name of the business trust being
formed hereby is Entergy Gulf States 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), White Clay Center, Newark, New Castle
County, Delaware.
3. Effective Date. This Certificate of Trust
shall be effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the
only trustees of the Trust, have executed this Certificate
of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE) WILLIAM J. REGAN, JR.
not in its individual capacity not in his individual capacity
but solely as Trustee but solely as Trustee
By: /s/ Joseph G. Ernst By: /s/ William J. Regan, Jr.
Name: Joseph G. Ernst
Title: Assistant Vice President
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By: /s/ Timothy J. Shea
Name:Timothy J. Shea
Title: Assistant Treasurer
Exhibit 4.05
TRUST AGREEMENT
OF ENTERGY GULF STATES CAPITAL I
This TRUST AGREEMENT of Entergy Gulf States Capital I
(the "Trust"), dated as of December 2, 1996, among (i) Entergy
Gulf States, Inc., a Texas corporation (the "Depositor"), (ii)
The Bank of New York, a New York banking corporation, not in its
individual capacity but solely as trustee of the Trust, (iii) The
Bank of New York (Delaware), a Delaware banking corporation, not
in its individual capacity but solely as trustee of the Trust,
and (iv) William J. Regan, Jr., an individual employed by the
Depositor, not in his individual capacity but solely as trustee
of the Trust (each of such trustees in (ii), (iii) and (iv) a
"Trustee" and collectively, the "Trustees"). The Depositor and
the Trustees hereby agree as follows:
I. The trust created hereby shall be known as "Entergy
Gulf States Capital I", in which name the Trustees, or the
Depositor to the extent provided herein, may conduct the business
of the Trust, make and execute contracts, and sue and be sued.
II. 2. The Depositor hereby assigns, transfers, conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. 3801 et seq. (the "Business Trust Act"), and that
this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Delaware Secretary of State
in accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such
party and substantially in the form to be included as an exhibit
to the 1933 Act Registration Statement referred to below, to
provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and
delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with
respect of the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and
direct the Depositor (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf
of the Trust, (a) a Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or post-
effective amendments to the 1933 Act Registration Statement,
relating to the registration under the Securities Act of 1933, as
amended, of the Preferred Securities of the Trust and certain
other securities and (b) a Registration Statement on Form 8-A
(the "1934 Act Registration Statement") (including all pre-
effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under
Section 12(b) of the Securities Exchange Act of 1934, as amended;
(ii) to file with the New York Stock Exchange (the "Exchange")
and execute on behalf of the Trust a listing application and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on the Exchange and (iii) to
file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as
shall be necessary or desirable to register the Preferred
Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to
in clauses (i) and (ii) above is required by the rules and
regulations of the Commission, the Exchange or state securities
or blue sky laws, to be executed on behalf of the Trust by one or
more of the Trustees, each of the Trustees, in its or his
capacity as Trustee of the Trust, is hereby authorized and, to
the extent so required, directed to join in any such filing and
to execute on behalf of the Trust any and all of the foregoing,
it being understood that [The Bank of New York and The Bank of
New York (Delaware)], in their capacities as Trustees of the
Trust, respectively, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless
required by the rules and regulations of the Commission, the New
York Stock Exchange or state securities or blue sky laws. In
connection with all of the foregoing, the Depositor and each
Trustee, solely in its or his capacity as Trustee of the Trust,
hereby constitutes and appoints William J. Regan, Jr., Steve
McNeal and Frank Williford and each of them, as its or his true
and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or such
Trustee or in the Depositor's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other
documents in connection therewith and in connection with the
filing of the 1933 Act Registration Statement and the 1934 Act
Registration Statement, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and
purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their respective substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall
be fixed from time to time by a written instrument signed by the
Depositor which may increase or decrease the number of Trustees;
provided, however, that to the extent required by the Business
Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware, or, if not a natural person,
an entity which has its principal place of business in the State
of Delaware and otherwise meets the requirements of applicable
Delaware law. Subject to the foregoing, the Depositor is
entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty days prior notice to
Depositor.
7. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed as of the day and year first
above written.
ENTERGY GULF STATES, INC.,
as Depositor
By:___________________________________
Name: _________________________
Title: __________________________
THE BANK OF NEW YORK, not in its
individual capacity but solely
as Trustee
By:___________________________________
Name: _________________________
Title:__________________________
THE BANK OF NEW YORK,
(DELAWARE), not in its
individual capacity but
solely as Trustee
By:___________________________________
Name:__________________________
Title: __________________________
William J. Regan, Jr., not in his individual
capacity but solely as Trustee
By:___________________________________
Exhibit 4.06
AMENDED AND RESTATED
TRUST AGREEMENT
among
ENTERGY GULF STATES, INC., as Depositor
and
THE BANK OF NEW YORK, as Property Trustee
THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee
Steven C. McNeal,
William J. Regan, Jr.
and
Frank Williford IV, as Administrative Trustees
Dated as of ______ __, 199_
ENTERGY GULF STATES CAPITAL I
Entergy Gulf States 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
- --------------------- -----------------------
Section 310(a)(1) 8.07
(a)(2) 8.07
(a)(3) 8.09
(a)(4) Not Applicable
(b) 8.08
Section 311(a) 8.13
(b) 8.13
Section 312(a) 5.07
(b) 5.07
(c) 5.07
Section 313(a) 8.14(a)
(a)(4) 8.14(b)
(b) 8.14(b)
(c) 8.14(a)
(d) 8.14(a),8.14(b)
Section 314(a) Not Applicable
(b) Not Applicable
(c)(1) Not Applicable
(c)(2) Not Applicable
(c)(3) Not Applicable
(d) Not Applicable
(e) Not Applicable
Section 315(a) 8.01
(b) 8.02, 8.14(b)
(c) 8.01(a)
(d) 8.01, 8.03
(e) Not Applicable
Section 316(a) Not Applicable
(a)(1)(A) Not Applicable
(a)(1)(B) Not Applicable
(a)(2) Not Applicable
(b) Not Applicable
(c) Not Applicable
Section 317(a)(1) Not Applicable
(a)(2) Not Applicable
(b) 5.09
Section 318(a) 10.10
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
Defined Terms
Section 1.01. Definitions 2
ARTICLE II.
Continuation of the Trust
Section 2.01. Name 11
Section 2.02. Office of the Delaware Trustee;
Principal Place of Business 11
Section 2.03. Initial Contribution of Trust
Property; Organizational Expenses 11
Section 2.04. Issuance of the Preferred
Securities 11
Section 2.05. Subscription and Purchase of
Debentures; Issuance of the Common
Securities 12
Section 2.06. Declaration of Trust; Appointment
of Additional Administrative Trustees 12
Section 2.07. Authorization to Enter into Certain
Transactions 12
Section 2.08. Assets of Trust 16
Section 2.09. Title to Trust Property 16
ARTICLE III.
Payment Account
Section 3.01. Payment Account 17
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions 17
Section 4.02. Redemption 18
Section 4.03. Subordination of Common Securities 20
Section 4.04. Payment Procedures 21
Section 4.05. Tax Returns and Reports 21
Section 4.06. Payment of Taxes, Duties, Etc. of
the Trust 21
Section 4.07. Payments under Subordinated
Indenture 21
ARTICLE V.
Trust Securities Certificates
Section 5.01. Initial Ownership 22
Section 5.02. The Trust Securities Certificates 22
Section 5.03. Execution and Delivery of Trust
Securities Certificates 22
Section 5.04. Registration of Transfer and
Exchange of Preferred Securities
Certificates 22
Section 5.05. Mutilated, Destroyed, Lost or
Stolen Trust Securities Certificates 23
Section 5.06. Persons Deemed Securityholders 24
Section 5.07. Access to List of Securityholders'
Names and Addresses 24
Section 5.08. Maintenance of Office or Agency 24
Section 5.09. Appointment of Paying Agent 25
Section 5.10. Ownership of Common Securities by
Depositor; Common Securities
Certificate 25
Section 5.11. Book-Entry Preferred Securities
Certificates 26
Section 5.12. Notices to Securities Depository 26
Section 5.13. Definitive Preferred Securities
Certificates 26
Section 5.14. Rights of Securityholders 27
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights 27
Section 6.02. Notice of Meetings 29
Section 6.03. Meetings of Holders of Preferred
Securities 29
Section 6.04. Voting Rights 29
Section 6.05. Proxies, etc. 30
Section 6.06. Securityholder Action by Written
Consent 30
Section 6.07. Record Date for Voting and Other
Purposes 30
Section 6.08. Acts of Securityholders 30
Section 6.09. Inspection of Records 31
ARTICLE VII.
Representations and Warranties of the Property
Trustee, the Delaware Trustee and the Depositor
Section 7.01. Property Trustee 32
Section 7.02. Delaware Trustee 32
Section 7.03. Depositor 33
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities 33
Section 8.02. Certain Notices 35
Section 8.03. Certain Rights of Property Trustee 35
Section 8.04. Not Responsible for Recitals or
Issuance of Securities 38
Section 8.05. May Hold Securities 38
Section 8.06. Compensation; Fees; Indemnity. 38
Section 8.07. Certain Trustees Required;
Eligibility 39
Section 8.08. Conflicting Interests 40
Section 8.09. Co-Trustees and Separate Trustee 40
Section 8.10. Resignation and Removal;
Appointment of Successor 41
Section 8.11. Acceptance of Appointment by
Successor 43
Section 8.12. Merger, Conversion, Consolidation
or Succession to Business 43
Section 8.13. Preferential Collection of Claims
Against Depositor or Trust 43
Section 8.14. Reports by Property Trustee 44
Section 8.15. Reports to the Property Trustee 44
Section 8.16. Evidence of Compliance With
Conditions Precedent 44
Section 8.17. Number of Trustees. 44
Section 8.18. Delegation of Power. 45
Section 8.19. Fiduciary Duty 45
Section 8.20. Voting 46
ARTICLE IX.
Termination, Liquidation and Merger
Section 9.01. Termination Upon Expiration Date 46
Section 9.02. Early Termination 46
Section 9.03. Termination 47
Section 9.04. Liquidation 47
Section 9.05. Mergers, Consolidations,
Amalgamations or Replacements of the Trust 49
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Guarantee by the Depositor and
Assumption of Obligations 50
Section 10.02. Limitation of Rights of
Securityholders 50
Section 10.03. Amendment 51
Section 10.04. Separability 52
Section 10.05. Governing Law 52
Section 10.06. Successors 52
Section 10.07. Headings 52
Section 10.08. Notice and Demand 52
Section 10.09. Agreement Not to Petition 53
Section 10.10. Conflict with Trust Indenture Act 53
Section 10.11. Acceptance of Terms of Trust
Agreement, Guarantee and Indenture 54
Section 10.12. Counterparts 54
EXHIBIT A Certificate of Trust of Entergy Gulf States
Capital I A-1
EXHIBIT B Certificate Evidencing Common Securities of
Entergy
Gulf States Capital I B-1
EXHIBIT C Agreement as to Expenses and Liabilities C-1
EXHIBIT D Certificate Evidencing Preferred Securities
of Entergy Gulf States Capital I D-1
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of
______ __, 199_, between (i) Entergy Gulf States, Inc., a Texas
corporation (the "Depositor"), (ii) The Bank of New York, a
banking corporation duly organized and existing under the laws of
New York, as trustee (the "Property Trustee"), (iii) The Bank of
New York (Delaware), a banking corporation duly organized under
the laws of Delaware, as trustee (the "Delaware Trustee") and
(iv) Steven C. McNeal, William J. Regan, Jr. and Frank Williford
IV, each an individual, as trustee, and each of whose address is
c/o Entergy Gulf States, Inc., 639 Loyola Avenue, New Orleans,
Louisiana 70113 (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 William J. Regan, Jr., as Administrative
Trustee, have heretofore duly declared and established a business
trust pursuant to the Delaware Business Trust Act (as hereinafter
defined) by the entering into of that certain Trust Agreement,
dated as of December 2, 1996 (the "Original Trust Agreement"),
and by the execution by the Property Trustee, the Delaware
Trustee and William J. Regan, Jr., as Administrative Trustee and
filing with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on December 2, 1996, the form of
which is attached as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee, Delaware
Trustee and William J. Regan, Jr., as 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 acquisition by the Trust from the Depositor of all of the
right, title and interest in the Debentures (as hereinafter
defined), (ii) the issuance of the Common Securities (as
hereinafter defined) by the Trust to the Depositor, (iii) the
issuance of the Preferred Securities (as hereinafter defined) by
the Trust pursuant to the Underwriting Agreement (as hereinafter
defined) and (iv) the appointment of additional Administrative
Trustees of the Trust;
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:
I. Defined Terms
Section 1.01. (a) Definitions. For all purposes of
this Trust Agreement, except as otherwise expressly provided or unless
the context otherwise requires:
(b) the terms defined in this Article have
the meanings assigned to them in this Article and include the plural
as well as the singular;
(c) 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;
(d) 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
(e) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Trust Agreement as
a whole and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust
Securities of a given Liquidation Amount and for 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.
"Administrative Trustee" means each of the
individuals identified as an "Administrative Trustee" in the
preamble to this Trust Agreement solely in their capacities as
Administrative Trustees of the Trust created hereunder and not in
their individual capacities, or such 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.
"Bankruptcy Event" means, with respect to any
Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under Federal bankruptcy law or any other
applicable Federal or State law, or appointing a receiver, liqui
dator, assignee, trustee sequestrator or other similar official
of such Person or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it to
the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under Federal bankruptcy law or
any other applicable Federal or State law, or the consent by it
to the filing of such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or similar
official of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due.
"Bankruptcy Laws" has the meaning specified in
Section 10.09.
"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 a duly authorized committee thereof 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"
mean certificates representing Preferred Securities issued in
global, fully registered form to the Securities Depository (as
hereinafter defined) as described in Section 5.11.
"Business Day" means a day other than (x) a
Saturday or a Sunday, (y) a day on which banks in New York, New
York are authorized or obligated by law or executive order to
remain closed or (z) a day on which the Property Trustee's
Corporate Trust Office or the Debenture Trustee's principal
corporate trust office is closed for business.
"Certificate Depository Agreement" means the
agreement among the Trust, the Depositor and The Depository Trust
Company, as the initial Securities Depository, dated as of the
Closing Date, relating to the Trust Securities Certificate, as
the same may be amended and supplemented from time to time.
"Certificate of Trust" has the meaning specified
in Section 2.07(d).
"Closing Date" means the date of 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 B.
"Corporate Trust Office" means the principal
corporate trust office of the Property Trustee located in New
York, New York.
"Covered Person" means: (a) any officer,
director, shareholder, beneficial owner, partner, member,
representative, employee or agent of the Trust or the Trust's
Affiliates; and (b) any Holder of Trust Securities.
"Debenture Event of Default" means an "Event of
Default" as defined in the Subordinated Indenture.
"Debenture Redemption Date" means "Redemption
Date" as defined in the Subordinated Indenture with respect to
the Debentures.
"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
Subordinated Indenture.
"Debentures" means the $__________ aggregate
principal amount of the Depositor's __% Junior Subordinated
Deferrable Interest Debentures, Series A, due 20__, issued
pursuant to the Subordinated Indenture.
"Definitive Preferred Securities Certificates"
means Preferred Securities Certificates issued in certificated,
fully registered form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of
Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq.,
as it may be amended from time to time.
"Delaware Trustee" means the banking corporation
identified as the "Delaware Trustee" in the preamble to this
Trust Agreement solely in its capacity as Delaware Trustee of the
Trust formed 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 4.01(a).
"Distributions" means amounts payable in respect
of the Trust Securities as provided in Section 4.01.
"Early Termination Event" has the meaning
specified in Section 9.02.
"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):
(i) the occurrence of a Debenture Event of
Default; or
(ii) 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
(iii) default by the Trust in the payment of
any Redemption Price (as hereinafter defined) when it becomes due
and payable; or
(iv) 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 whose performance or breach is specifically
dealt with in clause (ii) or (iii), 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 10% in Liquidation
Amount of the Outstanding Preferred Securities a written notice
specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder;
or
(v) the occurrence of a Bankruptcy Event with
respect to the Trust.
"Exchange Act" has the meaning specified in Section 2.07(c)(iv).
"Expense Agreement" means the Agreement as to
Expenses and Liabilities between the Depositor and the Trust,
substantially in the form attached as Exhibit C, as amended from
time to time.
"Expiration Date" shall have the meaning specified
in Section 9.01.
"Guarantee" means the Guarantee Agreement executed
and delivered by the Depositor and The Bank of New York, a New
York banking corporation, 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.
"Indemnified Person" means any Trustee, any
Affiliate of any Trustee, or any officer, director, shareholder,
member, partner, employee, representative or agent of any
Trustee, or any employee or agent of the Trust or its Affiliates.
"Investment Company Event" means 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 to the effect that
the Trust is or will be considered an "investment company" that
is required to be registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), which change in
law becomes effective on or after the date of original issuance
of the Preferred Securities.
"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 (i) 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 Subordinated
Indenture and the proceeds of which will be used to pay the
Redemption Price of such Trust Securities and (ii) with respect
to a distribution of Debentures to the Holders of Trust
Securities in connection with a termination and 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 9.04(a).
"Liquidation Distribution" has the meaning
specified in Section 9.04(e).
"Officers' Certificate" means a certificate signed
by the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the
officers signing an Officers' Certificate given pursuant to
Section 8.16 shall be the principal executive, financial or
accounting officer of the Depositor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of
the examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made
such examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been complied
with.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Trust, the Property Trustee,
the Delaware Trustee or the Depositor, but not an employee of the
Trust, the Property Trustee, the Delaware Trustee or the
Depositor, 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 delivered under this Trust Agreement,
except:
(i) Preferred Securities theretofore canceled by
the Property Trustee or delivered to the Property Trustee for
cancellation;
(ii) 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
(iii) Preferred Securities in exchange for or
in lieu of which other Preferred Securities have been delivered
pursuant to this Trust Agreement, including pursuant to Sections
5.04, 5.05, 5.11 or 5.13;
provided, however, that in determining whether the Holders
of the requisite Liquidation Amount of the Outstanding Preferred
Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate
of the Depositor or any Trustee shall be disregarded and deemed
not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in conclusively relying upon any such
request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities which 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 Securities Depository or, if a
Securities Depository Participant is not the beneficial owner,
then as reflected in the records of a Person maintaining an
account with such Securities Depository (directly or indirectly),
in accordance with the rules of such Securities Depository.
"Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 5.09 and shall initially be
The Bank of New York.
"Payment Account" means a segregated non-interest-
bearing corporate trust account maintained by the Property
Trustee at The Bank of New York, or such other banking
institution as the Depositor shall select 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
Paying Agent, pursuant to Section 5.09, shall make payments to
the Securityholders in accordance with Sections 4.01 and 4.02.
"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 a cumulative quarterly
income preferred security representing an undivided beneficial
interest in the assets of the Trust having a Liquidation Amount
of $25 and having rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a
certificate evidencing ownership of Preferred Securities,
substantially in the form attached as Exhibit D.
"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 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.
"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 Maturity (as defined in the Subordinated
Indenture as hereinafter defined) of the Debentures shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any
Redemption Date of any Trust Security, the Liquidation Amount of
such Trust Security, plus accumulated and unpaid Distributions
thereon to the Redemption Date and 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 Amount) among the Trust
Securities.
"Registrar" shall mean the registrar for the
Preferred Securities appointed by the Trust and shall be
initially The Bank of New York.
"Relevant Trustee" shall have the meaning
specified in Section 8.10.
"Responsible Officer," when used with respect to
the Property Trustee means an officer of the Property Trustee
assigned by the Property Trustee to administer its corporate
trust matters.
"Securities Depository" shall be The Depository
Trust Company, or a successor thereto.
"Securities Depository Participant" means an
institution which deposits securities with a Securities
Depository for holding thereby and for whom from time to time a
Securities Depository effects book-entry transfers and pledges of
such securities.
"Securities Register" shall mean the Securities
Register described in Section 5.04.
"Securityholder" or "Holder" means a Person in
whose name a Trust Security or Securities is registered in the
Securities Register; any such Person is a beneficial owner within
the meaning of the Delaware Business Trust Act.
"Special Event" means either a Tax Event or an
Investment Company Event.
"Subordinated Indenture" means the Indenture,
dated as of _____ __, 199_, between the Depositor and the
Debenture Trustee, as trustee, as amended or supplemented from
time to time.
"Tax Event" means the receipt by the Trust or the
Depositor of an Opinion of Counsel experienced in such matters to
the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting
taxation, or as a result of any official administrative or
judicial pronouncement or 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 original 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 of the date thereof, 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 of the
date thereof, 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 of the date
thereof, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Transfer Agent" shall mean one or more transfer
agents for the Preferred Securities appointed by the
Administrative Trustees on behalf of the Trust and shall be
initially The Bank of New York.
"Trust" means the Delaware business trust created
by the Original Trust Agreement 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 Amended and Restated 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 Amended and Restated Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture
Act of 1939 as in force at the date as of which this instrument
was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii)
any cash on deposit in, or owing to, the Payment Account and
(iii) all proceeds and rights in respect of the foregoing and any
other property and assets for the time being 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.
"Underwriting Agreement" means the Underwriting
Agreement, dated as of ______ __, 199_, among the Trust, the
Depositor and the underwriters named therein.
ARTICLE I. Continuation of the Trust
ARTICLE II.Section 1Section 1. Name. The Trust continued
hereby shall be known as "Entergy Gulf States 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.
ARTICLE II.Section 1Section 2. Office of the Delaware
Trustee; Principal Place of Business. The office of the Delaware
Trustee in the State of Delaware is White Clay Center, Route 273,
Newark, Delaware 19711, or at such other address in Delaware as
the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal place of
business of the Trust is c/o Entergy Gulf States, Inc., 639
Loyola Avenue, New Orleans, Louisiana 70113.
ARTICLE II.Section 1Section 3. Initial Contribution of
Trust Property; Organizational Expenses. The Property Trustee
acknowledges receipt in trust from the Depositor in connection
with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon
request of any Trustee, promptly reimburse such Trustee for any
such expenses paid by such Trustee. The Depositor shall make no
claim upon the Trust Property for the payment of such expenses.
ARTICLE II.Section 1Section 4. Issuance of the Preferred
Securities. The Depositor, on behalf of the Trust, executed and
delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, one of the
Administrative Trustees, on behalf of the Trust in accordance
with Section 5.02 and the Underwriting Agreement, shall execute
manually and deliver a Preferred Securities Certificate,
registered in the name of the nominee of the Securities
Depository, in an aggregate amount of __________ Preferred
Securities having an aggregate Liquidation Amount of $__________
against receipt of the aggregate purchase price of such Preferred
Securities of $__________, which amount such Administrative
Trustee shall promptly deliver to the Property Trustee.
ARTICLE II.Section 1Section 5. Subscription and Purchase of
Debentures; Issuance of the Common Securities. Contemporaneously
with the execution and delivery of this Trust Agreement, the
Administrative Trustees, 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 $__________, and, in
satisfaction of the purchase price for such Debentures, (x) one
of the Administrative Trustees, on behalf of the Trust, shall
execute and deliver to the Depositor Common Securities
Certificates in accordance with Section 5.02, registered in the
name of the Depositor, in an aggregate amount of __________
Common Securities having an aggregate Liquidation Amount of
$__________, and (y) the Administrative Trustees, on behalf of
the Trust, shall deliver to the Depositor the sum of $__________
representing the proceeds from the sale of the Preferred
Securities pursuant to the Underwriting Agreement.
ARTICLE II.Section 1Section 6. Declaration of Trust;
Appointment of Additional Administrative Trustees. The exclusive
purposes and functions of the Trust are (i) to issue and sell
Trust Securities and invest the proceeds thereof in Debentures,
and (ii) to engage in those activities necessary 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. 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 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.
Anything in this Trust Agreement to the contrary notwithstanding
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.
ARTICLE II.Section 1Section 7. Authorization to Enter into
Certain Transactions. (a) The Trustees shall conduct the affairs
of the Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b)
of this Section 2.07 and Article VIII and in accordance with the
following provisions (A) and (B), the Trustees shall have the
authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the
authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in
furtherance thereof, including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees, acting
singly or jointly, shall have the power, duty and authority to
act on behalf of the Trust with respect to the following matters:
(i) the issuance and sale of the Trust Securities;
(ii) without the consent of any Person, to cause
the Trust to enter into and to execute, deliver and perform on
behalf of the Trust, the Expense Agreement, and such agreements
or other documents as may be necessary or desirable in connection
with the purposes and function of the Trust;
(iii) to qualify the Trust to do business in any
jurisdiction as may be necessary or desirable;
(iv) to take all action that may be necessary or appropriate
for the preservation and 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 Preferred
Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(v) 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;
(vi) 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 Exchange Act, and the preparation and filing of all periodic
and other reports and other documents pursuant to the foregoing;
(vii) the appointments of a Paying Agent (subject to Section
5.09), a Transfer Agent and a Registrar in accordance with this
Trust Agreement;
(viii) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(ix) 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;
(x) the taking of any action incidental to the foregoing as
the Administrative Trustees may from time to time determine is
necessary or advisable to protect and conserve the Trust Property
for the benefit of the Securityholders (without consideration of
the effect of any such action on any particular Securityholder);
and
(xi) 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.
(B) 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 ministerial matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Debentures;
(iii) the deposit of interest, principal and any other
payments made in respect of the Debentures in the Payment
Account;
(iv) the distribution of amounts owed to the Securityholders
in respect of the Trust Securities in accordance with the terms
of this Trust Agreement;
(v) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust
Agreement;
(vi) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
(vii) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust; and
(viii) the taking of any ministerial action incidental to the
foregoing as the Property Trustee may from time to time determine
is necessary or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
Subject to this Section 2.07(a)(B), the Property
Trustee shall have none of the duties, powers or authority of the
Administrative Trustees set forth in Section 2.07(a)(A) or the
Depositor set forth in Section 2.07(c). The Property Trustee
shall have the power and authority to exercise all of the rights,
powers and privileges of a holder of Debentures under the
Subordinated Indenture and, if an Event of Default occurs and is
continuing, the Property Trustee may, for the benefit of Holders
of the Trust Securities, in its discretion proceed to protect and
enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of this Trust
Agreement.
(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, 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 (v)
take or consent to any action that would result in the placement
of a Lien on any of the Trust Property. To the extent required
under this Trust Agreement and the Trust Indenture Act, the
Property Trustee shall defend all claims and demands of all
Persons at any time claiming any Lien on any of the Trust
Property adverse to the interests of the Trust or the
Securityholders in their capacity as Securityholders. 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 interests of the Trust or the
Securityholders in their capacity as Securityholders to the
extent not required to be done by the Property Trustee in the
preceding sentence.
(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 by the Trust of a registration
statement on Form S-3 in relation to the Preferred Securities,
the Debentures, the Guarantee and certain related obligations,
including any amendments thereto;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of
the Preferred Securities and the taking of any and all such acts,
other than actions which must be taken by or on behalf of the
Trust, and the advising of the Trustees of actions they must take
on behalf of the Trust, and the preparation for execution and
filing of any documents to be executed and filed by the Trust or
on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(iii) the preparation for filing by the Trust and the
execution by the Trust of an application to the New York Stock
Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any
Preferred Securities and to file or cause the Administrative
Trustees to file thereafter with such exchange such notifications
and documents as may be necessary from time to time to maintain
such listing;
(iv) the preparation for filing by the Trust with the
Commission and the execution by the Trust of a registration
statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including
any amendments thereto;
(v) the selection of the investment banker or bankers to
act as underwriters with respect to the offer and sale by the
Trust of Preferred Securities and the negotiation of the terms of
and the execution and delivery of on behalf of the Trust the
Underwriting Agreement and such other agreements as may be
necessary or desirable in connection with the consummation
thereof; 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 Investment Company Act or classified
other than as a "grantor trust" for United States Federal income
tax purposes so that the Debentures will be treated as
indebtedness of the Depositor for United States Federal income
tax purposes. In this connection, subject to the provisions of
Section 10.03, the Depositor and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable
law, 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, the "Certificate of Trust") or this
Trust Agreement, that each of the Depositor and the
Administrative Trustees determines in its discretion to be
necessary or desirable for such purposes, as long as such action
does not materially adversely affect the interests of the Holders
of the Preferred Securities.
ARTICLE II.Section 1Section 8. Assets of Trust. The assets
of the Trust shall consist of the Trust Property.
ARTICLE II.Section 1Section 9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in
the Property Trustee (in its capacity as such) and shall be held
and administered by the Property Trustee for the benefit of the
Securityholders in accordance with this Trust Agreement.
ARTICLE III. Payment Account
ARTICLE III.Section 1Section 1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and
the Paying Agent appointed by the Administrative Trustees 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 Holders of Trust Securities 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 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
ARTICLE IV.Section 1Section 1. 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
accrue from the Closing Date, and, except in the event that the
Depositor exercises its right to extend the interest payment
period for the Debentures pursuant to Section 311 of the
Subordinated Indenture, shall be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year,
commencing on _________ __, 199_. If any date on which
Distributions are otherwise payable on the Trust Securities is
not a Business Day, then the payment of such Distribution shall
be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be
made on the immediately preceding Business Day, in each case,
with the same force and effect as if made on such date (each date
on which distributions are payable in accordance with this
Section 4.01(a) a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be
fixed at a rate of __% per annum of the Liquidation Amount of the
Trust Securities. The amount of Distributions payable for any
full quarterly period shall be computed on the basis of twelve 30-
day months and a 360-day year and for any period shorter than a
full month, on the basis of the actual number of days elapsed.
If the interest payment period for the Debentures is extended
pursuant to Section 311 of the Subordinated Indenture, then
Distributions on the Preferred Securities will be deferred for
the period equal to the extension of the interest payment period
for the Debentures and the rate per annum at which Distributions
on the Trust Securities accumulate shall be increased by an
amount such that the aggregate amount of Distributions that
accumulate on all Trust Securities during any such extended
interest payment period is equal to the aggregate amount of
interest (including, to the extent permitted by law, interest
payable on unpaid interest at the percentage rate per annum set
forth above, compounded quarterly) that accrues during any such
extended interest payment period on the Debentures. The amount
of Distributions payable for any period shall include the
Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and
shall be deemed 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 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 15 days prior to the relevant
Distribution Date.
ARTICLE IV.Section 1Section 2. Redemption.
(a) On each Debenture Redemption Date and at Maturity for the
Debentures, the Property Trustee will be required to redeem a
Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less
than 30 nor more than 60 days prior to the Redemption Date to
each Holder of Trust Securities to be redeemed, at such Holder's
address appearing in the Security Register. All notices of
redemption shall state:
(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 interest thereon will cease to accrue 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
deemed payable on each Redemption Date only to the extent that
the Trust has funds immediately available in the Payment Account
for such payment.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New
York time, on the Redemption Date, subject to Section 4.02(c),
the Property Trustee will, so long as the Preferred Securities
are in book-entry only form, deposit irrevocably with the
Securities Depository for the Preferred Securities funds
sufficient to pay the applicable Redemption Price and will give
such Securities Depository irrevocable instructions and authority
to pay the applicable Redemption Price to the holders thereof.
If the Preferred Securities are no longer in book-entry only
form, the Property Trustee, subject to Section 4.02(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 Securities
Register for the Trust Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption
shall have been given and funds deposited as required, then on
the Redemption Date, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price, but
without interest thereon, and such Trust Securities will cease to
be outstanding. In the event that any Redemption Date is not a
Business Day, then payment of the Redemption Price payable on
such date shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day
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 deemed the
date fixed for redemption for purposes of calculating the
Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities
and any distribution of Debentures to the Holders shall be made
to the Holders as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one
Business Day prior to such 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
fifteenth day prior to the relevant Redemption Date.
(f) Subject to Section 4.03(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 3% to the Common Securities and
97% to the Preferred Securities. The particular Preferred
Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem
fair and appropriate and which may provide for the selection for
a redemption of portions (equal to $25 or integral multiples
thereof) of the Liquidation Amount of Preferred Securities of a
denomination larger than $25. The Property Trustee shall
promptly notify the Transfer Agent and 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.
ARTICLE IV.Section 1Section 3. Subordination of Common
Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price plus accumulated and
unpaid distributions of, the Trust Securities, as applicable,
shall be made pro rata 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 Amounts, if
applicable) on, or Redemption Price of, any Common Security, and
no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on
all Outstanding Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all
Outstanding Preferred Securities, shall have been made or
provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of
all Distributions (including Additional Amounts, if applicable)
on, or 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 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
Events 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.
ARTICLE IV.Section 1Section 4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if
applicable) in respect of the Preferred Securities shall be made
by check mailed to the address of the Person entitled thereto as
such address shall appear on the Securities Register or, if the
Preferred Securities are held by a Securities Depository, such
Distributions shall be made to the Securities Depository, which
shall credit the relevant Persons' accounts at such Securities
Depository 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
Holder of the Common Securities.
ARTICLE IV.Section 1Section 5. Tax Returns and Reports. The
Administrative Trustees shall prepare (or cause to be prepared),
at the Depositor's expense and direction, 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 Internal Revenue
Service Form 1041 (or any successor 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 related Internal Revenue Service Form
1099, or any successor form 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.
ARTICLE IV.Section 1Section 6. Payment of Taxes, Duties,
Etc. of the Trust. Upon receipt under the Debentures of
Additional Interest (as defined in the Subordinated Indenture),
the Property Trustee at the direction of an Administrative
Trustee or the Depositor shall promptly pay any taxes, duties or
governmental charges of whatsoever nature (other than withholding
taxes) imposed on the Trustee by the United States or any other
taxing authority.
ARTICLE IV.Section 1Section 7. Payments under Subordinated
Indenture. Any amount payable hereunder to any Holder of
Preferred Securities shall be reduced by the amount of any
corresponding payment such Holder has directly received pursuant
to Section 808 of the Subordinated Indenture. Notwithstanding
the provisions hereunder to the contrary, Securityholders
acknowledge that any Holder of Preferred Securities that receives
payment under Section 808 of the Subordinated Indenture may
receive amounts greater than the amount such Holder may be
entitled to receive pursuant to the other provisions of this
Trust Agreement.
ARTICLE V. Trust Securities Certificates
ARTICLE V.Section 1Section 1. Initial Ownership. Upon the
creation of the Trust and the contribution by the Depositor
pursuant to Section 2.03 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.
ARTICLE V.Section 1Section 2. The Trust Securities
Certificates. The Trust Securities Certificates shall be issued
in denominations of $25 Liquidation Amount and integral multiples
thereof. Subject to Section 2.04 relating to the original
issuance of the Preferred Securities Certificate registered in
the name of the nominee of the Securities Depository, the Trust
Securities Certificates shall be executed on behalf of the Trust
by manual or facsimile signature of at least one Administrative
Trustee and, if executed on behalf of the Trust by facsimile
signature, countersigned by a Transfer Agent or its agent. 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 and, if
executed on behalf of the Trust by facsimile signature,
countersigned by a Transfer Agent or its agent, 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 Section 5.04, 5.11 or 5.13.
ARTICLE V.Section 1Section 3. Execution and Delivery of Trust
Securities Certificates. On the Closing Date, the Administrative
Trustees shall cause Trust Securities Certificates, in an
aggregate Liquidation Amount as provided in Sections 2.04 and
2.05, to be executed on behalf of the Trust by at least one of
the Administrative Trustees, and in the case of Trust Securities
Certificates executed by facsimile signature, countersigned by a
Transfer Agent or its agent, and delivered to or upon the written
order of the Depositor signed by its chairman of the board, any
of its vice presidents or its Treasurer, without further
corporate action by the Depositor, in authorized denominations.
The Depositor agrees to indemnify, defend and hold each Transfer
Agent harmless against any and all costs and liabilities incurred
without negligence arising out of or in connection with any such
countersigning by it.
ARTICLE V.Section 1Section 4. Registration of Transfer and
Exchange of Preferred Securities Certificates. The Registrar
shall keep or cause to be kept, at its principal corporate
office, a Securities Register in which, subject to such
reasonable regulations as it may prescribe, the Registrar shall
provide for the registration of Preferred Securities Certificates
and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided.
Upon surrender for registration of transfer of any
Preferred Securities Certificate at the office or agency
maintained pursuant to Section 5.08, the Administrative Trustees,
or any one of them, shall execute on behalf of the Trust by
manual or facsimile signature and, if executed on behalf of the
Trust by facsimile signature, cause a Transfer Agent or its agent
to countersign 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. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender
of the Preferred Securities Certificates to be exchanged at the
office or agency maintained pursuant to Section 5.08.
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 Administrative Trustees and a Transfer Agent
duly executed by the Holder or such Holder's 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 Administrative
Trustees in accordance with 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 day 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 a Transfer Agent 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.
ARTICLE V.Section 1Section 5. Mutilated, Destroyed, Lost or
Stolen Trust Securities Certificates. If (a) any mutilated Trust
Securities Certificate shall be surrendered to a Transfer Agent,
or if a Transfer Agent 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 Transfer
Agent and the Administrative Trustees such security or indemnity
as may be required by them to save each of them and the Depositor
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 by manual or facsimile
signature and, if executed on behalf of the Trust by facsimile
signature, cause a Transfer Agent or its agent to countersign and
deliver, 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 5.05, the
Administrative Trustees or the Transfer Agent 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 5.05 shall constitute conclusive evidence of an
ownership interest in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Securities Certificate
shall be found at any time.
ARTICLE V.Section 1Section 6. Persons Deemed Securityholders.
Prior to due presentation of a Trust Securities Certificate for
registration of transfer, the Trustees, the Paying Agent and the
Registrar shall be entitled to 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
Registrar shall be bound by any notice to the contrary.
ARTICLE V.Section 1Section 7. Access to List of
Securityholders' Names and Addresses. The Administrative
Trustees shall furnish or cause to be furnished (x) to the
Depositor, within 15 days after receipt by any Administrative
Trustee of a request therefor from the Depositor in writing and
(y) to the Property Trustee, promptly after receipt by any
Administrative Trustee of a request therefor from the Property
Trustee in writing in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, a list, in
such form as the Depositor or the Property Trustee may reasonably
require, of the names and addresses of the Securityholders as of
the most recent record date. If Holders of Trust Securities
Certificates evidencing ownership at such time and for the
previous six months not less than 25% of the outstanding
aggregate Liquidation Amount apply in writing to any
Administrative Trustee, and such application states that the
applicants desire to communicate with other Securityholders with
respect to their rights under this Trust Agreement or under the
Trust Securities Certificates and such application is accompanied
by a copy of the communication that such applicants propose to
transmit, then the Administrative Trustees shall, within five
Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current
list of Securityholders. Each Holder, by receiving and holding a
Trust Securities Certificate, shall be deemed to have agreed not
to hold either the Depositor 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.
ARTICLE V.Section 1Section 8. Maintenance of Office or Agency.
The Depositor shall or shall cause the Transfer Agent to maintain
in the Borough of Manhattan, 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 Depositor
or the Transfer Agent in respect of the Trust Securities
Certificates may be served. The Depositor initially designates
The Bank of New York at its principal corporate trust office for
such purposes. The Depositor shall or shall cause the Transfer
Agent to give prompt written notice to the Property Trustee and
to the Securityholders of any change in any such office or
agency.
ARTICLE V.Section 1Section 9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such
Distributions to the Administrative Trustees and the Property
Trustee. 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 Property Trustee shall
be entitled to rely upon a certificate of the Paying Agent
stating in effect the amount of such funds so to be withdrawn and
that same are to be applied by the Paying Agent in accordance
with this Section 5.09. The Administrative Trustees or any one
of them may revoke such power and remove the Paying Agent in its
sole discretion. The Paying Agent may choose any co-paying agent
that is acceptable to the Administrative Trustees and the
Depositor. The Paying Agent shall be permitted to resign upon 30
days' written notice to the Administrative Trustees and the
Depositor. In the event of the removal or resignation of the
Paying Agent, the Administrative Trustees shall appoint a
successor that is reasonably acceptable to the Property Trustee
and the Depositor to act as Paying Agent (which shall be a bank,
trust company or an Affiliate of the Depositor). 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 resignation or removal of a Paying Agent such
Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06
shall apply to the Paying Agent appointed hereunder, and the
Paying Agent shall be bound by the requirements with respect to
paying agents of securities issued pursuant to the Trust
Indenture Act. Any reference in this Trust Agreement to the
Paying Agent shall include any co-paying agent unless the context
requires otherwise.
ARTICLE V.Section 2 0. Ownership of Common Securities by
Depositor; Common Securities Certificate. On the Closing Date,
the Depositor shall acquire, and thereafter retain, beneficial
and record ownership of the Common Securities. Any attempted
transfer of the Common Securities (other than a transfer in
connection with a merger or consolidation of the Depositor into
another corporation pursuant to Section 1101 of the Subordinated
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". A single Common Securities Certificate
representing the Common Securities shall be issued to the
Depositor in the form of a definitive Common Securities
Certificate.
ARTICLE V.Section 2Section 1. Book-Entry Preferred Securities
Certificates. 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
Securities Depository, 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 Securities Depository, 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 5.13. Unless and until Definitive Preferred Securities
Certificates have been issued to beneficial owners pursuant to
Section 5.13:
(a) the provisions of this Section 5.11 shall be
in full force and effect;
(b) the Registrar, the Paying Agent and the
Trustees shall be entitled to deal with the Securities Depository
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 the Book-Entry
Preferred Securities and shall have no obligations to the Owners
thereof;
(c) to the extent that the provisions of this
Section 5.11 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 5.11 shall control; and
(d) the rights of the Owners of the Book-Entry
Preferred Securities Certificates shall be exercised only through
the Securities Depository and shall be limited to those
established by law and agreements between such Owners and the
Securities Depository and/or the Securities Depository
Participants. Pursuant to the Certificate Depository Agreement,
unless and until Definitive Preferred Securities Certificates are
issued pursuant to Section 5.13, the initial Securities
Depository will make book-entry transfers among the Securities
Depository Participants and receive and transmit payments on the
Preferred Securities to such Securities Depository. Any
Securities Depository designated pursuant hereto will not be
deemed an agent of the Trustees for any purpose.
ARTICLE V.Section 2Section 2. Notices to Securities Depository.
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 pursuant to Section 5.13, the Trustees shall give all such
notices and communications specified herein to be given to Owners
to the Securities Depository, and shall have no obligations to
the Owners.
ARTICLE V.Section 2Section 3. Definitive Preferred Securities
Certificates. If (a) the Depositor advises the Trustees in
writing that the Securities Depository 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 Securities
Depository, 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 Securities
Depository is no longer in the best interests of the Owners of
Preferred Securities Certificates, then the Property Trustee
shall notify the Securities Depository, and the Securities
Depository 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 Securities
Depository, 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 Securities Depository. Neither the
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 in accordance with Section
5.02.
ARTICLE V.Section 2Section 4. Rights of Securityholders. The
legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with
Section 2.09, and the Securityholders shall not have any right or
title therein other than an undivided beneficial interest in the
assets of the Trust conferred by their Trust Securities and they
shall have no right to call for any partition or division of
property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving
only the rights specifically set forth therein and in this Trust
Agreement. The Preferred Securities shall have no preemptive or
similar rights and when issued and delivered to Preferred
Securityholders against payment of the purchase price therefor
will be fully paid and nonassessable interests in the Trust.
ARTICLE VI. Acts of Securityholders; Meetings; Voting
ARTICLE VI.Section 1Section 1. Limitations on Voting
Rights.
(a) Except as provided in this Section 6.01, in Section 10.03
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. If the Property Trustee fails to enforce its rights
under the Debentures or this Trust Agreement, a Holder of
Preferred Securities may institute a legal proceeding directly
against the Depositor to enforce the Property Trustee's rights
under the Debentures or this Trust Agreement, to the fullest
extent permitted by law, without first instituting any legal
proceeding against the Property Trustee or any other person.
Notwithstanding the foregoing, to the fullest extent permitted by
law, a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder directly of
principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation preference amount of
the Preferred Securities of such Holder on or after the due dates
specified in the Debentures. 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 Subordinated
Indenture.
(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 Section 813 of the
Subordinated 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 Subordinated Indenture or the
Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of a
majority of the aggregate Liquidation Amount of the Outstanding
Preferred Securities; provided, however, that where a consent
under the Subordinated Indenture would require the consent of
each holder of Debentures affected thereby, no such consent shall
be given by any 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
Preferred Securities, except pursuant to a subsequent vote of the
Preferred Securities. The Property Trustee shall notify all
Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of
the foregoing actions, the Property Trustee shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in
such matters to the effect that the Trust will 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) Subject to Section 10.03(c), if any proposed amendment to
the Trust Agreement provides for, or the Trustees otherwise
propose to effect, (i) any action that would materially adversely
affect 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 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 not be classified as a "grantor trust" but as an
association taxable as a corporation for United States Federal
income tax purposes.
ARTICLE VI.Section 1Section 2. Notice of Meetings. Notice
of all meetings of the Holders of Preferred Securities, stating
the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.08 to each Holder of a
Preferred Security, 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.
ARTICLE VI.Section 1Section 3. Meetings of Holders of
Preferred Securities. No annual meeting of Securityholders is
required to be held. The Administrative Trustees, however, shall
call a meeting of Preferred Securityholders to vote on any matter
upon the written request of the Holders of 25% of the then
Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount) and may, at any time in their discretion,
call a meeting of Holders of Preferred Securities to vote on any
matters as to which the Holders of Preferred Securities are
entitled to vote.
Holders of 50% of the then Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount),
present in person or by proxy, shall constitute a quorum at any
meeting of Preferred Securityholders.
If a quorum is present at a meeting, an
affirmative vote by the Holders of Preferred Securities present,
in person or by proxy, holding more than the lesser of (x) 66
2/3% of the then Outstanding Preferred Securities (based upon
their aggregate Liquidation Amount) held by the Holders of then
Outstanding Preferred Securities present, either in person or by
proxy, at such meeting and (y) 50% of the Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount) shall
constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
ARTICLE VI.Section 1Section 4. Voting Rights.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are
entitled to vote.
ARTICLE VI.Section 1Section 5. Proxies, etc. At any
meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted
at any meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of
the Trust as the Administrative Trustees may direct, for
verification prior to the time at which such vote shall be taken.
Only Securityholders of record shall be entitled to vote. When
Trust Securities are held jointly by several Persons, any one of
them may vote at any meeting in person or by proxy in respect of
such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust
Securities. A proxy purporting to be executed by or on behalf of
a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, or, if earlier, until eleven months after
it is sent and the burden of proving invalidity shall rest on the
challenger.
ARTICLE VI.Section 1Section 6. Securityholder Action by
Written Consent. Any action which may be taken by
Securityholders at a meeting may be taken without a meeting if
Securityholders holding more than a majority of all Outstanding
Trust Securities 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).
ARTICLE VI.Section 1Section 7. Record Date for Voting and
Other Purposes. For the purposes of determining the
Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record
date is not otherwise provided for in this Trust Agreement, or
for the purpose of any other action, the Administrative Trustees
may from time to time fix a date, not more than 90 days prior to
the date of any meeting of Securityholders or the payment of
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.
ARTICLE VI.Section 1Section 8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust
Agreement to be given, made or taken by Securityholders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders 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 signing
such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject
to Section 8.01) conclusive in favor of the Trustees, if made in
the manner provided in this Section 6.08.
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
acknowledgements 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 deems sufficient.
The ownership 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.
If any dispute shall arise between or among the
Securityholders and the Administrative Trustees with respect to
the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of
such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be
conclusive with respect to such matter.
ARTICLE VI.Section 1Section 9. Inspection of Records.
Subject to Section 5.07 concerning access to the list of
Securityholders, upon reasonable notice to the Administrative
Trustees and the Property Trustee, the other 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 of the Property
Trustee, the Delaware Trustee and the Depositor
ARTICLE VII.Section 1Section 1. Property Trustee. The
Property Trustee hereby represents and warrants for the benefit
of the Depositor and the Securityholders that:
(a) the Property Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing
under the laws of the State of New York;
(b) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations
under this Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Trust Agreement;
(c) 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 will not violate, conflict with
or constitute a breach of the Property Trustee's charter or by-
laws; and
(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 require 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 or New York law governing the banking or trust
powers of the Property Trustee.
ARTICLE VII.Section 1Section 2. Delaware Trustee. The
Delaware Trustee hereby represents and warrants for the benefit
of the Depositor and the Securityholders that:
(a) the Delaware Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing
under the laws of the State of Delaware;
(b) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations
under this Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Trust Agreement;
(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 will not violate, conflict with
or constitute a breach of the Delaware Trustee's charter or by-
laws; and
(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 require 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 or Delaware law governing the banking or trust
powers of the Delaware Trustee.
ARTICLE VII.Section 1Section 3. 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) under the laws of
the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by the
Property Trustee or the Delaware Trustee, as the case may be, of
this Trust Agreement.
ARTICLE VIII.
The Trustees
ARTICLE VIII.Section 1Section 1. Certain Duties and
Responsibilities.
(a) The duties and responsibilities of the Trustees shall be
as provided by this Trust Agreement and, in the case of the
Property Trustee, the Trust Indenture Act, and no implied
covenants or obligations shall be read into this Trust Agreement
against any of the Trustees. Notwithstanding the foregoing, no
provision of this Trust Agreement shall require any of the
Trustees to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if
it 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. Notwithstanding anything
contained in this Trust Agreement to the contrary, the duties and
responsibilities of the Property Trustee under this Trust
Agreement shall be subject to the protections, exculpations and
limitations on liability afforded to the Property Trustee under
the provisions of the Trust Indenture Act and, to the extent
applicable, Rule 3A-7 under the Investment Company Act or any
successor rule thereunder. Whether or not therein expressly so
provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to
the Trustees shall be subject to the provisions of this Section
8.01.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from
the income and proceeds from the Trust Property and only to the
extent that there shall be sufficient income or proceeds from the
Trust Property to enable the Property Trustee or 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 income and proceeds from the
Trust Property to the extent 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 8.01(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) All duties and responsibilities of the Property Trustee
contained in this Trust Agreement are subject to the following:
(i) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust
Property 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, the
Trust Indenture Act and, to the extent applicable, Rule 3a-7
under the Investment Company Act;
(ii) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or
sufficiency of the Trust Property or the payment of any taxes or
assessments levied thereon or in connection therewith;
(iii) 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. Money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account established by the Property
Trustee pursuant to this Trust Agreement and except to the extent
otherwise required by law; and
(iv) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
default or misconduct of the Administrative Trustees or the
Depositor.
ARTICLE VIII.Section 1Section 2. Certain Notices.
(a) Within five Business Days after the occurrence of
any Event of Default known to the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided
in Section 10.08, notice of any Event of Default to the
Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
(b) Within five Business Days after receipt of notice
of the Depositor's exercise of its right to defer the payment of
interest on the Debentures pursuant to the Subordinated
Indenture, an Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.08, notice of
such exercise to the Securityholders and the Property Trustee,
unless such exercise shall have been revoked.
ARTICLE VIII. Section 1 Section 3. Certain Rights of Property
Trustee. Subject to the provisions of Section 8.01 and except as
provided by law:
(i) the Property Trustee may conclusively 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, direction, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) if (A) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action or (B) in construing any of the
provisions in this Trust Agreement the Property Trustee finds the
same ambiguous or inconsistent with any other provisions
contained herein or (C) 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 written notice to the Depositor
requesting written instructions of the Depositor as to the course
of action to be taken. 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;
(iii) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any
action hereunder, the Property Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith
on its part, request and rely conclusively upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Administrative
Trustees;
(iv) the Property Trustee may consult with counsel of its
selection and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon;
(v) 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
(including reasonable attorneys' fees and expenses) and
liabilities which might be incurred by it in complying with such
request or direction;
(vi) 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, direction, consent, order, approval, bond, debenture,
note or other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine, unless requested in
writing to do so by one or more Securityholders, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and,
if the Property Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Depositor personally or by
agent or attorney;
(vii) 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, and the Property
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, 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;
(viii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Trust
Agreement;
(ix) the Property Trustee shall not be charged with
knowledge of any default or Event of Default with respect to the
Trust Securities unless either (1) a Responsible Officer of the
Property Trustee shall have actual knowledge of the default or
Event of Default or (2) written notice of such default or Event
of Default shall have been given to the Property Trustee by the
Depositor, the Administrative Trustees or by any Holder of the
Trust Securities;
(x) 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; and no permissive or discretionary power or authority
available to the Property Trustee shall be construed to be a
duty;
(xi) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Property Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Trust Agreement or adequate
indemnity against such risk or liability is not reasonably
assured to it;
(xii) 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 tax or securities)
(or any rerecording, refiling or registration thereof);
(xiii) 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; and
(xiv) 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 of Liquidation Amount of the Trust Securities as would
be entitled to direct the Property Trustee under the terms of
this Trust Agreement in respect of such remedies, rights or
actions, (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.
ARTICLE VIII.Section 1Section 4. 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 make no
representations as to the value or condition of the property of
the Trust or any part thereof or as to the title of the Trust
thereto or as to the security afforded thereby or hereby, or as
to the validity or genuineness of any securities at any time
pledged and deposited with any Trustees hereunder, nor as to the
validity or sufficiency of this Trust Agreement or the Trust
Securities. The Trustees shall not be accountable for the use or
application by the Trust of the proceeds of the Trust Securities
in accordance with Section 2.05.
ARTICLE VIII.Section 1Section 5. May Hold Securities. Any
Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee
of Trust Securities and, 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.
ARTICLE VIII.Section 1Section 6. Compensation; Fees; Indemnity.
The Depositor agrees
(1) to pay to the Trustees from time to time
reasonable compensation for all services rendered by the Trustees
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided
herein, to reimburse the Trustees upon request for all reasonable
expenses, disbursements and advances reasonably 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 its
negligence (gross negligence, in the case of any Administrative
Trustee), bad faith or willful misconduct; and
(3) to indemnify each Trustee for, and to hold
each Trustee harmless against, any and all loss, damage, claims,
liability or expense incurred without negligence (gross
negligence, in the case of any Administrative Trustee), bad faith
or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this Trust
Agreement, including the reasonable 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.
As security for the performance of the obligations
of the Depositor under this Section 8.06, each of the Trustees
shall have a lien prior to the Trust Securities upon all property
and funds held or collected by such Trustee as such, except funds
held in trust for the payment of Distributions on the Trust
Securities.
The provisions of this Section 8.06 shall survive
the termination of this Trust Agreement.
ARTICLE VIII.Section 1Section 7. Certain Trustees Required;
Eligibility.
(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 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 8.07(a), 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 8.07(a), it shall resign immediately
in the manner and with the effect hereinafter specified in this
Article VIII.
(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 such 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
that otherwise meets the requirements of applicable Delaware law
and that shall act through one or more persons authorized to bind
such entity.
ARTICLE VIII.Section 1Section 8. 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. The Subordinated Indenture and the Guarantee
Agreement shall be deemed to be specifically described in this
Trust Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE VIII.Section 1Section 9. Co-Trustees and Separate
Trustee.
Unless an Event of Default shall have occurred and
be continuing, at any time or times, for the purpose of meeting
the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the
time be located, the Depositor and the Property Trustee 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 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 8.09. 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 an Event of Default has
occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
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:
(1) 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 designated for such purpose hereunder, shall
be exercised, solely by such Trustees.
(2) 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.
(3) 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 8.09, 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 8.09.
(4) No co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission of
the Trustee, or any other such trustee hereunder.
(5) The Property Trustee shall not be liable by
reason of any act of a co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property
Trustee shall be deemed to have been delivered to each such co-
trustee and separate trustee.
ARTICLE VIII.Section 2 0. Resignation and Removal; Appointment
of Successor. No resignation or removal of any Trustee (as the
case may be, the "Relevant Trustee") and no appointment of a
successor Relevant Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor
Relevant Trustee in accordance with the applicable requirements
of Section 8.11.
Subject to the immediately preceding paragraph,
the Relevant Trustee may resign at any time by giving written
notice thereof to the Securityholders. If the instrument of
acceptance by a successor Relevant Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within
30 days after the giving of such notice of resignation, the
resigning Relevant Trustee may petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
An Administrative Trustee may be removed by the
Holder of Common Securities at any time. Unless a Debenture
Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware 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 Relevant
Trustee may be removed at such time by Act of the Securityholders
of a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities, delivered to the Relevant
Trustee (in its individual capacity and on behalf of the Trust).
If the Relevant Trustee shall resign, be removed
or become incapable of continuing to act as Relevant Trustee 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 Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and
the retiring Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If the Property Trustee or
Delaware Trustee shall resign, be removed or become incapable of
continuing to act as the Relevant Trustee at a time when a
Debenture Event of Default shall have occurred and be continuing,
the Preferred Securityholders, by Act of the Preferred
Securityholders of a majority in Liquidation Amount of the
Outstanding Preferred Securities delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees, and the Relevant Trustee shall comply with
the applicable requirements of Section 8.11. If no successor
Relevant Trustee shall have been so appointed by the Common
Securityholders or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any
Securityholder who has been a Securityholder for at least six
months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The retiring Relevant Trustee shall give notice of
each resignation and each removal of the Relevant Trustee and
each appointment of a successor Trustee to all Securityholders in
the manner provided in Section 10.08 and shall give notice to the
Depositor. Each notice shall include the name and address of the
successor Relevant Trustee and, in the case of the Property
Trustee, the address of its Corporate Trust Office.
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 incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled
by (i) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (ii) otherwise by the Depositor
(with the successor in each case being an individual who
satisfies the eligibility requirements for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in
Section 8.07). Additionally, notwithstanding the foregoing or
any other provision of this Trust Agreement, in the event the
Depositor reasonably believes that any Administrative Trustee who
is a natural person has become incompetent or incapacitated, the
Depositor, by notice to the remaining Trustees, may terminate the
status of such Person as an Administrative Trustee (in which case
the vacancy so created will be filled in accordance with the
preceding sentence).
ARTICLE VIII.Section 2Section 1. Acceptance of Appointment by
Successor. In case of the appointment hereunder of a successor
Relevant Trustee, the retiring Relevant Trustee and each
successor Trustee shall execute and deliver an amendment hereto
wherein each successor Relevant Trustee shall accept such
appointment and which (1) shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest
in, each successor Relevant Trustee all the rights, powers,
trusts and duties of the retiring Relevant Trustee with respect
to the Trust Securities and the Trust and (2) 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; but, on request of the
Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor
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 retiring Relevant Trustee 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 first or second 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 VIII.
ARTICLE VIII.Section 2Section 2. Merger, Conversion,
Consolidation or Succession to Business. Any Person into which
the Property Trustee or the Delaware Trustee or any
Administrative Trustee or any Trustee that is not a natural
person may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion
or consolidation to which such Relevant Trustee shall be a party,
or any Person succeeding to all or substantially all the
corporate trust business of such Relevant Trustee, shall be the
successor of such Relevant Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this
Article VIII, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE VIII.Section 2Section 3. Preferential Collection of
Claims Against Depositor or Trust. If and when the Property
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 shall be subject to the
provisions of the Trust Indenture Act regarding the collection of
claims against the Depositor or Trust (or any such other
obligor).
ARTICLE VIII.Section 2Section 4. Reports by Property Trustee.
(a) 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. Such of those reports as are required to be
transmitted by the Property Trustee pursuant to Section 313(a) of
the Trust Indenture Act shall be so transmitted within 60 days
after June 30 of each year, commencing June 30, 1997.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with
each stock exchange upon which the Trust Securities are listed,
with the Commission and with the Depositor. The Depositor will
notify the Property Trustee when any Trust Securities are listed
on any stock exchange.
ARTICLE VIII.Section 2Section 5. 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 (if
any) 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.
ARTICLE VIII.Section 2Section 6. 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 (including any covenants compliance with which
constitutes a condition precedent) 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 may be
given in the form of an Officers' Certificate.
ARTICLE VIII.Section 2Section 7. Number of Trustees.
(a) The number of Trustees shall be five, provided that the
Depositor, by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the
Delaware Trustee may be the same person.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to
Section 8.17(a), or if the number of Trustees is increased
pursuant to Section 8.17(a), a vacancy shall occur. The vacancy
shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee
shall not operate to dissolve, terminate or 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 8.10, the
Administrative Trustees in office, regardless of their number
(and notwithstanding any other provision of this Agreement),
shall have all the powers granted to the Administrative Trustees
and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
ARTICLE VIII.Section 2Section 8. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 2.07(a),
including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number 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.
ARTICLE VIII.Section 2Section 9. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Trust Agreement shall not be
liable to the Trust or to any other Covered Person for its 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 an Indemnified Person
otherwise existing at law or in equity (other than the duties
imposed on the Property Trustee under the Trust Indenture Act),
are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) Unless otherwise expressly provided herein and subject to
the provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any Holder of Trust
Securities, the Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation
and the benefits and burdens relating to such interests, any
customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution,
action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Trust Agreement or
any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or
otherwise; and
(c) Unless otherwise expressly provided herein and subject to
the provisions of the Trust Indenture Act, whenever in this Trust
Agreement an Indemnified Person is permitted or required to make
a decision
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider
such interests and factors as it reasonably desires, including
its own interests, and shall have no duty or obligation to give
any consideration to any interest of or factors affecting the
Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed
by this Trust Agreement or by applicable law.
Section 8.20 Voting. Except as otherwise provided in
this Trust Agreement, the consent or vote of the Administrative
Trustees shall be approved by not less than a majority of the
Administrative Trustees.
ARTICLE IX.
Termination, Liquidation and Merger
ARTICLE IX.Section 1Section 1. Termination Upon Expiration
Date. Unless terminated earlier, the Trust shall automatically
terminate on December 31, 2050 (the "Expiration Date") and the
Trust Property shall be distributed in accordance with Section
9.04.
ARTICLE IX.Section 1Section 2. Early Termination. Upon the
first to occur of any of the following events (such first
occurrence, an "Early Termination Event"):
(a) the occurrence of a Bankruptcy Event in
respect of, or the dissolution or liquidation of, the Depositor;
(b) the delivery of written direction to the
Property Trustee to terminate the Trust (which direction is
optional and wholly within the discretion of the Depositor);
(c) the redemption of all of the Preferred
Securities; and
(d) an order for judicial termination of the
Trust having been entered by a court of competent jurisdiction;
the Trust shall automatically terminate and the Trustees
shall take such action as is required by Section 9.04.
ARTICLE IX.Section 1Section 3. Termination. The respective
obligations and responsibilities of the Trust and the Trustees
created hereby shall terminate upon the latest to occur of the
following: (i) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to
Section 9.04, or upon the redemption of all of the Trust
Securities pursuant to Section 4.02 or 9.04(d), of all amounts
required to be distributed hereunder upon the final payment of
the Trust Securities; (ii) the payment of any expenses owed by
the Trust; and (iii) 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.
ARTICLE IX.Section 1Section 4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b)
or (d) of Section 9.02 occurs or upon the Expiration Date, after
satisfaction of creditors of the Trust, if any, as provided by
applicable law, the Trust shall be liquidated by the Property
Trustee as expeditiously as the Property Trustee determines to be
appropriate by distributing to each Securityholder a Like Amount
of Debentures, subject to Section 9.04(e). Notice of liquidation
shall be given by the Administrative Trustees 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 9.04(e) applies receive a Liquidation
Distribution, as the Administrative Trustees or the Property
Trustee shall deem appropriate.
(b) Except where Section 9.02(c) or Section 9.04(e) applies,
in order to effect any liquidation of the Trust hereunder, and
any resulting distribution of the Debentures to Securityholders,
the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the
Liquidation Date) and, either itself acting as exchange agent or
through the appointment of a separate exchange agent, shall
establish such procedures as it shall deem appropriate to effect
the distribution of Debentures in exchange for the Outstanding
Trust Securities Certificates.
(c) Except where Section 9.02(c) or Section 9.04(e) applies,
after any Liquidation Date, (i) the Trust Securities will no
longer be deemed to be Outstanding, (ii) certificates (or, at the
election of the Depositor, Debentures in global form, subject to
the provisions of the Subordinated Indenture) representing a Like
Amount of Debentures will be issued to Holders of Trust
Securities Certificates, upon surrender of such Trust Securities
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 stock 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 Certificates
until such Trust Securities Certificates are so surrendered (and
until such Trust Securities Certificates are so surrendered, no
payments or 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) If at any time, a Special Event shall occur and be
continuing, the Depositor has the right to redeem the Debentures
in whole but not in part and therefore cause a mandatory
redemption of all the Preferred Securities at the Redemption
Price within 90 days following the occurrence of such Special
Event. The Common Securities will be redeemed on a pro rata
basis with the Preferred Securities, except that if a Debenture
Event of Default has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
(e) In the event that, notwithstanding the other provisions of
this Section 9.04, whether because of an order for termination
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 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, if any, as
provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being
the "Liquidation Distribution"). If, upon any such dissolution,
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
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 or if a Debenture Event of
Default has not occurred solely by reason of a requirement that
time lapse or notice be given, the Preferred Securities shall
have a priority over the Common Securities.
ARTICLE IX.Section 1Section 5. Mergers, Consolidations,
Amalgamations or Replacements of the Trust.
The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except pursuant to this Trust Agreement. 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
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 any successor entity
will be required to register as an investment company under the
Investment Company Act and (viii) the Depositor or any permitted
successor or assignee 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
ARTICLE X.Section 1Section 1. Guarantee by the Depositor and
Assumption of Obligations. Subject to the terms and conditions
hereof, the Depositor irrevocably and unconditionally guarantees
to each Person to whom the Trust is now or hereafter becomes
indebted or liable (the "Beneficiaries"), and agrees to assume
liability for, the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As
used herein, "Obligations" means any indebtedness, expenses or
liabilities of the Trust, other than obligations of the Trust to
pay to Holders 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 guarantee and assumption 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.
ARTICLE X.Section 1Section 2. Limitation of Rights of
Securityholders. Except as provided in Section 9.02 hereof, the
death, incapacity, bankruptcy, termination, dissolution or
liquidation of any Person having an interest, beneficial or
otherwise, in a Trust Security 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.
ARTICLE X.Section 1Section 3. Amendment.
(a) This Trust Agreement may be amended from time to time by
the Trust (on approval of a majority of the Administrative
Trustees and the Depositor, without the consent of any
Securityholders), (i) to cure any ambiguity, correct or
supplement any provision herein or therein which may be
inconsistent with any other provision herein or therein, 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,
(ii) to modify, eliminate or add to any provisions of this Trust
Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States Federal income tax
purposes other than as a "grantor trust" and not as an
association taxable as a corporation at any time that any Trust
Securities are Outstanding or to ensure the Trust's exemption
from the status of an "investment company" under the Investment
Company Act, or (iii) to effect the acceptance of a successor
Relevant Trustee's appointment; provided, however, that, except
in the case of clause (ii), such action shall not adversely
affect in any material respect the interests of any
Securityholder and, in the case of clause (i), any amendments of
this Trust Agreement shall become effective when notice thereof
is given to the Securityholders.
(b) Except as provided in Sections 6.01(c) and 10.03(c), any
provision of this Trust Agreement may be amended by the
Administrative Trustees and the Depositor with (i) the consent of
Holders of Trust Securities representing not less than a majority
(based upon Liquidation Amounts) of the Outstanding Trust
Securities and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United
States Federal income tax purposes or the Trust's exemption from
status of an "investment company" under the Investment Company
Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with
Section 6.03 or 6.06), 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, (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such
payment on or after such date, or (iii) change the provisions of
this Section 10.03(c).
(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 Investment Company Act afforded by
Rule 3a-5 thereunder.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor and the Trustees,
this Trust Agreement may not be amended in a manner which imposes
any additional obligation on the Depositor or any Trustee.
(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) The Property Trustee is entitled to receive an Opinion of
Counsel as conclusive evidence that any amendment to this Trust
Agreement executed pursuant to this Section 10.03 is authorized
or permitted by, and conforms to, the terms of this Section
10.03, has been duly authorized by and lawfully executed and
delivered on behalf of the other requisite parties, and that it
is proper for the Property Trustee under the provisions of this
Section 10.03 to join in the execution thereof.
ARTICLE X.Section 1Section 4. Separability. In case any
provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
ARTICLE X.Section 1Section 5. Governing Law. This Trust
Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this
Trust Agreement and the Trust Securities shall be construed in
accordance with and governed by the laws of the State of Delaware
(without regard to conflict of laws principles).
ARTICLE X.Section 1Section 6. Successors. This Trust Agreement
shall be binding upon and shall inure to the benefit of any
successor to the Trust or the Relevant Trustees or any of them,
including any successor by operation of law.
ARTICLE X.Section 1Section 7. Headings. The Article and
Section headings are for convenience only and shall not affect
the construction of this Trust Agreement.
ARTICLE X.Section 1Section 8. Notice and Demand. 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 any Securityholder or the Depositor may be given or
served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in
each case, addressed, (i) 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 (ii) in the case of the Common Securityholder or the
Depositor, to Entergy Gulf States, Inc., 639 Loyola Avenue, New
Orleans, Louisiana 70113, Attention: Treasurer, facsimile no.
(504) 576-4455, with a copy to the Secretary, facsimile no. (504)
576-2106. 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, the
Delaware Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the
Trust) as follows: (i) with respect to the Property Trustee or
the Delaware Trustee, 101 Barclay Street, 21 West, New York, New
York 10286 marked "Attention: Corporate Trust Trustee
Administration" with a copy to: The Bank of New York (Delaware),
White Clay Center, Route 273, Newark, Delaware 19711 and (ii)
with respect to the Trust or the Administrative Trustees, at the
address above for notice to the Depositor, marked "Attention:
Administrative Trustees for Entergy Gulf States 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.
ARTICLE X.Section 1Section 9. Agreement Not to Petition. Each
of the Trustees and the Depositor agrees 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, it
shall not file, or join in the filing of, a petition against the
Trust under any bankruptcy, reorganization, arrangement,
insolvency, liquidation or other similar law (including, without
limitation, the United States Bankruptcy Code) (collectively,
"Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the
event the Depositor takes action in violation of this Section
10.09, the Property Trustee agrees, for the benefit of
Securityholders and at the expense of the Depositor, which
expense shall be paid prior to filing an answer, that it shall
file an answer with the bankruptcy court or otherwise properly
contest the filing of such petition by the Depositor against the
Trust or the commencement of such action and raise the defense
that the Depositor has agreed in writing not to take such action
and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Property Trustee or the
Trust may assert. The provisions of this Section 10.09 shall
survive the termination of this Trust Agreement.
ARTICLE X.Section 2 0. Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required or deemed to be part of
this Trust Agreement and shall, to the extent applicable, be
governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required or deemed to be
included in this Trust Agreement by any of the provisions of the
Trust Indenture Act, such required or deemed provision shall
control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as
equity securities representing interests in the Trust.
Section 10.11. 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
THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
Section 10.12. 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.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Trust Agreement
to be duly executed, all as of the day and year first above
written.
ENTERGY GULF STATES, INC.
By:__________________________
Name: William J. Regan, Jr.
Title: Vice President and Treasurer
THE BANK OF NEW YORK,
as Property Trustee
By:___________________________
Title: __________________
Name: _________________
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:___________________________
Title: __________________
Name: _________________
Steven C. McNeal
solely in his capacity
as Administrative Trustee
William J. Regan, Jr.
solely in his capacity
as Administrative Trustee
Frank Williford IV
solely in his capacity
as Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
ENTERGY GULF STATES CAPITAL I
THIS CERTIFICATE OF TRUST of Entergy Gulf States Capital I (the "Trust"),
dated as of , 199_, is being duly executed and filed by the
Undersigned, as trustees, to create a business trust under the Delaware
Business Trust Act (12 Del. C. 3801, et seq.).
1. Name. The name of the business trust being created
hereby is Entergy Gulf States 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), White Clay Center, Route
273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the only trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE) [_________________________],
not in its individual capacity not in his individual capacity
but solely as Trustee but solely as Trustee
By: By:
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By:
Name:
Title:
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-[ ]
Certificate videncing Common Securities
of
ENTERGY GULF STATES CAPITAL I
__% Common Securities
(liquidation amount $25 per Common Security)
Entergy Gulf States Capital I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
Entergy Gulf States, Inc. (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 5.10 of the Trust Agreement (as defined below) the
Common Securities are not transferable and any attempted transfer hereof
shall be void. The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities are set forth in,
and this certificate and the Common Securities represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust dated as of ______ __,
199_, 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.
<PAGE>
IN WITNESS WHEREOF, an Administrative Trustee of the Trust has executed this
certificate for and on behalf of the Trust this ____ day of _________, 199_.
ENTERGY GULF STATES CAPITAL I
By:
not in his (her) individual capacity, but
solely as Administrative Trustee
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ________ ___, 199_, between Entergy Gulf States,
Inc., a Texas corporation ("Entergy Gulf States"), and Entergy Gulf States
Capital I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to and receive Debentures from Entergy Gulf States and
to issue its __% 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 ______ __, 199_ as the same may be amended from
time to time (the "Trust Agreement");
WHEREAS, Entergy Gulf States will directly own all of the Common Securities
and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Entergy Gulf States hereby agrees shall
benefit Entergy Gulf States and which purchase Entergy Gulf States acknowledges
will be made in reliance upon the execution and delivery of this Agreement, E
ntergy Gulf States, including in its capacity as holder of the Common
Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Entergy Gulf States. Subject to the terms
and conditions hereof, Entergy Gulf States hereby irrevocably and
unconditionally guarantees the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the "Beneficiaries").
As used herein, "Obligations" means any indebtedness, expenses or liabilities
of the Trust, other than obligations of the Trust to pay to holders of any
Preferred Securities the amounts due such holders pursuant to the terms of
the Preferred Securities. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and
be of no further force and effect upon 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 Entergy Gulf States 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 1.03. Waiver of Notice. Entergy Gulf States hereby waives
notice of acceptance of this Agreement and of any Obligation to which it
applies or may apply, and Entergy Gulf States hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements
and duties of Entergy Gulf States 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, Entergy Gulf States with respect to the happening of any of the
foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this Agreement
directly against Entergy Gulf States and Entergy Gulf States waives any right
or remedy to require that any action be brought against the Trust or any other
person or entity before proceeding against Entergy Gulf States.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns, receivers,
trustees and representatives of Entergy Gulf States and shall inure to the
benefit of the Beneficiaries.
Section 2.02. 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 2.03. 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), to wit:
Entergy Gulf States Capital I
c/o Steven C. McNeal, Administrative Trustee
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No.: (504) 576-4455
Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No.: (504) 576-4455
Attention: Treasurer
Section 2.04 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.
ENTERGY GULF STATES, INC.
By:
Name:
Title:
ENTERGY GULF STATES CAPITAL I
By:
[_________________]
not in his individual capacity,
but solely as Administrative Trustee
<PAGE>
[Securities Depository Legend]
EXHIBIT D
Certificate Number Number of Preferred Securities
P- CUSIP NO.
Certificate Evidencing Preferred Securities
of
ENTERGY GULF STATES CAPITAL I
__% Cumulative Quarterly Income Preferred Securities, Series A
(liquidation amount $25 per Preferred Security)
Entergy Gulf States 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 the Entergy Gulf States Capital I %
Cumulative Quarterly Income Preferred Securities, Series A (liquidation amount
$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 5.04 or 5.11 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 ______ __, 199_, as the same may be amended from time to time (the "Trust
Agreement"). The holder of this certificate is entitled to the benefits of the
Guarantee Agreement of Entergy Gulf States, Inc., a Texas corporation, and The
Bank of New York, as guarantee trustee, dated as of ______ __, 199_ (the
"Guarantee") to the extent provided therein. The Trust will furnish a copy of
the Trust Agreement and the Guarantee to the holder of this certificate without
charge upon written request to the Trust at its principal place of business
or registered office.
Upon receipt of this certificate, the holder of this certificate is bound by
the Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative
Trustees of the Trust has executed this certificate for and on
behalf of the Trust.
Dated:
ENTERGY GULF STATES CAPITAL I
By:_____________________________________
[ ]
not in his (her) individual capacity,
but solely as
Administrative Trustee
Countersigned by:
_________________________
Transfer Agent
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
(Insert assignee's social security or tax identification number)
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
(Insert address and zip code of assignee)
of the Preferred Securities represented by this Preferred Securities
Certificate and irrevocably appoints
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
attorney to transfer such Preferred Securities Certificate on the
books of the Trust. The attorney may substitute another to act for him or
her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Pre
ferred Securities Certificate)
Signature:________________________
(Sign exactly as your name appears on the other side of this Pre
ferred Securities Certificate)
Exhibit 4.08
GUARANTEE AGREEMENT
Between
Entergy Gulf States, Inc.
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
______ __, 199_
<PAGE>
CROSS-REFERENCE TABLE
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a) 4.01(a)
310(b) 4.01(c),2.08
310(c) Inapplicable
311(a) 2.02(b)
311(b) 2.02(b)
311(c) Inapplicable
312(a) 2.02(a)
312(b) 2.02(b)
313 2.03
314(a) 2.04
314(b) Inapplicable
314(c) 2.05
314(d) Inapplicable
314(e) 1.01,
2.05, 3.02
314(f) 2.01, 3.02
315(a) 3.01(d)
315(b) 2.07
315(c) 3.01
315(d) 3.01(d)
316(a) 5.04(a),2.06
316(b) 5.03
316(c) 2.02
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.01(b)
318(b) 2.01
318(c) 2.01(a)
_____________
* 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 ("Guarantee Agreement"), dated
as of ______ __, 199_, is executed and delivered by Entergy Gulf
States, Inc., a Texas corporation (the "Guarantor"), and The Bank
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 Entergy Gulf
States Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of ______ __, 199_
between the Trustees of the Issuer named therein, Entergy Gulf
States, Inc., as Depositor, and the several Holders (as defined
therein), the Issuer is issuing as of the date hereof ___________
of its __% Cumulative Quarterly Income Preferred Securities,
Series A ($___________ in aggregate liquidation amount) (the
"Preferred Securities") representing preferred undivided
beneficial ownership interests in the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Preferred Securities are to 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), are to be used to purchase the Debentures (as defined in
the Trust Agreement) which will be deposited with The Bank of New
York, as Property Trustee under the Trust Agreement, as trust
assets; and
WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and
unconditionally agree, to the extent set forth herein, to pay to
the Holders 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 the 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.
I DEFINITIONS
I.11 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. 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 ownership interests in the assets of
the Issuer.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Guarantee
Agreement.
"Guarantee Payments" shall mean 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 that are required to be paid on such Preferred
Securities but only if and to the extent that the Property
Trustee has available in the Payment Account funds sufficient to
make such payment, (ii) the redemption price (the "Redemption
Price"), and all accumulated and unpaid Distributions to the date
of redemption, with respect to the Preferred Securities called
for redemption by the Issuer but only if and to the extent that
the Property Trustee has available in the Payment Account funds
sufficient to make such payment, (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with a redemption of all of the
Preferred Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions
on the Preferred Securities to the date of payment, and (b) the
amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (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" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities then
outstanding; 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 or any Affiliate of the
Guarantor.
"Indenture" means the Indenture dated as of ______ __,
199_, among the Guarantor (the "Debenture Issuer") and The Bank
of New York, as trustee, pursuant to which the Debentures are
issued.
"Majority in liquidation amount of the Preferred
Securities" means a vote by Holders, voting separately as a
class, of more than 50% of the aggregate liquidation amount of
all Preferred Securities.
"Officers' Certificate" means a certificate signed by
the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the
Guarantor, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" means, with respect to the
Guarantee Trustee, 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.
"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
II TRUST INDENTURE ACT
II.11 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required or deemed to be part of
this Guarantee Agreement and shall, to the extent applicable, be
governed by such provisions; and
(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.
II.12 Lists of Holders of Preferred Securities.
(a) The Guarantor shall furnish or cause to be furnished to
the Guarantee Trustee (a) semiannually, not later than December
31 and June 30 in 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; provided that, the
Guarantor shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most
recent List of Holders given to the Guarantee Trustee by the
Guarantor. 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) of the Trust Indenture Act, subject to the
provisions of Section 311(b) and Section 312(b) of the Trust
Indenture Act.
II.13 Reports by the Guarantee Trustee. Within 60 days
after December 31 of each year, commencing December 31, 199_, the
Guarantee Trustee shall provide to the Holders such reports, if
any, as are required by Section 313(a) of the Trust Indenture Act
in the form and in the manner provided by Section 313(a) of the
Trust Indenture Act. The Guarantee Trustee shall also comply
with the requirements of Sections 313(b), (c) and (d) of the
Trust Indenture Act.
II.14 Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee such documents,
reports and information as required by Section 314 (if any) 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.
II.15 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent provided for
in this Guarantee Agreement as and to the extent required by
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 may be given in the form of
an Officers' Certificate.
II.16 Events of Default; Waiver. The Holders of a
Majority in liquidation amount of Preferred Securities may, by
vote, on behalf of all 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.
II.17 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, 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 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.
II.18 Conflicting Interests. The Trust Agreement and
the Indenture 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.
III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
III.11 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 or any rights
hereunder to any Person except a Holder exercising his or her
rights pursuant to Section 5.04 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, 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) The Guarantee Trustee, prior to 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 or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06), 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.
(c) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof 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 or such Responsible Officer 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 a
Majority in liquidation amount 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.
III.12 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.01:
(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
Officers' Certificate;
(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 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
Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the written advice or opinion of such counsel with
respect to legal matters 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 accordance with such
advice or opinion; such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its employees;
the Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.02(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 reasonably
believed by it to be genuine, 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 agents or attorneys, and the Guarantee
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;
(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
(1) may request instructions from the Holders, (2) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (3) shall be protected
in acting in accordance with such instructions; and
(ix) the Guarantee Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Guarantee.
(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.
IV GUARANTEE TRUSTEE
IV.11 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 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
Person permitted by the Securities and Exchange Commission to act
as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), 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
supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee
shall immediately resign in the manner and with the effect set
out in Section 4.03(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.
IV.12 Compensation and Reimbursement.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Guarantee
Trustee shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Guarantee Trustee in accordance with the provisions of
this Guarantee (including the reasonable compensation and
expenses of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from
and against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based upon the income
of the Guarantee Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance of the 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 its powers or duties hereunder.
As security for the performance of the obligations of
the Guarantor under this Section, the Guarantee Trustee shall
have a lien prior to the Preferred Securities upon all the
property and funds held or collected by the Guarantee Trustee as
such, except funds held in trust for the payment of principal of,
and premium (if any) or interest on, particular obligations of
the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the
termination of this Guarantee Agreement.
IV.13 Appointment, Removal and Resignation of Guarantee Trustee.
(a) Subject to Section 4.03(b), unless an Event of Default
shall have occurred and be continuing, 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 to office shall hold
office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.03 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Guarantee Trustee may
petition 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.
(e) The Guarantor shall give notice of each resignation and
each removal of the Guarantee Trustee and each appointment of a
successor Guarantee Trustee to all Holders in the manner provided
in Section 8.03 hereof. Each notice shall include the name of
the successor Guarantee Trustee and the address of its Corporate
Trust Office.
V GUARANTEE
V.11 Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore
paid by 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.
V.12 Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of this 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 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.
V.13 Obligations Not Affected. The obligation of the
Guarantor to make the Guarantee Payments 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, 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 (other than an
extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from
the extension of any interest payment period on the Debentures
permitted by the Indenture);
(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 5.03 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 consent of, the Guarantor with respect to the happening of
any of the foregoing.
V.14 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 amount 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 Issuer or any other person or entity.
V.15 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).
V.16 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; 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 of Guarantee Payments 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.
V.17 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 5.03.
VI SUBORDINATION
VI.11 Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to all Senior Debt
of the Guarantor (which is defined as all obligations (other than
non-recourse obligations and the indebtedness issued under the
Indenture) of, or guaranteed or assumed by, the Guarantor for
borrowed money, including both senior and subordinated
indebtedness for borrowed money (other than the Debentures), or
for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Guarantor
and its subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time, or
evidenced by bonds, debentures, notes or other similar
instruments, and in each case, amendments, renewals, extensions,
modifications and refundings of any such indebtedness or
obligations, whether existing as of the date of the Indenture or
subsequently incurred by the Guarantor unless, in the case of any
particular indebtedness, obligation, renewal, extension or
refunding, the instrument creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension or refunding is not superior in
right of payment to or is pari passu with the Debentures;
provided that the Guarantor's obligations under this Guarantee or
any guarantee issued by the Guarantor on behalf of the holders of
Preferred Securities issued by entities affiliated with the
Guarantor similar to the Issuer shall not be deemed to be Senior
Debt of the Guarantor), and (ii) pari passu with any similar
guarantee now or hereafter issued by the Guarantor on behalf of
the holders of preferred securities issued by entities affiliated
with the Guarantor similar to the Issuer. Nothing in this
Section 6.01 shall apply to claims of, or payments to, the
Guarantee Trustee under or pursuant to Section 4.02 hereof.
VII TERMINATION
VII.11 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 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 the Preferred Securities or
under this Guarantee Agreement.
VIII MISCELLANEOUS
VIII.11 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 Eleven 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.
VIII.12 Amendments. This Guarantee Agreement may be
amended only by an instrument in writing entered into by the
Guarantor and the Guarantee Trustee. Except with respect to any
changes which do not materially adversely affect the rights of
Holders (in which case no consent of 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 aggregate
liquidation amount of all the outstanding Preferred Securities.
The provisions of Article VI of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval.
Nothing herein contained shall be deemed to require that the
Guarantee Trustee enter into any amendment of this Guarantee
Agreement.
VIII.13 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 of the Preferred Securities:
Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No: (504) 576-4455
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustee's)
address set forth below or such other address as the
Administrative Trustees on behalf of the Issuer may give notice
of to the Holders:
Entergy Gulf States Capital I
c/o Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Facsimile No: (504) 576-4455
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set
forth below or such other address as the Guarantee Trustee may
give notice of to the Holders of the Preferred Securities:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(d) 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.
VIII.14 Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and, subject to Section 3.01(a), is
not separately transferable from the Preferred Securities.
VIII.15 Interpretation. In this Guarantee Agreement,
unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings
assigned to them in Section 1.01;
(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.
VIII.16 Governing Law. This Guarantee Agreement shall be
governed by and construed and interpreted in accordance with the
laws of the State of New York.
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.
Entergy Gulf States, Inc.
By:
Name: William J. Regan, Jr.
Title: Vice President and Treasurer
The Bank of New York,
as Guarantee Trustee
By:
Name:
Title:
Exhibit 4.09
Entergy Gulf States, Inc.
OFFICER'S CERTIFICATE
William J. Regan, Jr. the Vice President and Treasurer of
Entergy Gulf States, Inc. (the "Company"), pursuant to the
authority granted in the Board Resolutions of the Company dated
_______________, 199_, and Sections 201 and 301 of the Indenture
defined herein, does hereby certify to The Bank of New York (the
"Trustee"), as Trustee under the Indenture of the Company (For
Unsecured Subordinated Debt Securities relating to Trust
Securities) dated as of _____________, 199_ (the "Indenture")
that:
1. The securities of the first series to be issued under the
Indenture shall be designated "__% Junior Subordinated Deferrable
Interest Debentures, Series A, Due _______________________, ____"
(the "Debentures of the First Series"). The Debentures of the
First Series are to be issued in the name of The Bank of New
York, as property trustee (the "Property Trustee"), pursuant to
the Amended and Restated Trust Agreement dated as of
____________, 199_ (the "Trust Agreement") relating to Entergy
Gulf States Capital I, a Delaware statutory business trust (the
"Trust"), on behalf of the Trust. All capitalized terms used in
this certificate which are not defined herein but are defined in
the Indenture shall have the meanings set forth in the Indenture;
2. The Debentures of the First Series shall be limited in
aggregate principal amount to $__________ at any time
Outstanding, except as contemplated in Section 301(b) of the
Indenture;
3. The Debentures of the First Series shall mature and the
principal shall be due and payable together with all accrued and
unpaid interest thereon on _____________, ____;
4. The Debentures of the First Series shall bear interest from,
and including, the date of original issuance, at the rate of __%
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 _______________, 199_. The amount of
interest payable for any such period will be computed on the
basis of a 360-day year of twelve 30-day months. Interest on the
Debentures of the First Series will accrue from, and including,
the date of original issuance and will accrue to, and including,
the first Interest Payment Date, and thereafter will accrue from,
and excluding, the last Interest Payment Date through which
interest has been paid or duly provided for. In the event that
any Interest Payment Date is not a Business Day, then payment of
the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of 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
Interest Payment Date;
5. Each installment of interest on a Debenture of the First
Series shall be payable to the Person in whose name such
Debenture of the First Series is registered at the close of
business on the Business Day next preceding the corresponding
Interest Payment Date (the "Regular Record Date") for the
Debentures of the First Series; provided, however, that if the
Debentures of the First Series are held neither by the Property
Trustee, for the benefit of the Trust, nor by a securities
depositary, the Company shall have the right to change the
Regular Record Date by one or more Officer's Certificates. Any
installment of interest on the Debentures of the First Series not
punctually paid or duly provided for shall forthwith cease to be
payable to the Holders of such Debentures of the First Series on
such Regular Record Date, and may be paid to the Persons in whose
name the Debentures of the First Series are 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 of
such Defaulted Interest and Special Record Date shall be given to
the Holders of the Debentures of the First Series 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
of the First Series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the
Indenture;
6. The principal and each installment of interest on the
Debentures of the First Series shall be payable at, and
registration and registration of transfers and exchanges in
respect of the Debentures of the First Series may be effected at,
the office or agency of the Company in The City of New York;
provided that payment of interest may be made at the option of
the Company by check mailed to the address of the persons
entitled thereto under the Indenture. Notices to, or demands
upon, the Company in respect of the Debentures of the First
Series may be served at the office or agency of the Company in
The City of New York. The Trustee will initially be the agency of
the Company for such service of notices and demands; provided,
however, that the Company reserves the right to change, by one or
more Officer's Certificates any such office or agency. The
Company will be the Security Registrar and the Paying Agent for
the Debentures of the First Series;
7. The Debentures of the First Series will be redeemable on or
after _________, ____ at the option of the Company, at any time
and from time to time, in whole or in part, at a redemption price
equal to 100% of the principal amount of the Debentures of the
First Series being redeemed, together with any accrued and unpaid
interest, including Additional Interest, if any, to the
redemption date, upon not less than 30 nor more than 60 days'
notice given as provided in the Indenture. The Company, however,
may not redeem less than all Outstanding Debentures of the First
Series unless the conditions specified in the last paragraph of
this item are met;
The Debentures of the First Series will also be
redeemable at the option of the Company upon the
occurrence and during the continuation of a Tax Event
or an Investment Company Event in whole but not in part
on any date within 90 days of the occurrence of such
Tax Event or an Investment Company Event, at a
redemption price equal to 100% of the principal amount
of the Debentures of the First Series then Outstanding
plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date,
upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture. "Tax Event" means
the receipt by the Trust or the Company of an opinion
of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change
(including any announced prospective change) in, the
laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority
thereof or therein affecting taxation, or as a result
of any official administrative pronouncement or
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 original issuance of the __%
Cumulative Quarterly Income Preferred Securities,
Series A (the "Preferred Securities") under the Trust
Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the
date thereof, subject to United States Federal income
tax with respect to income received or accrued on the
Debentures of the First Series, (ii) interest payable
by the Company on the Debentures of the First Series is
not, or within 90 days of the date thereof will not be,
deductible by the Company, 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
thereof, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Investment Company Event" means 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 to the effect that the Trust is or
will be considered an "investment company" that is
required to be registered under the Investment Company
Act of 1940, as amended, which change in law becomes
effective on or after the date of original issuance of
the Preferred Securities.
The Company may not redeem less than all the
Debentures of the First Series Outstanding unless all
accrued and unpaid interest (including any Additional
Interest) has been paid in full on all Debentures of
the First Series Outstanding under the Indenture for
all quarterly interest periods terminating on or prior
to the date of redemption;
8. So long as any Debentures of the First Series are
Outstanding, the failure of the Company to pay interest on any
Debentures of the First Series within 60 days after the same
becomes due and payable (whether or not payment is prohibited by
the provisions of Article Fifteen of the Indenture) shall
constitute an Event of Default; provided, however, that a valid
extension of the interest payment period by the Company as
contemplated in Section 311 of the Indenture and paragraph (9) of
this Certificate shall not constitute a failure to pay interest
for this purpose;
9. Pursuant to Section 311 of the Indenture, so long as the
Company is not in default under the Indenture the Company shall
have the right, at any time and from time to time during the term
of the Debentures of the First Series, to extend the interest
payment period to a period not exceeding 20 consecutive quarters
from the last Interest Payment Date to which interest was paid in
full (an "Extension Period") during which period interest will be
compounded quarterly. Prior to the termination of the Extension
Period, the Company may, and at the end of the Extension Period
the Company shall, pay all interest accrued and unpaid (together
with interest thereon at the annual rate of __% to the extent
permitted by applicable law). Upon such payment in full, such
Extension Period shall terminate. However, during any such
Extension Period, the Company may not (i) declare or pay any
dividends or distributions, on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital
stock, or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any
indebtedness that is pari passu with or junior in interest to the
Debentures of the First Series (including other Securities issued
under the Indenture), or make any guarantee payments with respect
to the foregoing (other than (a) dividends or distributions in
common stock of the Company and (b) payment under any Guarantee).
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 thereof shall not exceed 20 consecutive
quarters or extend beyond the maturity date of the Debentures of
the First Series. 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. The
Company shall give the Property Trustee, the administrative
trustees named in the Trust Agreement and the Trustee 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 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 payment of interest accrued on the
Debentures of the First Series on any date during an Extension
Period and the amount of such payment. The Company shall give
such notice at least one Business Day prior to the earlier of (i)
the date distributions on the Preferred Securities are payable
and (ii) the date the administrative trustees are required to
give notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred
Securities of the record date or the date such distributions are
payable, but in any event not less than one Business Day prior to
such record date;
10. In the event that, at any time subsequent to the initial
authentication and delivery of the Debentures of the First
Series, the Debentures of the First Series are to be held by a
securities depositary, the Company may at such time establish the
matters contemplated in clause (r) in the second paragraph of
Section 301 of the Indenture in an Officer's Certificate
supplemental to this Certificate;
11. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the First Series;
provided, however, that the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection with the exchange or transfer;
12. The Debentures of the First Series shall rank pari passu
with the securities issued pursuant to the Indenture (For
Unsecured Subordinated Debt Securities) dated as of ________,
199_ between the Company and the Trustee;
13. The Debentures of the First Series shall have such other
terms and provisions as are provided in the form set forth in
Exhibit A hereto, and shall be issued in substantially such form;
14. In the event that the Debentures of the First Series are
distributed to holders of the Preferred Securities upon the
liquidation of the Trust, the Company will use its best efforts
to list the Debentures of the First Series on the New York Stock
Exchange or on such other exchange or organization as the
Preferred Securities are then listed or traded;
15. If the Company shall make any deposit of money and/or
Government Obligations with respect to any Debentures of the
First Series, or any portion of the principal amount thereof, as
contemplated by Section 701 of the Indenture, the Company shall
not deliver an Officer's Certificate described in clause (z) in
the first paragraph of said Section 701 unless the Company shall
also deliver to the Trustee, together with such Officer's
Certificate, either:
(a) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Debentures of the First
Series, shall assume the obligation (which shall be
absolute and unconditional) to irrevocably deposit with
the Trustee or Paying Agent such additional sums of
money, if any, or additional Government Obligations
(meeting the requirements of Section 701), if any, or
any combination thereof, at such time or times, as
shall be necessary, together with the money and/or
Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and
interest due and to become due on such Debentures of
the First Series or portions thereof, all in accordance
with and subject to the provisions of said Section 701;
provided, however, that such instrument may state that
the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery
to the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation
thereof; or
(b) an Opinion of Counsel to the effect that
the Holders of such Debentures of the First Series, or
portions of the principal amount thereof, will not
recognize income, gain or loss for United States
federal income tax purposes as a result of the
satisfaction and discharge of the Company's
indebtedness in respect thereof and will be subject to
United States federal income tax on the same amounts,
at the same times and in the same manner as if such
satisfaction and discharge had not been effected;
16. The undersigned has read all of the covenants and conditions
contained in the Indenture relating to the issuance of the
Debentures of the First Series and the definitions in the
Indenture relating thereto and in respect of which this
certificate is made;
17. The statements contained in this certificate are based upon
the familiarity of the undersigned with the Indenture, the
documents accompanying this certificate, and upon discussions by
the undersigned with officers and employees of the Company
familiar with the matters set forth herein;
18. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to express an
informed opinion whether or not such covenants and conditions
have been complied with; and
19. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including any
covenants compliance with which constitutes a condition
precedent) to the authentication and delivery of the Debentures
of the First Series requested in the accompanying Company Order
have been complied with.
IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate this ____ day of ___________, 199_.
William J. Regan, Jr.
Vice President and Treasurer
<PAGE>
No. R-1
EXHIBIT A
ENTERGY GULF STATES, INC.
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES, SERIES A,
DUE __________________, ____
ENTERGY GULF STATES, INC., a corporation duly organized and
existing under the laws of the State of Texas (herein referred to
as the "Company", which term includes any successor Person under
the Indenture), for value received, hereby promises to pay to
, or registered
assigns, the principal sum of
Dollars on __________________, and to
pay interest on said principal sum, from and including,
_________, 199_ or from, and excluding, the most recent Interest
Payment Date through which interest has been paid or duly
provided for, quarterly on March 31, June 30, September 30 and
December 31 of each year, commencing ____________, 199_ at the
rate of __% per annum until the principal hereof is paid or made
available for payment. 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. Interest on the Securities of this
series will accrue from, and including, _________, 199_ through
the first Interest Payment Date, and thereafter will accrue,
from, and excluding, the last Interest Payment Date through which
interest has been paid or duly provided for. In the event that
any Interest Payment Date is not a Business Day, then payment of
the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest
or other payment in respect of 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
Interest Payment Date. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date
for such interest, which shall be the Business Day next preceding
such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture referred to on the
reverse hereof.
Payment of the principal of and premium, if any, and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
ENTERGY GULF STATES, INC.
By:______________________
ATTEST:
____________________________
CERTIFICATE OF AUTHENTICATION
Dated: _____ __, 199_
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:_____________________________
Authorized Signatory
<PAGE>
REVERSE OF __% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE, SERIES A, DUE ____________, ____
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture,
dated as of ________, 199_ (herein, together with any amendments
thereto, called the "Indenture", which term shall have the
meaning assigned to it in such instrument), between the Company
and The Bank of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture,
including the Board Resolutions and Officer's Certificate filed
with the Trustee on _________, 199_ creating the series
designated on the face hereof, for a statement of the respective
rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and
of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal
amount to $___________.
The Securities of this series are subject to redemption
upon not less than 30 nor more than 60 days' notice by mail, at
any time on or after _________, ____ as a whole or in part, at
the election of the Company, at a redemption price equal to 100%
of the principal amount, together in the case of any such
redemption with accrued and unpaid interest, including Additional
Interest, if any, to, but not including, the redemption date, but
interest installments whose Stated Maturity is on or prior to
such redemption date will be payable to the Holder of such
Security, or one or more Predecessor Securities, of record at the
close of business on the related Regular Record Date referred to
on the face hereof, all as provided in the Indenture.
The Securities of this series will also be redeemable
at the option of the Company if a Tax Event or an Investment
Company Event shall occur and be continuing, in whole but not in
part on any date within 90 days of the occurrence of such Tax
Event or Investment Company Event, at a redemption price equal to
100% of the principal amount of the Securities of this series
then Outstanding plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date, upon not
less than 30 nor more than 60 days' notice given as provided in
the Indenture. "Tax Event" means the receipt by Entergy Gulf
States Capital I, a Delaware statutory business trust (the
"Trust") or the Company of an opinion of counsel experienced in
such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein
affecting taxation, or as a result of any official administrative
pronouncement or 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
original issuance of the __% Cumulative Quarterly Income
Preferred Securities, Series A (the "Preferred Securities") under
the Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date
thereof, subject to United States Federal income tax with respect
to income received or accrued on the Securities of this series,
(ii) interest payable by the Company on the Securities of this
series not, or within 90 days of the date thereof will not be,
deductible by the Company, 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 thereof, subject to more than a de
minimis amount of other taxes, duties or other governmental
charges. "Investment Company Event" means 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 to the effect that
the Trust is or will be considered an "investment company" that
is required to be registered under the Investment Company Act of
1940, as amended, which change in law becomes effective on or
after the date of original issuance of the Preferred Securities.
In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance
hereof, 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
said provisions.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of not less
than a majority in aggregate principal amount of the Securities
of all series at the time Outstanding in respect of which an
Event of Default shall have occurred and be continuing shall have
made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
So long as the Company is not in default under the
Indenture the Company has the right, at any time and from time to
time during the term of the Securities of this series, to extend
the interest payment period to a period not exceeding 20
consecutive quarters (an "Extended Interest Payment Period").
Prior to the termination of the Extended Interest Payment Period
the Company may, and at the end of such Extended Interest Payment
Period the Company shall, pay all interest then accrued and
unpaid (together with interest thereon at the annual rate of __%
to the extent permitted by applicable law) and upon such payment
in full, such Extended Interest Payment Period shall terminate.
However, during such Extended Interest Payment Period the Company
shall not declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, or make any payment of
principal on, interest or premium if any, on or repay, repurchase
or redeem any indebtedness that is pari passu with or junior in
interest to the Securities of this series (including other
Securities issued under the Indenture), or make any guarantee
payments with respect to the foregoing (other than dividends or
distributions in common stock of the Company and payments under
any Guarantee). Prior to the termination of any such Extended
Interest Payment Period, the Company may further extend the
interest payment period, provided that such Extended Interest
Payment Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters or
extend beyond the Stated Maturity of the Securities of this
series. Upon termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest
then due, the Company may elect to begin a new Extended Interest
Payment Period, subject to the above requirements. No interest
shall be due and payable during an Extended Interest Payment
Period, except at the end thereof. The Company shall give the
Property Trustee, the administrative trustees named in the Trust
Agreement and the Trustee written notice of (i) any election by
the Company to initiate an Extended Interest Payment Period and
the duration thereof, (ii) any election by the Company to extend
an Extended Interest Payment Period beyond the date on which that
Extended Interest Payment Period is then scheduled to terminate
and the duration of such extension and (iii) any election by the
Company to make a full payment of interest accrued on the
Securities of this series on any date during an Extended Interest
Payment Period. The Company shall give such notice at least one
Business Day prior to the earlier of (i) the date distributions
on the Preferred Securities are payable and (ii) the date the
Administrative Trustees are required to give notice to the New
York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities of the
record date or the date such distributions are payable, but in
any event not less than one Business Day prior to such record
date.
The Securities of this series are issuable only in
registered form without coupons in denominations of $25 and any
integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of
authorized denominations, as requested by the Holder surrendering
the same.
As provided in the Indenture, the Company shall not be
required to make transfers or exchanges of Securities of this
series for a period of 15 days immediately preceding the date of
the mailing of any notice of redemption of such Securities and
the Company shall not be required to make transfers or exchanges
of any Securities of this series so selected for redemption in
whole or in part (except the unredeemed portion of thereof).
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
Exhiit 5.01 and 23.04
December 13, 1996
Entergy Gulf States, Inc.
350 Pine Street
Beaumont, Texas 77701
Ladies and Gentlemen:
I refer to the joint Registration Statement on Form S-2 of
Entergy Gulf States, Inc. (the "Company") and Entergy Gulf States
Capital I (the "Trust"), including the exhibits thereto (the
"Registration Statement"), to be filed with the Securities and
Exchange Commission (the "Commission") on or about the date
hereof for the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of (i) Preferred Securities (the
"Preferred Securities") of the Trust in an aggregate liquidation
preference of $85,000,000 to be offered in an underwritten public
offering; (ii) Junior Subordinated Debentures (the "Debentures")
of the Company to be issued pursuant to the terms of the
Indenture from the Company to The Bank of New York, as trustee
(the "Indenture"), to be issued and sold by the Company to the
Trust; and (iii) Guarantee of the Company with respect to the
Preferred Securities (the "Guarantee") to be issued pursuant to
the terms of guarantee agreement between the Company and The Bank
of New York, as trustee (the "Guarantee Agreement").
I am of the opinion that the Company is a corporation duly
organized and validly existing under the laws of the State of
Texas and is duly authorized to conduct business as a foreign
corporation in the State of Louisiana.
I am of the opinion that all action necessary to make valid
and legal the proposed issuance and sale of the Debentures and
the Guarantee of the Company will have been taken when:
(a) the Registration Statement, as it may be amended, shall
have become effective in accordance with the applicable
provisions of the Securities Act, and the Indenture and the
Guarantee Agreement shall have been qualified under the
Trust Indenture Act of 1939, as amended;
(b) an appropriate order or orders shall have been issued
by the Commission under the Public Utility Holding Company
Act of 1935, as amended, with respect to the related
Application-Declaration on Form U-1 (File No. 70-8721), as
amended and as it may be further amended, authorizing
the issuance and sale of the Debentures and the issuance of
the Guarantee;
(c) all appropriate action shall have been taken by the
Board of Directors of the Company for the purpose of
authorizing the issuance and sale of the Debentures and the
Guarantee;
(d) the proposed Indenture and the Guarantee Agreement
shall have been duly executed and delivered;
(e) the specific terms of the Debentures and the Guarantee
shall have been determined by supplemental indenture, board
resolution or officer's certificate; and
(f) the Debentures and the Guarantee shall have been
appropriately issued and delivered for the consideration
contemplated by, and otherwise in conformity with, the acts,
proceedings and documents referred to above.
I am further of the opinion that when the foregoing steps
have been taken, the Debentures and the Guarantee will be legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms, in each case, except as
limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights and general equitable principles.
This opinion does not pass upon the matter of compliance with
"blue sky" laws or similar laws relating to the sale or
distribution of the Debentures and Guarantee by the underwriters.
I am a member of the bar of the States of Texas and
Louisiana and the Commonwealth of Virginia and do not hold myself
out as an expert on the laws of any other state. However, I have
only examined the laws of the States of Texas and Louisiana for
purposes of rendering this opinion. As to all matters of New
York law, I have relied upon an opinion of even date addressed to
you by Reid & Priest LLP, special counsel to the Company. I
consent to the reliance of Reid & Priest LLP upon this opinion
insofar as it relates to matters of Texas law.
I hereby consent to the use of this opinion as an exhibit to
the Registration Statement, as it may be amended from time to
time, and consent to such references to me as may be made in such
Registration Statement and in the Prospectus constituting a part
thereof.
Very truly yours,
/s/ Laurence M. Hamric
Laurence M. Hamric
General Attorney -
Corporate and Securities
Exhibit 5.02 and 23.05
[Letterhead of Richards, Layton & Finger]
December 13, 1996
Entergy Gulf States Capital I
c/o Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
Re: Entergy Gulf States Capital I
Ladies and Gentlemen:
We have acted as special Delaware counsel for
Entergy Gulf States, Inc., a Texas corporation (the
"Company"), and Entergy Gulf States Capital I, a Delaware
business trust (the "Trust"), in connection with the matters
set forth herein. At your request, this opinion is being
furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
a) The Certificate of Trust of the Trust, dated as of
November 27, 1996 (the "Certificate"), as filed in the office
of the Secretary of State of the State of Delaware (the
"Secretary of State") on December 2, 1996;
b) The Trust Agreement of the Trust, dated as of
December 2, 1996, among the Company, as Depositor, and the
trustees of the Trust named therein;
c) The Registration Statement (the "Registration
Statement") on Form S-2, including a preliminary prospectus
(the "Prospectus") relating to the __% Cumulative Quarterly
Income Preferred Securities of the Trust, Series A,
representing preferred undivided beneficial interests in the
assets of the Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as proposed to be
filed by the Company and the Trust with the Securities and
Exchange Commission on or about December 13, 1996;
d) A form of Amended and Restated Trust Agreement of
the Trust, to be entered into among the Company, as
Depositor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests
in the assets of the Trust (including Exhibits A, B and D
thereto) (the "Trust Agreement"), attached as an exhibit to
the Registration Statement; and
e) A Certificate of Good Standing for the Trust, dated
December 13, 1996, obtained from the Secretary of State.
Initially capitalized terms used herein and
not otherwise defined are used as defined in the Trust
Agreement.
For purposes of this opinion, we have not
reviewed any documents other than the documents listed in
paragraphs (a) through (e) above. In particular, we have not
reviewed any document (other than the documents listed in
paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us.
We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied
solely upon the foregoing documents, the statements and
information set forth therein and the additional matters
recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us,
we have assumed (i) the authenticity of all documents
submitted to us as authentic originals, (ii) the conformity
with the originals of all documents submitted to us as copies
or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed
(i) that the Trust Agreement and the Certificate are in full
force and effect and have not been amended, (ii) except to
the extent provided in paragraph 1 below, the due creation or
due organization or due formation, as the case may be, and
valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the
legal capacity of natural persons who are parties to the
documents examined by us, (iv) that each of the parties to
the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under,
such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by
us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trust (collectively, the
"Preferred Security Holders") of a Preferred Securities
Certificate for such Preferred Security and the payment for
the Preferred Security acquired by it, in accordance with the
Trust Agreement and the Registration Statement, and (vii)
that the Preferred Securities are issued and sold to the
Preferred Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not
participated in the preparation of the Registration Statement
and assume no responsibility for its contents.
This opinion is limited to the laws of the
State of Delaware (excluding the securities laws of the State
of Delaware), and we have not considered and express no
opinion on the laws of any other jurisdiction, including
federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and
rules, regulations and orders thereunder which are currently
in effect.
Based upon the foregoing, and upon our
examination of such questions of law and statutes of the
State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the
opinion that:
The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act.
The Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below,
fully paid and nonassessable undivided beneficial interests
in the assets of the Trust.
The Preferred Security Holders, as beneficial
owners of the Trust, will be entitled to the same limitation
of personal liability extended to stockholders of private
corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the
Preferred Security Holders may be obligated to make payments
as set forth in the Trust Agreement.
We consent to the filing of this opinion with
the Securities and Exchange Commission as an exhibit to the
Registration Statement. We hereby consent to the use of our
name under the heading "Legal Opinions" in the Prospectus.
In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as stated above,
without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
Exhibit 5.03 and 8.01
December 13, 1996
Entergy Gulf States, Inc.
350 Pine Street
Beaumont, Texas 77701
Ladies and Gentlemen:
We refer to the joint Registration Statement on Form S-
2, including the exhibits thereto, to be filed with the
Securities and Exchange Commission (the "Commission") on or about
the date hereof of Entergy Gulf States, Inc. (the "Company") and
Entergy Gulf States Capital I (the "Trust") for the registration
under the Securities Act of 1933, as amended (the "Securities
Act"), of (i) Preferred Securities (the "Preferred Securities")
of the Trust in an aggregate liquidation preference of
$85,000,000 to be offered in an underwritten public offering;
(ii) Junior Subordinated Debentures (the "Debentures") of the
Company to be issued pursuant to the terms of an indenture from
the Company to The Bank of New York, as trustee (the
"Indenture"), to be issued and sold by the Company to the Trust;
and (iii) Guarantee of the Company with respect to the Preferred
Securities (the "Guarantee") to be issued pursuant to the terms
of a guarantee agreement between the Company and The Bank of New
York, as trustee (the "Guarantee Agreement").
We are of the opinion that the Company is a corporation duly
organized and validly existing under the laws of the State of
Texas.
We are of the opinion that all action necessary to make
valid and legal the proposed issuance and sale of the Debentures
and the Guarantee of the Company will have been taken when:
(a) the Company's and the Trust's joint Registration
Statement, as it may be amended, shall have become effective
in accordance with the applicable provisions of the
Securities Act, and the Indenture and the Guarantee
Agreement shall have been qualified under the Trust
Indenture Act of 1939, as amended;
(b) an appropriate order or orders shall have been issued
by the Commission under the Public Utility Holding Company
Act of 1935, as amended, with respect to the related
Application-Declaration on Form U-1 (File No. 70-8721), as
amended and as it may be further amended, authorizing the
issuance and sale of the Debentures and the Guarantee;
(c) appropriate action shall have been taken by the Board
of Directors of the Company for the purpose of authorizing
the consummation of the issuance and sale of the Debentures
and the Guarantee;
(d) the proposed Indenture and the Guarantee Agreement
shall have been appropriately executed and delivered;
(e) the specific terms of the Debentures and the Guarantee
shall have been determined by supplemental indenture, board
resolution or officer's certificate; and
(f) the Debentures and the Guarantee shall have been
appropriately issued and delivered for the consideration
contemplated by, and otherwise in conformity with, the acts,
proceedings and documents referred to above.
We are further of the opinion that when the foregoing steps
have been taken, the Debentures and the Guarantee will be legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms, in each case, except as
limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights and general equitable principles.
This opinion does not pass upon the matter of compliance with
"blue sky" laws or similar laws relating to the sale or
distribution of the Debentures and Guarantee by the underwriters.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of any other state. As to
all matters of Texas law, we have relied upon an opinion of even
date addressed to you by Laurence M. Hamric, Esq., General
Attorney -Corporate and Securities of Entergy Services, Inc.,
Texas counsel to the Company. We consent to the reliance of Mr.
Hamric upon our opinion insofar as it relates to matters of New
York law.
We confirm our opinion as set forth under the caption
"Certain United States Federal Income Tax Considerations" in the
Prospectus constituting a part of the joint Registration
Statement.
We hereby consent to the use of this opinion as an
exhibit to the joint Registration Statement, as it may be
amended, and consent to such references to our firm as may be
made in the joint Registration Statement and in the Prospectus
constituting a part thereof.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on
Form S-2 of our report, which includes emphasis paragraphs
related to rate-related contingencies, legal proceedings and
changes in accounting for income taxes, post retirement benefits
and unbilled revenues, dated February 14, 1996 on our audits of
the financial statements of Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company) as of December 31, 1995 and 1994
and for each of the three years in the period ended December 31,
1995. We also consent to the reference to our firm under the
caption "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
New Orleans, Louisiana
December 9, 1996
Exhibit 23.02
CONSENT
We consent to the inclusion in this Registration
Statement of Entergy Gulf States, Inc. and Entergy Gulf
States Capital I on Form S-2 (the "Registration Statement")
of the statements of legal conclusions made herein in Note
2, "Rate and Regulatory Matters", to the Interim Financial
Statements and Note 2, "Rate and Regulatory Matters", to the
Annual Financial Statements, which have been prepared or
reviewed as to the matters regarding rate regulation in
Texas involving River Bend plant costs by us (Clark, Thomas
& Winters). We also consent to the reference to our firm
under the heading "Experts" in the Registration Statement.
CLARK, THOMAS & WINTERS
A Professional Corporation
/s/ Clark, Thomas & Winters
A Professional Corporation
Austin, Texas
December 9, 1996
Exhibit 23.03
CONSENT
We consent to the inclusion in this Registration
Statement of Entergy Gulf States, Inc. and Entergy Gulf
States Capital I on Form S-2 (the "Registration Statement")
of the statements ("Statements") regarding the analysis by
our Firm of River Bend construction costs that are made
herein in Note 2, "Rate and Regulatory Matters", to the
Interim Financial Statements and Note 2, "Rate and
Regulatory Matters", to the Annual Financial Statements,
which statements have been prepared or reviewed by us
(Sandlin Associates). We also consent t the reference to our
firm under the heading "Experts" in the Registration
Statement.
/s/ Sandlin Associates
SANDLIN ASSOCIATES
Management Consultants
Pasco, Washington
December 31, 1996
Exhibit 25.01
===========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
ENTERGY GULF STATES, INC.
(Exact name of obligor as specified in its charter)
Texas 74-0662730
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
350 Pine Street
Beaumont, Texas 77701
(Address of principal executive offices) (Zip code)
______________________
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
===========================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ---------------------------------------------------------------------------
Name Address
- ---------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of powers
to exercise corporate trust powers. (Exhibit 1 to Amendment
No. 1 to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit
4 to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 10th day of December, 1996.
THE BANK OF NEW YORK
By: /S/ PAUL J. SCHMALZEL
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30,
1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 3,650,068
Interest-bearing balances .......... 738,260
Securities:
Held-to-maturity securities ........ 784,969
Available-for-sale securities ...... 2,033,407
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of the bank:
Federal funds sold ................... 3,699,232
Securities purchased under
agreements to resell ................. 20,000
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,109,045
LESS: Allowance for loan and
lease losses ..............586,658
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 27,521,958
Assets held in trading accounts ...... 678,844
Premises and fixed assets (including
capitalized leases) ................ 608,217
Other real estate owned .............. 50,599
Investments in unconsolidated
subsidiaries and associated
companies .......................... 235,670
Customers' liability to this bank on
acceptances outstanding ............ 904,948
Intangible assets .................... 450,230
Other assets ......................... 1,299,464
-----------
Total assets ......................... $42,675,866
===========
LIABILITIES
Deposits:
In domestic offices ................ $19,223,050
Noninterest-bearing .......7,675,758
Interest-bearing .........11,547,292
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 11,527,685
Noninterest-bearing ..........48,502
Interest-bearing .........11,479,183
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,498,351
Securities sold under agreements
to repurchase .................... 126,974
Demand notes issued to the U.S.
Treasury ........................... 231,865
Trading liabilities .................. 479,390
Other borrowed money:
With original maturity of one year
or less .......................... 2,521,578
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 905,850
Subordinated notes and debentures .... 1,020,400
Other liabilities .................... 1,543,657
----------
Total liabilities .................... 39,099,580
----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,124,231
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 8,063)
Cumulative foreign currency transla-
tion adjustments .................. ( 7,832)
------------
Total equity capital ................ 3,576,286
------------
Total liabilities and equity
capital ........................... $42,675,866
============
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
-
J. Carter Bacot |
Alan R. Griffith |--- Directors
Thomas A. Renyi |
-
Exhibit 25.02
===========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
ENTERGY GULF STATES CAPITAL I
(Exact name of obligor as specified in its charter)
Delaware To be Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
c/o Entergy Gulf States, Inc.
639 Loyola Avenue
New Orleans, Louisiana 70113
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
===========================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ---------------------------------------------------------------------------
Name Address
- ---------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of powers
to exercise corporate trust powers. (Exhibit 1 to Amendment
No. 1 to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit
4 to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 10th day of December, 1996.
THE BANK OF NEW YORK
By: /s/ PAUL J. SCHMALZEL
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30,
1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 3,650,068
Interest-bearing balances .......... 738,260
Securities:
Held-to-maturity securities ........ 784,969
Available-for-sale securities ...... 2,033,407
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of the bank:
Federal funds sold ................... 3,699,232
Securities purchased under
agreements to resell ................. 20,000
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,109,045
LESS: Allowance for loan and
lease losses ..............586,658
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 27,521,958
Assets held in trading accounts ...... 678,844
Premises and fixed assets (including
capitalized leases) ................ 608,217
Other real estate owned .............. 50,599
Investments in unconsolidated
subsidiaries and associated
companies .......................... 235,670
Customers' liability to this bank on
acceptances outstanding ............ 904,948
Intangible assets .................... 450,230
Other assets ......................... 1,299,464
-----------
Total assets ......................... $42,675,866
===========
LIABILITIES
Deposits:
In domestic offices ................ $19,223,050
Noninterest-bearing .......7,675,758
Interest-bearing .........11,547,292
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 11,527,685
Noninterest-bearing ..........48,502
Interest-bearing .........11,479,183
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,498,351
Securities sold under agreements
to repurchase .................... 126,974
Demand notes issued to the U.S.
Treasury ........................... 231,865
Trading liabilities .................. 479,390
Other borrowed money:
With original maturity of one year
or less .......................... 2,521,578
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 905,850
Subordinated notes and debentures .... 1,020,400
Other liabilities .................... 1,543,657
----------
Total liabilities .................... 39,099,580
----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,124,231
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 8,063)
Cumulative foreign currency transla-
tion adjustments .................. ( 7,832)
------------
Total equity capital ................ 3,576,286
------------
Total liabilities and equity
capital ........................... $42,675,866
============
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
-
J. Carter Bacot |
Alan R. Griffith |--- Directors
Thomas A. Renyi |
-
Exhibit 25.03
===========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
ENTERGY GULF STATES, INC.
(Exact name of obligor as specified in its charter)
Texas 74-0662730
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
350 Pine Street
Beaumont, Texas 77701
(Address of principal executive offices) (Zip code)
Guarantee of Preferred Securities
of Entergy Gulf States Capital I
(Title of the indenture securities)
===========================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ---------------------------------------------------------------------------
Name Address
- ---------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of powers
to exercise corporate trust powers. (Exhibit 1 to Amendment
No. 1 to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit
4 to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 10th day of December, 1996.
THE BANK OF NEW YORK
By: /S/ PAUL J. SCHMALZEL
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30,
1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 3,650,068
Interest-bearing balances .......... 738,260
Securities:
Held-to-maturity securities ........ 784,969
Available-for-sale securities ...... 2,033,407
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of the bank:
Federal funds sold ................... 3,699,232
Securities purchased under
agreements to resell ................. 20,000
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,109,045
LESS: Allowance for loan and
lease losses ..............586,658
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 27,521,958
Assets held in trading accounts ...... 678,844
Premises and fixed assets (including
capitalized leases) ................ 608,217
Other real estate owned .............. 50,599
Investments in unconsolidated
subsidiaries and associated
companies .......................... 235,670
Customers' liability to this bank on
acceptances outstanding ............ 904,948
Intangible assets .................... 450,230
Other assets ......................... 1,299,464
-----------
Total assets ......................... $42,675,866
===========
LIABILITIES
Deposits:
In domestic offices ................ $19,223,050
Noninterest-bearing .......7,675,758
Interest-bearing .........11,547,292
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 11,527,685
Noninterest-bearing ..........48,502
Interest-bearing .........11,479,183
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,498,351
Securities sold under agreements
to repurchase .................... 126,974
Demand notes issued to the U.S.
Treasury ........................... 231,865
Trading liabilities .................. 479,390
Other borrowed money:
With original maturity of one year
or less .......................... 2,521,578
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 905,850
Subordinated notes and debentures .... 1,020,400
Other liabilities .................... 1,543,657
----------
Total liabilities .................... 39,099,580
----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,124,231
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 8,063)
Cumulative foreign currency transla-
tion adjustments .................. ( 7,832)
------------
Total equity capital ................ 3,576,286
------------
Total liabilities and equity
capital ........................... $42,675,866
============
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
-
J. Carter Bacot |
Alan R. Griffith |-- Directors
Thomas A. Renyi |
-
