<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 1997
REGISTRATION NOS. 333- , 333- , 333- , 333- ,
333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
HOUSTON LIGHTING & POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-0694415
(I.R.S. EMPLOYER IDENTIFICATION
(STATE OR OTHER JURISDICTION OF NO.)
INCORPORATION OR ORGANIZATION)
1111 LOUISIANA HUGH RICE KELLY, EXECUTIVE VICE
HOUSTON, TEXAS 77002 PRESIDENT
(713) 207-1111 GENERAL COUNSEL AND CORPORATE
SECRETARY
(ADDRESS, INCLUDING ZIP CODE, AND HOUSTON LIGHTING & POWER COMPANY
TELEPHONE NUMBER, INCLUDING AREA CODE, 1111 LOUISIANA
OF REGISTRANT'S PRINCIPAL HOUSTON, TEXAS 77002
EXECUTIVE OFFICES) (713) 207-1111
(NAME AND ADDRESS, INCLUDING ZIP
CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR
SERVICE)
HL&P CAPITAL TRUST I
HL&P CAPITAL TRUST II
HL&P CAPITAL TRUST III
HL&P CAPITAL TRUST IV
(EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS TRUST AGREEMENT)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION
OF EACH REGISTRANT)
200 WEST 9TH STREET PLAZA, BOX
2105 NORMAN J. SHUMAN
WILMINGTON, DELAWARE 19899 200 WEST 9TH STREET PLAZA, BOX 2105
(302) 655-8894 WILMINGTON, DELAWARE 19899
(302) 655-8894
(ADDRESS, INCLUDING ZIP CODE, AND (NAME AND ADDRESS, INCLUDING ZIP
TELEPHONE NUMBER, INCLUDING AREA CODE, CODE, AND TELEPHONE NUMBER,
OF EACH REGISTRANT'S PRINCIPAL INCLUDING AREA CODE, OF AGENT FOR
EXECUTIVE OFFICES) SERVICE)
--------------
WITH COPIES TO:
STEVEN R. LOESHELLE MARGO S. SCHOLIN
DEWEY BALLANTINE BAKER & BOTTS, L.L.P.
1301 AVENUE OF THE AMERICAS 910 LOUISIANA, ONE SHELL PLAZA
NEW YORK, NEW YORK 10019-6092 HOUSTON, TEXAS 77002-4995
(212) 259-6160 (713) 229-1110
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
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, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
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<PAGE>
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. [_]
----------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE PER OFFERING REGISTRATION
REGISTERED REGISTERED(1) UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1)
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<S> <C> <C> <C> <C>
HL&P Capital Trust I
Preferred Securities..
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HL&P Capital Trust II
Preferred Securities..
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HL&P Capital Trust III
Preferred Securities..
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HL&P Capital Trust IV
Preferred Securities..
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HL&P Capital Trust I
Capital Securities....
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HL&P Capital Trust II
Capital Securities....
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HL&P Capital Trust III
Capital Securities....
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HL&P Capital Trust IV
Capital Securities....
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Houston Lighting & Power
Company Junior
Subordinated Deferrable
Interest Debentures...
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Houston Lighting & Power
Company Guarantees with
respect to Preferred
Securities and Capital
Securities of HL&P
Capital Trust I, II,
III, and IV(4)(5).....
- ----------------------------------------------------------------------------------
Total................. $350,000,000 100% $350,000,000 $106,060.61
</TABLE>
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- -------------------------------------------------------------------------------
(1) There are being registered hereunder a presently indeterminate number of
Preferred Securities and Capital Securities of HL&P Capital Trust I, II,
III and IV and a presently indeterminate principal amount of Junior
Subordinated Deferrable Interest Debentures of Houston Lighting & Power
Company with an aggregate initial offering price not to exceed
$350,000,000. Junior Subordinated Deferrable Interest Debentures also may
be issued to HL&P Capital Trust I, II, III and IV and later distributed
upon dissolution and distribution of the assets thereof which would
include such Junior Subordinated Deferrable Interest Debentures for which
no separate consideration will be received. Pursuant to Rule 457(o) under
the Securities Act of 1933, which permits the registration fee to be
calculated on the basis of the maximum offering price of all securities
listed, the table does not specify by each class information as to the
amount to be registered, proposed maximum offering price per unit or
proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and distributions, if any.
(4) No separate consideration will be received for the Houston Lighting &
Power Company Guarantees. Pursuant to Rule 457(n) no separate fee is
payable in respect to the Houston Lighting & Power Company Guarantees.
(5) Includes the obligations of Houston Lighting & Power Company under the
respective Trust Agreements, the Junior Subordinated Deferrable Interest
Debenture Indenture, the related series of Junior Subordinated Deferrable
Interest Debentures, the respective Guarantees and the respective
Agreements as to Expenses and Liabilities, which include Houston Lighting
& Power Company's covenant to pay any indebtedness, expenses or
liabilities of the Trusts (other than obligations pursuant to the terms of
the Securities or other similar interests), all as described in this
Registration Statement.
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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<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 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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 21, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY , 1997
$ ,000,000
HL&P CAPITAL TRUST [ ]
% CAPITAL SECURITIES, SERIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
HOUSTON LIGHTING & POWER COMPANY
-----------
The % Capital Securities, Series (the "Series Capital Securities"),
offered hereby represent undivided beneficial interests in the assets of HL&P
Capital Trust , a statutory business trust created under the laws of the
State of Delaware (the "Series Issuer"). Houston Lighting & Power Company, a
Texas corporation ("HL&P" or the "Corporation"), will be the owner of all the
undivided beneficial interests in the assets of the Series Issuer represented
by common securities of the Series Issuer ("Series Common Securities"
and, collectively with the Series Capital Securities, the "Series
Securities"). The Bank of New York is the Property Trustee of the Series
Issuer. The Series Issuer exists for the sole purpose of issuing the Series
Securities and investing the proceeds thereof in % Junior Subordinated
Deferrable Interest Debentures, Series (the "Series Subordinated
Debentures"), to be issued by the Corporation. The Series Subordinated
Debentures will mature on (the "Stated Maturity"). Under certain
conditions, the Company has the right to advance the Stated Maturity. See
"Certain Terms of the Series Subordinated Debentures--Conditional Right to
Advance Maturity". The Series Capital Securities will have a preference
under certain circumstances with respect to cash distributions and amounts
payable on liquidation or redemption over the Series Common Securities. See
"Description of Securities--Subordination of Common Securities" in the
accompanying Prospectus.
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES CAPITAL 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 SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING THE SERIES
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
-------------- ------------- -------------
<S> <C> <C> <C>
Per Series Capital Security....... $ (2) $
Total............................... $ (2) $
</TABLE>
- -----
(1) The Series Issuer and the Corporation have each 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 Series Capital
Securities will be invested in the Series Subordinated Debentures, the
Corporation has agreed to pay to the Underwriters as compensation for their
arranging the investment therein of such proceeds $ per Series
Capital Security (or $ in the aggregate). See "Underwriting".
(3) Expenses of the offering, which are payable by the Corporation, are
estimated to be $ .
-----------
The Series Capital 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 the Series Capital Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company in
New York, New York, on or about ,1997, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
-----------
The date of this Prospectus Supplement 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 SERIES
CAPITAL SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
(cover page continued)
Holders of the Series Capital Securities will be entitled to receive
preferential cumulative cash distributions accruing from the date of original
issuance and payable semi-annually in arrears on the day of and of
each year, commencing , at the annual rate of % of the Liquidation Amount
(as defined in the accompanying Prospectus) of $1,000 per Series Capital
Security ("Distributions"). The ability of the Series Issuer to make
timely payments of Distributions on the Series Capital Securities is
solely dependent upon the Corporation making interest payments on the Series
Subordinated Debentures as and when required. Subject to certain
exceptions, as described herein, the Corporation has the right to defer
payment of interest on the Series Subordinated Debentures at any time or
from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each deferral period (each, an "Extension Period");
provided that no Extension Period may extend beyond the Stated Maturity of the
Series Subordinated Debentures. If interest payments on the Series
Subordinated Debentures are so deferred, Distributions on the Series
Capital Securities will also be deferred, and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay
any cash distributions with respect to the Corporation's capital stock or debt
securities that rank pari passu in all respects with or junior to the Series
Subordinated Debentures. During an Extension Period, interest on the Series
Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Series Capital Securities are
entitled will accumulate) at the rate of % per annum, compounded semi-
annually from the relevant payment date for such interest, and holders of
Series Capital Securities will be required to accrue interest income for
United States federal income tax purposes. Upon the termination of any such
Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the annual rate of %, compounded semi-
annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period subject to the requirements set forth
herein. See "Certain Terms of Series Subordinated Debentures--Option to
Defer Interest Payments" and "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount".
The Series Subordinated Debentures (and therefore the Series Capital
Securities) are unsecured and subordinated to all existing and future Senior
Debt (as defined in the accompanying Prospectus) of the Corporation.
Substantially all of the Corporation's existing indebtedness constitutes
Senior Debt. At September 30, 1996, the Senior Debt of the Corporation
aggregated approximately $3.0 billion. If the Transaction (as defined in the
accompanying Prospectus) is consummated using the Alternative Merger (as
defined in the accompanying Prospectus), Senior Debt of the Corporation will
be substantially increased. See "Recent Developments; NorAm Merger" in the
accompanying Prospectus. None of the Indenture, the related Guarantee, the
related Trust Agreement or the Expense Agreement places any limitation on the
amount of secured or unsecured debt, including Senior Debt, that may be
incurred by the Corporation. See "Description of Junior Subordinated
Debentures--Subordination" in the accompanying Prospectus.
The Corporation has, through the Series Guarantee, the Trust Agreement,
the Series Subordinated Debentures, the Indenture and the Expense Agreement
(each as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of the Series Issuer's obligations
S-2
<PAGE>
under the Series Capital Securities. See "Relationship Among the Securities,
the Corresponding Junior Subordinated Debentures, the Expense Agreement and the
Guarantees--Full and Unconditional Guarantee" in the accompanying Prospectus.
The Series Guarantee of the Corporation (the "Series Guarantee")
guarantees the payment of Distributions and payments on liquidation of the
Series Issuer or redemption of the Series Capital Securities, but only in
each case to the extent of funds held by the Series Issuer, as described
herein. See "Description of Guarantees" in the accompanying Prospectus. If the
Corporation does not make interest payments on the Series Subordinated
Debentures held by the Series Issuer, the Series Issuer will have
insufficient funds to pay Distributions on the Series Capital Securities.
The Series Guarantee does not cover payment of Distributions when the Series
Issuer has insufficient funds to pay such Distributions. In such event, a
holder of Series Capital Securities may institute a legal proceeding
directly against the Corporation pursuant to the terms of the Indenture to
enforce payment of amounts equal to such Distributions to such holder. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Securities" in the accompanying Prospectus.
The obligations of the Corporation under the Series Guarantee, the Series
Subordinated Debentures and with respect to the Series Capital Securities
are subordinate and junior in right of payment to all Senior Debt of the
Corporation.
The Series Capital Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series Subordinated Debentures at
their Stated Maturity or earlier redemption. The Series Subordinated
Debentures are redeemable prior to their Stated Maturity at the option of the
Corporation (i) on or after , , in whole at any time or in part from time
to time, or (ii) prior to , in whole (but not in part) within 90 days
following the occurrence of a Special Event (as defined herein). For a
description of redemption prices for the Series Capital Securities pursuant
to clause (i) or (ii) above, see "Certain Terms of Series Capital
Securities--Redemption" and "Certain Terms of Series Subordinated
Debentures--Redemption".
The Corporation will have the right at any time to direct the Property
Trustee to dissolve the Series Issuer. See "Certain Terms of Series
Capital Securities--Liquidation of Series Issuer and Distribution of Series
Subordinated Debentures to Holders". In the event of the dissolution of the
Series Issuer, after satisfaction of liabilities to creditors of the Series
Issuer as required by applicable law, the holders of the Series Capital
Securities will be entitled to receive a Liquidation Amount of $1,000 per
Series Capital Security plus accumulated and unpaid Distributions thereon to
the date of payment, which may be in the form of a distribution of such amount
in Series Subordinated Debentures, subject to certain exceptions. See
"Description of Securities--Liquidation Distribution Upon Termination" in the
accompanying Prospectus.
The Corporation will have the right, subject to certain restrictions as
described herein, to advance the Stated Maturity of the Series Subordinated
Debentures upon the occurrence of a Tax Event (as defined herein). See "Certain
Terms of Series Subordinated Debentures--Conditional Right to Advance
Maturity".
The Series Capital Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Series Capital Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described in the accompanying Prospectus, Series
Capital Securities in certificated form will not be issued in exchange for
the global certificates. See "Certain Terms of Series Capital Securities--
Registration of Series Capital Securities".
S-3
<PAGE>
The information in this Prospectus Supplement supplements and should be read
in conjunction with the information contained in the accompanying Prospectus.
As used herein, (i) the "Indenture" means the Junior Subordinated Indenture,
as amended and supplemented from time to time, between the Corporation and The
Bank of New York, as trustee (the "Debenture Trustee"), and (ii) the "Trust
Agreement" means the Amended and Restated Trust Agreement relating to the
Series Issuer among the Corporation, as Depositor, 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 Administrative Trustees
named therein (collectively with the Property Trustee and Delaware Trustee,
the "Issuer Trustees"). Each of the other capitalized terms used in this
Prospectus Supplement and not otherwise defined in this Prospectus Supplement
has the meaning set forth in the accompanying Prospectus.
RISK FACTORS
Prospective purchasers of the Series Capital Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and
in the accompanying Prospectus and should particularly consider the following
matters. In addition, because the Series Capital Securities will be paid
with proceeds of the Series Subordinated Debentures and because holders of
Series Capital Securities may receive Series Subordinated Debentures upon
liquidation of the Series Issuer, prospective purchasers of Series Capital
Securities are also making an investment decision with regard to the
Series Subordinated Debentures and should carefully review all the
information regarding the Series Subordinated Debentures contained herein.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES GUARANTEE AND THE
SERIES SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series Guarantee issued by
the Corporation for the benefit of the holders of Series Securities and
under the Series Subordinated Debentures are unsecured and rank subordinate
and junior in right of payment to all existing and future Senior Debt of the
Corporation. Substantially all of the Corporation's existing indebtedness
constitutes Senior Debt. At September 30, 1996, the Senior Debt of the
Corporation aggregated approximately $3.0 billion. If the Transaction is
consummated using the Alternative Merger, Senior Debt of the Corporation will
be substantially increased. See "Recent Developments; NorAm Merger" in the
accompanying Prospectus. None of the Indenture, the Series Guarantee, the
Trust Agreement or the Expense Agreement places any limitation on the amount
of secured or unsecured debt, including Senior Debt, that may be incurred by
the Corporation. See "Description of Guarantees--Status of the Guarantees" and
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
The ability of the Series Issuer to make timely payments of Distributions
on the Series Capital Securities is solely dependent upon the Corporation
making interest payments on the Series Subordinated Debentures as and when
required.
OPTION TO DEFER INTEREST PAYMENT; TAX CONSEQUENCES; MARKET PRICE CONSEQUENCES
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series Subordinated Debentures at any time or from time
to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period; provided that no Extension Period may extend
beyond the Stated Maturity of the Series Subordinated Debentures. As a
consequence of any such
S-4
<PAGE>
deferral of interest payments by the Corporation, semi-annual Distributions on
the Series Capital Securities by the Series Issuer will also be deferred
during any such Extension Period. Distributions to which holders of the
Series Capital Securities are entitled will accumulate additional
Distributions thereon at the rate of % per annum, compounded semi-annually
from the relevant payment date for such Distributions. During any such
Extension Period, the Corporation 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 Corporation's capital stock or (ii) make any
payment of principal or of interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including other
series of Junior Subordinated Debentures) that, in either case, rank pari
passu with or junior in interest to the Series Subordinated Debentures or
make any guarantee payments with respect to any guarantee by the Corporation
of the debt securities of any subsidiary of the Corporation if such guarantee
ranks pari passu with or junior in interest to the Series Securities (other
than (a) dividends or distributions in capital stock of the Corporation,
(b) any declaration of a dividend under a stockholders' rights plan or in
connection with the implementation of a stockholders' rights plan, the
issuance of capital stock of the Corporation under a stockholders' rights plan
or the redemption or repurchase of any such rights distributed pursuant to a
stockholders' rights plan, (c) payments under the Series Guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees, related to the issuance of common stock or rights under a dividend
reinvestment and stock purchase plan or related to the issuance of common
stock (or securities convertible into or exchangeable for common stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Corporation may further defer the payment of interest on
the Series Subordinated Debentures; provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Series Subordinated Debentures. During an Extension Period, the
Corporation will have the right to make partial payments of interest on any
Interest Payment Date. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid (together with interest
thereon at the annual rate of %, compounded semi-annually from the Interest
Payment Date for such interest, to the extent permitted by applicable law),
the Corporation may elect to begin a new Extension Period subject to the above
requirements. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Certain Terms of
Series Capital Securities--Distributions" and "Certain Terms of
Series Subordinated Debentures--Option to Defer Interest Payments".
Should an Extension Period occur, a holder of Series Capital Securities
will be required to accrue income (in the form of original issue discount) in
respect of its pro rata share of the Series Subordinated Debentures held by
the Series Issuer for United States federal income tax purposes. As a
result, a holder of Series Capital Securities will be required to include
such income in gross income for United States federal income tax purposes in
advance of the receipt of cash attributable to such income and will not
receive the cash related to such income from the Series Issuer if the holder
disposes of the Series Capital Securities prior to the record date for the
payment of Distributions. See "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount" and "--Sale or Redemption of
Series Capital Securities". PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR
OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE
SERIES CAPITAL SECURITIES.
The Corporation has no current intention of exercising its right to defer
payments of interest on the Series Subordinated Debentures. However, should
the Corporation elect to exercise such right in the future, the market price
of the Series Capital Securities is likely to be affected. A holder that
disposes of its Series Capital Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder
that continues to hold its Series Capital Securities.
S-5
<PAGE>
SPECIAL EVENT REDEMPTION; PAYMENT OF ADDITIONAL SUMS; CONDITIONAL RIGHT TO
ADVANCE MATURITY
Upon the occurrence and continuation of a Special Event (as defined below)
prior to , the Corporation has the right to redeem the Series
Subordinated Debentures in whole (but not in part) within 90 days following
the occurrence of such Special Event and thereby cause a mandatory redemption
of the Series Securities in whole (but not in part) at the Redemption
Price. See "Certain Terms of Series Capital Securities--Redemption". In
addition to the foregoing redemption right, upon the occurrence of a Tax Event
(as defined below), the Corporation will have the right, subject to certain
conditions, to advance the Stated Maturity of the Series Subordinated
Debentures. See "Certain Terms of Series Subordinated Debentures--
Conditional Right to Advance Maturity". If a Special Event has occurred and is
continuing and the Corporation does not elect either option discussed above,
the Series Securities will remain outstanding and Additional Sums (as
defined below) may be payable on the Series Subordinated Debentures. See
"Certain Terms of Series Subordinated Debentures--Additional Sums". At any
time, the Corporation has the right to direct the Property Trustee to dissolve
the Series Issuer and, after satisfaction of the liabilities of creditors
of the Series Issuer as provided by applicable law, cause the Series
Subordinated Debentures to be distributed to the holders of the Series
Securities.
A "Special Event" means a Tax Event or an Investment Company Act Event.
A "Tax Event" means the receipt by the Series Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change, pronouncement or decision is announced on or after the
date of issuance of the Series Capital Securities under the Trust
Agreement, there is more than an insubstantial risk that (i) the Series
Issuer is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued on
the Series Subordinated Debentures, (ii) interest payable by the
Corporation on the Series Subordinated Debentures is not, or within 90 days
of the date of such opinion, will not be, deductible by the Corporation, in
whole or in part, for United States federal income tax purposes or (iii) the
Series Issuer is, or will be within 90 days of the date of the opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
An "Investment Company Act Event" means the receipt by the Series Issuer
of an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a 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"), there is more than an insubstantial risk that the Series Issuer 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 1940 Act Law becomes effective on or after the date of original issuance of
the Series Capital Securities.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Series Issuer
on the outstanding Series Securities shall not be reduced as a result of
any additional taxes, duties and other governmental charges to which the
Series Issuer has become subject as a result of a Special Event.
S-6
<PAGE>
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's 1996 budget proposal, was introduced to
the 104th Congress. The Bill would have, among other things, generally denied
interest deductions for interest accrued on an instrument issued by a
corporation that had a maximum term of more than 20 years and that was not
shown as indebtedness on the separate balance sheet of the issuer or, where the
instrument was issued to a related party (other than a corporation), where the
holder or some other related party issued a related instrument that was not
shown as indebtedness on the issuer's consolidated balance sheet. The Bill
would have also generally denied interest deductions for interest on an
instrument issued by a corporation that had a maximum weighted-average maturity
of more than 40 years. The above-described provisions of the Bill were proposed
to be effective generally for instruments issued on or after December 7, 1995.
If this provision were to apply to the Series Subordinated Debentures, the
Corporation would not be able to deduct interest on the Series 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. Under current law, the Corporation will be able to deduct
interest on the Series Subordinated Debentures. Although the 104th Congress
adjourned without enacting the above-described provisions of the Bill, there
can be no assurance that current or future legislative proposals or final
legislation will not adversely affect the ability of the Corporation to deduct
interest on the Series Subordinated Debentures. Such a change could give
rise to a Tax Event, which would permit the Corporation to cause a redemption
of the Series Capital Securities before . See "Certain Terms of Series
Subordinated Debentures--Redemption" and "Certain Terms of the Series
Subordinated Debentures--Conditional Right to Advance Maturity" in this
Prospectus Supplement and "Description of Securities--Redemption or
Distribution--Distribution of Corresponding Junior Subordinated Debentures" in
the accompanying Prospectus. See also "Certain Federal Income Tax
Consequences--Possible Tax Law Changes".
DISTRIBUTION OF SERIES CAPITAL SECURITIES FOR SERIES SUBORDINATED
DEBENTURES
The Corporation will have the right at any time to direct the Property
Trustee to dissolve the Series Issuer and, after satisfaction of liabilities
to creditors of the Series Issuer as required by applicable law, cause the
Series Subordinated Debentures to be distributed to the holders of the
Series Securities. See "Certain Terms of Series Capital Securities--
Liquidation of Series Issuer and Distribution of Series Subordinated
Debentures to Holders".
Under current United States federal income tax law and interpretations, a
distribution of the Series Subordinated Debentures upon dissolution and
winding up of the Series Issuer should not be a taxable event to holders of
the Series Capital Securities. Should there be a change in law, a change in
legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to the holders of the Series Capital
Securities. See "Certain Federal Income Tax Consequences--Distribution of
Series Subordinated Debentures to Holders of Series Capital Securities".
RIGHTS UNDER THE SERIES GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO THE
SERIES ISSUER
The Series Guarantee guarantees to the holders of the Series Securities
the following payments, to the extent not paid by the Series Issuer: (i) any
accumulated and unpaid Distributions required to be paid on the Series
Securities, to the extent that the Series Issuer has funds on hand available
therefor at such time; (ii) the redemption price with respect to any Series
Securities called for redemption, to the extent that the Series Issuer has
funds on
S-7
<PAGE>
hand available therefor at such time; and (iii) upon a voluntary or
involuntary dissolution and winding up of the Series Issuer (unless the
Series Subordinated Debentures are distributed to holders of the Series
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment and (b) the amount
of assets of the Series Issuer remaining available for distribution to
holders of the Series Securities in liquidation of the Series Issuer after
payment of creditors of the Series Issuer as required by applicable law. The
Series Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). The Bank of New York will
act as the indenture trustee under the Series Guarantee (the "Guarantee
Trustee") for the purpose of compliance with the Trust Indenture Act and will
hold the Series Guarantee for the benefit of the holders of the
Series Securities. The Bank of New York will also act as Debenture Trustee
for the Series Subordinated Debentures and as Property Trustee and The Bank
of New York (Delaware) will act as Delaware Trustee under the Trust Agreement.
The Series Guarantee is subordinate as described under "--Ranking of
Subordinated Obligations Under the Series Guarantee and the
Series Subordinated Debentures".
The holders of not less than a majority in aggregate Liquidation Amount of
the Series 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 Series Guarantee or to direct the exercise of any trust
power conferred upon the Guarantee Trustee under the Series Guarantee. Any
holder of the Series Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Series Guarantee
without first instituting a legal proceeding against the Series Issuer, the
Guarantee Trustee or any other person or entity. If the Corporation were to
default on its obligation to pay amounts payable under the Series
Subordinated Debentures, the Series Issuer would lack funds for the payment
of Distributions or amounts payable on redemption of the Series Securities
or otherwise, and, in such event, holders of the Series Securities would not
be able to rely upon the Series Guarantee for payment of such amounts.
Instead, if a Debenture Event of Default shall have occurred and be continuing
and such event is attributable to the failure of the Corporation to pay
interest or premium, if any, on or principal of the Series Subordinated
Debentures on the applicable payment date, then a holder of Series Capital
Securities may institute a legal proceeding directly against the Corporation
pursuant to the terms of the Indenture for enforcement of payment to such
holder of the principal of or interest or premium, if any, on such Series
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Series Capital Securities held by such holder (a
"Direct Action"). In connection with such Direct Action, the Corporation will
have a right of set-off under the Indenture to the extent of any payment made
by the Corporation to such holder of Series Capital Securities in the
Direct Action. Except as described herein, holders of Series Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Series Subordinated Debentures or assert directly any
other rights in respect of the Series Subordinated Debentures. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Securities", "--Debenture Events of Default" and "Description of
Guarantees" in the accompanying Prospectus. The Trust Agreement provides that
each holder of Series Securities by acceptance thereof agrees to the
provisions of the Series Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Series Capital Securities generally will have limited voting
rights relating only to the modification of the Series Capital Securities,
the exercise of the Series Issuer's rights as holder of Series
Subordinated Debentures and the Series Guarantee. Holders of
Series Capital Securities will not be entitled to vote to appoint, remove or
replace the Property Trustee, the Delaware Trustee or any Administrative
Trustee, and such voting rights are vested
S-8
<PAGE>
exclusively in the holder of the Series Common Securities except, with
respect to the Property Trustee and the Delaware Trustee, upon the occurrence
of certain events described in the accompanying Prospectus. The Property
Trustee, the Administrative Trustees and the Corporation may amend the Trust
Agreement without the consent of holders of Series Capital Securities to
ensure that the Series Issuer will be classified for United States federal
income tax purposes as a grantor trust unless such action materially and
adversely affects the interests of such holders. See "Description of
Securities--Voting Rights; Amendment of Each Trust Agreement" and "--Removal
of Issuer Trustees" in the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES CAPITAL SECURITIES
The Corporation and the Series Issuer do not intend to have the
Series Capital Securities listed on any securities exchange. If the
underwriters do not make a market for the Series Capital Securities, the
liquidity of the Series Capital Securities could be adversely affected. See
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount" and "--Sale or Redemption of Series Capital Securities" for a
discussion of the United States federal income tax consequences that may
result from a taxable disposition of the Series Securities.
MARKET PRICES
There can be no assurance as to the market prices for Series Capital
Securities or Series Subordinated Debentures that may be distributed upon
dissolution and winding up of the Series Issuer. Accordingly, the
Series Capital Securities that an investor may purchase, whether pursuant to
the offer made hereby or in the secondary market, or the Series Subordinated
Debentures that a holder of Series Capital Securities may receive upon
dissolution and winding up of the Series Issuer, may trade at a discount to
the price that the investor paid to purchase the Series Capital Securities
offered hereby. As a result of the existence of the Corporation's right to
defer interest payments, the market price of the Series Capital Securities
(which represent undivided beneficial interests in the assets of the
Series Issuer) may be more volatile than the market prices of other
securities that are not subject to such optional deferrals. See "Certain Terms
of the Series Subordinated Debentures" herein and "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
HL&P CAPITAL TRUST [ ]
HL&P Capital Trust (the "Series Issuer") is a statutory business trust
created under Delaware law pursuant to (i) the Trust Agreement executed by the
Corporation, as Depositor, and The Bank of New York (Delaware), as Delaware
Trustee, and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on January 10, 1997. The Series Issuer's business and
affairs are conducted by the Issuer Trustees: The Bank of New York, as
Property Trustee, and The Bank of New York (Delaware), as Delaware Trustee,
and two individual Administrative Trustees who will be selected by the
Corporation. The Series Issuer exists for the exclusive purposes of (i)
issuing and selling the Series Capital Securities and Series Common
Securities, (ii) using the proceeds from the sale of such Series Securities
to acquire Series Subordinated Debentures issued by the Corporation and
(iii) engaging in only those other activities necessary, convenient or
incidental thereto (such as registering the transfer of the Series Capital
Securities). Accordingly, the Series Subordinated Debentures and the right
to reimbursement under the Expense Agreement will be substantially all the
assets of the Series Issuer, and payments under the Series Subordinated
Debentures and the Expense Agreement will be the only revenues of the
S-9
<PAGE>
Series Issuer. All of the Series Common Securities will be owned by the
Corporation. The Series Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Series Capital Securities, except
that upon the occurrence and continuance of an event of default under the
Trust Agreement resulting from an event of default under the Indenture, the
rights of the Corporation as holder of the Series 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
Series Capital Securities. See "Description of Securities--Subordination of
Common Securities" in the accompanying Prospectus. The Corporation will
acquire Series Common Securities in an aggregate Liquidation Amount equal to
3% of the total capital of the Series Issuer. The Series Issuer has a term
of approximately 55 years, but may be dissolved earlier as provided in the
Trust Agreement. The principal executive office of the Series Issuer is 200
West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899, and its telephone
number is (302) 655-8894. See "The Issuers" in the accompanying Prospectus.
It is anticipated that the Series Issuer will not be subject to the
reporting requirements under the Exchange Act.
S-10
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
SELECTED FINANCIAL INFORMATION OF THE CORPORATION
The following table presents summary financial data derived from the
financial statements of the Corporation. This summary is qualified in its
entirety by the detailed information and financial statements included in the
documents incorporated herein by reference. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus. The Corporation is a
party to an Agreement and Plan of Merger, dated as of August 11, 1996, as
amended, among the Corporation, Houston Industries Incorporated ("Houston
Industries"), HI Merger, Inc. and NorAm Energy Corp. ("NorAm"). For more
information regarding the Corporation and the proposed merger, see "Houston
Lighting & Power Company" and "Recent Developments; NorAm Merger" in the
accompanying Prospectus. No adjustment has been made to reflect the potential
impact of the Transaction.
<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS ENDED AS OF OR FOR THE
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- ------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ 3,142,234 $ 2,896,180 $ 3,680,297 $ 3,746,085 $ 4,079,863 $ 3,826,841 $ 3,674,543
Income after preferred
dividends but before
cumulative effect of
change in
accounting(1).......... $ 374,129 $ 416,941 $ 450,977 $ 461,381 $ 449,750 $ 375,955 $ 472,712
Cumulative effect of
change in
accounting(2).......... (8,200) 94,180
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income after preferred
dividends.............. $ 374,129 $ 416,941 $ 450,977 $ 453,181 $ 449,750 $ 470,135 $ 472,712
=========== =========== =========== =========== =========== =========== ===========
Return on average common
equity................. 9.6% 10.7% 11.8% 12.0% 12.3% 13.3% 13.8%
Total assets............ $10,486,947 $10,928,449 $10,665,259 $10,850,981 $10,753,616 $10,790,052 $10,620,642
Long-term obligations
including current
maturities(3).......... $ 2,932,064 $ 3,239,499 $ 3,220,015 $ 3,356,789 $ 3,402,032 $ 3,796,719 $ 4,150,454
Capitalization:
Common stock equity.... 55% 53% 52% 51% 50% 47% 44%
Cumulative preferred
stock (including
current maturities)... 5% 5% 6% 7% 7% 7% 6%
Long-term debt
(including current
maturities)........... 40% 42% 42% 42% 43% 46% 50%
Capital and nuclear fuel
expenditures (excluding
AFUDC)................. $ 224,844 $ 287,593 $ 391,550 $ 412,899 $ 329,016 $ 337,082 $ 365,486
Percent of capital
expenditures financed
internally from
operations............. 183% 148% 110% 216% 158% 137% 126%
</TABLE>
- -------
(1) A one-time after-tax charge of $62 million was recorded in the first
quarter of 1996 in connection with the settlement of litigation relating
to the South Texas Project Electric Generating Station.
(2) The 1994 cumulative effect relates to the change in accounting for
postemployment benefits. The 1992 cumulative effect relates to the change
in accounting for revenues from a cycle billing to a full accrual method
effective January 1, 1992.
(3) Includes Cumulative Preferred Stock subject to mandatory redemption.
S-11
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Corporation's ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividend
requirements for each of the periods indicated:
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED FOR THE
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
before cumulative effect of change in
accounting(1)......................... 4.27 4.30 3.75 3.80 3.40 2.73 2.97
Ratio of earnings to fixed charges and
preferred dividend requirements before
cumulative effect of change in
accounting(1)......................... 3.73 3.66 3.20 3.20 2.90 2.34 2.53
</TABLE>
- --------
(1) The Corporation believes that the ratios for the nine-month periods are not
necessarily indicative of the ratios for twelve-month periods due to the
seasonal nature of the Corporation's business and, with regard to the ratio
for the nine months ended September 30 1996, the recording of a $62 million
after-tax charge to earnings for the first quarter of 1996.
USE OF PROCEEDS
All of the proceeds from the sale of the Series Capital Securities will be
invested by the Series Issuer in Series Subordinated Debentures. The
Corporation intends that the proceeds from the sale of the Series
Subordinated Debentures will be added to its general corporate funds and will
be used for general corporate purposes, including funding the redemption or
repurchase of shares of its outstanding preferred stock.
S-12
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Corporation as of
September 30, 1996 and as adjusted to give effect to the consummation of the
offering of an aggregate of $350 million of the Series Capital Securities,
other Capital Securities or Preferred Securities and the redemption of
preferred stock having an aggregate fixed liquidation value of $220 million in
the fourth quarter of 1996. No adjustment has been made to reflect (i) the
potential impact of the Transaction or (ii) the issuance of $118 million
aggregate principal amount of revenue refunding bonds by the Corporation in
the first quarter of 1997, which issuance had no effect on the total long-term
debt of the Corporation. The following data should be read in conjunction with
the financial statements and notes thereto of the Corporation incorporated
herein by reference.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------
ACTUAL AS ADJUSTED
---------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Common Stock Equity:
Common stock, class A; no par value.................. $1,524,949 $1,524,949
Common stock, class B; no par value.................. 150,978 150,978
Retained earnings.................................... 2,277,465 2,277,465
---------- ----------
Total common stock equity.......................... 3,953,392 3,953,392
---------- ----------
Cumulative Preferred Stock (excluding current portion):
Not subject to mandatory redemption(1)............... 351,345 135,178
Subject to mandatory redemption...................... 0 0
---------- ----------
Total cumulative preferred stock................... 351,345 135,178
---------- ----------
Company Obligated Mandatorily Redeemable Trust
Securities(2)......................................... 0 350,000
---------- ----------
Long-Term Debt (excluding current maturities):
First mortgage bonds................................. 2,704,848 2,704,848
Pollution control revenue bonds...................... 5,000 5,000
Other................................................ 2,756 2,756
---------- ----------
Total long-term debt............................... 2,712,604 2,712,604
---------- ----------
Total capitalization............................... $7,017,341 $7,151,174
========== ==========
</TABLE>
- --------
(1) The adjusted amount reflects the redemption in the fourth quarter of 1996
of the Corporation's Variable Term Cumulative Preferred Stock, Series A,
B, C and D having an aggregate fixed liquidation value of $220 million.
Such preferred stock was reflected on the Corporation's financial
statements at $216 million as a result of expenses of the original
issuance.
(2) As described herein and in the accompanying Prospectus, substantially all
of the assets of the respective Issuers will be Junior Subordinated
Debentures of the Corporation with an aggregate principal amount not
exceeding $360,825,000, and upon redemption of such debt, the related
Securities will be mandatorily redeemable.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series Issuer will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Series
Issuer will be included in the financial statements of the Corporation. The
Series Capital Securities will be reflected in the consolidated balance
sheets of the Corporation as "Company Obligated Mandatorily Redeemable Trust
Preferred Securities", and appropriate disclosures about the Series Capital
Securities, the Series Guarantee and the Series Subordinated Debentures
and the Expense Agreement will be included in the notes to the consolidated
financial statements. For financial reporting purposes, the Corporation will
record Distributions payable on the Series Capital Securities as an
expense.
S-13
<PAGE>
CERTAIN TERMS OF SERIES CAPITAL SECURITIES
GENERAL
The following summary of certain terms and provisions of the
Series Capital Securities supplements the description of the terms and
provisions of the Securities set forth in the accompanying Prospectus under
the heading "Description of Securities", to which description reference is
hereby made. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. The Property Trustee will act as the indenture trustee
with respect to the Series Issuer for purposes of compliance with the Trust
Indenture Act. This summary of certain terms and provisions of the
Series Capital Securities, which describes the material provisions thereof,
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the Trust Agreement to which description reference
is hereby made. The form of the Trust Agreement has been filed as an exhibit
to the Registration Statement of which this Prospectus Supplement and
accompanying Prospectus form a part.
DISTRIBUTIONS
The Series Capital Securities represent undivided beneficial interests in
the assets of the Series Issuer. The ability of the Series Issuer to
make timely payments of Distributions on the Series Capital Securities is
solely dependent upon the Corporation making interest payments on the Series
Subordinated Debentures as and when required. Distributions on
Series Capital Securities will be payable at the annual rate of % of the
stated Liquidation Amount of $1,000, payable semi-annually in arrears on
and of each year, to the holders of the Series Capital Securities on
the relevant record dates. The record dates for the Series Capital
Securities will be, for so long as the Series Capital Securities remain in
book-entry form, one Business Day (as defined in the accompanying Prospectus)
prior to the relevant Distribution payment date and, in the event the
Series Capital Securities are not in book-entry form, the 15th day of the
month immediately preceding the relevant Distribution payment date.
Distributions will accumulate from the date of original issuance. The first
Distribution payment date for the Series Capital Securities will be .
The amount of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. The amount of Distributions
for any partial period will be computed on the basis of a 360-day year of
twelve 30-day months and the number of days elapsed in a partial month. In the
event that any date on which Distributions are payable on the Series Capital
Securities is not a Business Day, then payment of the Distributions payable on
such date will be made on the next succeeding day that is a Business Day (and
without any additional Distributions 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. See "Description of Securities--Distributions" in the
accompanying Prospectus.
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series Subordinated Debentures at any time or from time
to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period; provided that no Extension Period may extend
beyond the Stated Maturity of the Series Subordinated Debentures. As a
consequence of any such deferral of interest payments by the Corporation,
semi-annual Distributions on the Series Capital Securities by the
Series Issuer will also be deferred during any such Extension Period.
Distributions to which holders of the Series Capital Securities are entitled
will accumulate additional Distributions thereon at the rate of % per
annum, compounded semi-annually from the relevant payment date for such
Distributions. The term "Distributions" as used herein shall include any such
additional Distributions. During any such Extension Period, the Corporation
may not (i) declare
S-14
<PAGE>
or pay any dividends or distributions on, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of the Corporation's capital stock
or (ii) make any payment of principal or of interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation (including
other series of Junior Subordinated Debentures) that, in either case, rank pari
passu with or junior in interest to the Series Subordinated Debentures or
make any guarantee payments with respect to any guarantee by the Corporation of
the debt securities of any subsidiary of the Corporation if such guarantee
ranks pari passu with or junior in interest to the Series Securities (other
than (a) dividends or distributions in capital stock of the Corporation,
(b) any declaration of a dividend under a stockholders' rights plan or in
connection with the implementation of a stockholders' rights plan, the issuance
of capital stock of the Corporation under a stockholders' rights plan or the
redemption or repurchase of any such rights distributed pursuant to a
stockholders' rights plan, (c) payments under the Series Guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees, related to the issuance of common stock or rights under a dividend
reinvestment and stock purchase plan or related to the issuance of common stock
(or securities convertible into or exchangeable for common stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Corporation may further defer the payment of interest on
the Series Subordinated Debentures; provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Series Subordinated Debentures. During an Extension Period, the
Corporation will have the right to make partial payments of interest on any
Interest Payment Date. Upon the termination of any such Extension Period and
the payment of all interest then accrued and unpaid (together with interest
thereon at the annual rate of %, compounded semi-annually from the Interest
Payment Date for such interest, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "Certain Terms of Series Subordinated Debentures--Option to Defer
Interest Payments" and "Certain Federal Income Tax Consequences--Interest
Income and Original Issue Discount".
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Series Subordinated Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the
Series Subordinated Debentures, whether at Stated 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 (as
defined in the accompanying Prospectus) of the Series Securities. See
"Description of Securities--Redemption or Distribution--Mandatory Redemption"
in the accompanying Prospectus. The Corporation has the right to redeem the
Series Subordinated Debentures (i) on or after , in whole at any time
or in part from time to time, or (ii) prior to , in whole (but not in
part) within 90 days following the occurrence of a Special Event. A redemption
of the Series Subordinated Debentures would cause a mandatory redemption of
the Series Securities. At any time, the Corporation has the right to direct
the Property Trustee to dissolve the Series Issuer and, after satisfaction of
the liabilities of creditors of the Series Issuer as provided by applicable
law, cause the Series Subordinated Debentures to be distributed to the
holders of the Series Securities. If a Special Event has occurred and is
continuing and the Corporation does not elect either option discussed above,
the Series Securities will remain outstanding and Additional Sums may be
payable on the Series Subordinated Debentures.
S-15
<PAGE>
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices expressed in percentages of the Liquidation Amount
together with accrued Distributions to but excluding the Redemption Date. If
redeemed during the 12-month period beginning :
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
</TABLE>
and at 100% on or after .
The Redemption Price, in the case of a redemption following a Special Event
as described under (ii) above, shall equal for Series Capital Securities
the Make-Whole Amount for a corresponding $1,000 principal amount of Series
Subordinated Debentures together with accrued Distributions to but
excluding the Redemption Date. The "Make-Whole Amount" shall be equal to the
greater of (i) 100% of the principal amount of such Series Subordinated
Debentures or (ii) as determined by a Quotation Agent (as defined below), the
sum of the present values of the principal amount and premium payable as part
of the Redemption Price with respect to an optional redemption of such Series
Subordinated Debentures on , together with scheduled payments of
interest from the Redemption Date to (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined below).
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate (as defined below) plus (i) % if such Redemption Date occurs
on or before or (ii) % if such Redemption Date occurs after .
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities", for the maturity corresponding to the Remaining Life (if
no maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue (as defined below), calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate shall be calculated on the third Business Day
preceding the Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption Date, the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time
of selection and in accordance with customary financial practice,
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in pricing new issues of corporate debt securities of comparable maturity to
the Remaining Life. If no United States Treasury security has a maturity which
is within a period from three months before to three months after , the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using
such securities.
"Comparable Treasury Price" means (i) the average of five Reference Treasury
Dealer Quotations (as defined below) for such Redemption Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (ii)
if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Quotation Agent" means Goldman, Sachs & Co. and its successors; provided,
however, that if the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Corporation shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any other
Primary Treasury Dealer selected by the Corporation.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date.
LIQUIDATION OF SERIES ISSUER AND DISTRIBUTION OF SERIES SUBORDINATED
DEBENTURES TO HOLDERS
The Corporation will have the right at any time to direct the Property
Trustee to dissolve the Series Issuer and, after satisfaction of liabilities
to creditors of the Series Issuer as required by applicable law, cause the
Series Subordinated Debentures to be distributed to the holders of the
Series Securities. See "Description of Securities--Liquidation Distribution
Upon Termination" in the accompanying Prospectus.
Under current United States federal income tax law and interpretations, a
distribution of the Series Subordinated Debentures upon dissolution and
winding up of the Series Issuer should not be a taxable event to holders of
the Series Capital Securities. Should there be a change in law, a change in
legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to holders of the Series Capital
Securities. See "Certain Federal Income Tax Consequences--Distribution of
Series Subordinated Debentures to Holders of Series Capital
Securities". If the Corporation elects neither to redeem the Series
Subordinated Debentures prior to maturity nor to liquidate the Series Issuer
and distribute the Series Subordinated Debentures to holders of the
Series Capital Securities, the Series Capital Securities will remain
outstanding until the Stated Maturity of the Series Subordinated
Debentures.
LIQUIDATION VALUE
The amount payable on each of the Series Capital Securities in the event
of any liquidation of the Series Issuer is $1,000 plus accumulated and
unpaid Distributions, which amount may be paid in the form of a distribution
of a Like Amount in Series Subordinated Debentures, subject to certain
exceptions. See "Description of Securities--Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
S-17
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EVENTS OF DEFAULT; NOTICE; REMOVAL OF TRUSTEES
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement with respect to the Series Capital Securities issued
thereunder (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 Junior Subordinated Debentures--Debenture Events of
Default" in the accompanying Prospectus);
(ii) default by the Series Issuer in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days;
(iii) default by the Series Issuer in the payment of any Redemption
Price of any Series Security when it becomes due and payable;
(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 90 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees and the Corporation by the holders of at least 25% in
aggregate Liquidation Amount of the outstanding Series Capital
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 or insolvency with
respect to the Series Issuer.
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee (as defined in
the Trust Agreement), the Property Trustee shall transmit notice of such Event
of Default to the holders of the Series Securities, the Administrative
Trustees and the Corporation, as Depositor, unless such Event of Default shall
have been cured or waived. If an Event of Default shall have occurred and is
continuing, the Property Trustee shall enforce the Trust Agreement for the
benefit of the holders of the Series Securities. The Corporation, 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 an Event of Default resulting from any Debenture Event of Default occurs
and is continuing, then, pursuant to the Trust Agreement, holders of a
majority in aggregate Liquidation Amount of Series Capital Securities will
have the right to direct the exercise of any trust or power conferred upon the
Property Trustee under the Trust Agreement. Upon a Debenture Event of Default
specified in clause (i) or clause (ii) in the list of Debenture Events of
Default, a holder of Series Capital Securities may institute a legal
proceeding directly against the Corporation, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on the
Series Subordinated Debentures having a principal amount equal to the
aggregate stated Liquidation Amount of the Series Capital Securities of
such holder. See "Relationship Among the Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreement and the Guarantees" in the
accompanying Prospectus.
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If a Debenture Event of Default has occurred and is continuing, the Series
Capital Securities shall have a preference over the Series Common
Securities. See "Description of Securities--Subordination of Common Securities"
and "--Liquidation Distribution Upon Termination" in the accompanying
Prospectus. The existence of an Event of Default, other than an Event of
Default described in clause (i) above, does not entitle the holders of Series
Capital Securities to accelerate the maturity thereof. Following an Event of
Default as described in clause (i) above, the holders of at least 25% in
aggregate Liquidation Amount of the outstanding Series Capital Securities
will have the right to declare the principal of all of the Series
Subordinated Debentures to be immediately due and payable as set forth in the
Indenture.
Unless a Debenture Event of Default shall have occurred and be continuing,
each of the Property Trustee, the Delaware Trustee and the Administrative
Trustees of the Series Issuer may be removed at any time by act of the
Corporation as the holder of the Series Common Securities. If a Debenture
Event of Default has occurred and is continuing with regard to the
Series Issuer, the Property Trustee and the Delaware Trustee may be removed
at such time by act of the holders of a majority in Liquidation Amount of the
Series Capital Securities, delivered to such Trustee (in its individual
capacity and, in the case of the Property Trustee, on behalf of the
Series Issuer). No resignation or removal of any Trustee and no appointment
of a successor Trustee will be effective until the acceptance of appointment by
the successor Trustee in accordance with the requirements of the Trust
Agreement.
REGISTRATION OF SERIES CAPITAL SECURITIES
The Series Capital Securities will be represented by global certificates
registered in the name of DTC or its nominee. Beneficial interests in the
Series Capital Securities will be shown on, and transfers thereof will be
effected only through, records maintained by participants in DTC. Except as
described below and in the accompanying Prospectus, Series Capital Securities
in certificated form will not be issued in exchange for the global
certificates. See "Book-Entry Issuance" in the accompanying Prospectus.
A global security shall be exchangeable for Series Capital Securities
registered in the names of persons other than DTC or its nominee only if (i)
DTC notifies the Series Issuer that it is unwilling or unable to continue as
a depositary for such global security and no successor depositary shall have
been appointed, or if at any time DTC ceases to be a clearing agency registered
under the Exchange Act at a time when DTC is required to be so registered to
act as such depositary, (ii) the Series Issuer in its sole discretion
determines that such global security shall be so exchangeable or (iii) there
shall have occurred and be continuing an event of default under the Indenture
with respect to the Series Subordinated Debentures. Any global security that
is exchangeable pursuant to the preceding sentence shall be exchangeable for
definitive certificates registered in such names as DTC shall direct. It is
expected that such instructions will be based upon directions received by DTC
from its Participants (as defined in the accompanying Prospectus) with respect
to ownership of beneficial interests in such global security. In the event that
Series Capital Securities are issued in definitive form, such
Series Capital Securities will be in denominations of $1,000 and integral
multiples thereof and may be transferred or exchanged at the offices described
below.
Payments on Series Capital Securities represented by a global security will
be made to DTC, as the depositary for the Series Capital Securities. In the
event Series Capital Securities are issued in certificated form, the
Liquidation Amount and Distributions will be payable, the transfer of the
Series Capital Securities will be registrable, and Series Capital
Securities will be exchangeable for Series Capital Securities of other
denominations of a like aggregate Liquidation Amount, at the corporate office
of the Property Trustee in New York, New York, or at the offices of any paying
agent or transfer agent appointed by the Administrative Trustees; provided that
payment of any Distribution may be made at the option of the Administrative
Trustees by check mailed
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to the address of the persons entitled thereto or by wire transfer. In
addition, if the Series Capital Securities are issued in certificated form,
the record dates for payment of Distributions will be the 15th day of the
month immediately preceding the relevant Distribution payment date. For a
description of DTC and the terms of the depositary arrangements relating to
payments, transfers, voting rights, redemptions and other notices and other
matters, see "Book-Entry Issuance" in the accompanying Prospectus.
CERTAIN TERMS OF SERIES SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the
Series Subordinated Debentures supplements the description of the terms and
provisions of the Corresponding Junior Subordinated Debentures (as defined in
the accompanying Prospectus) set forth in the accompanying Prospectus under
the heading "Description of Junior Subordinated Debentures", to which
description reference is hereby made. The summary of certain terms and
provisions of the Series Subordinated Debentures set forth below, which
describes the material provisions thereof, does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the Indenture to
which description reference is hereby made. The form of Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and accompanying Prospectus form a part.
Concurrently with the issuance of the Series Capital Securities, the
Series Issuer will invest the proceeds thereof, together with the
consideration paid by the Corporation for the Series Common Securities, in
the Series Subordinated Debentures issued by the Corporation. The
Series Subordinated Debentures will bear interest at the annual rate of %
of the principal amount thereof, payable semi-annually in arrears on and
of each year (each, an "Interest Payment Date"), commencing , to the
person in whose name each Series Subordinated Debenture is registered at the
close of business on the Business Day next preceding such Interest Payment
Date. It is anticipated that, until the liquidation, if any, of the
Series Issuer, each of the Series Subordinated Debentures will be held by
the Property Trustee in trust for the benefit of the holders of the
Series Capital 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. The
amount of interest payable for any partial period will be computed on the
basis of a 360-day year of twelve 30-day months and the number of days elapsed
in a partial month. In the event that any date on which interest is payable on
the Series Subordinated Debentures is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on the
date such payment was originally payable. Accrued interest that is not paid on
the applicable Interest Payment Date will bear additional interest on the
amount thereof (to the extent permitted by law) at the rate of % per annum,
compounded semi-annually from the relevant Interest Payment Date. The term
"interest" as used herein shall include semi-annual interest payments,
interest on semi-annual interest payments not paid on the applicable Interest
Payment Date and Additional Sums, as applicable.
The Series Subordinated Debentures will be issued as a series of junior
subordinated deferrable interest debentures under the Indenture. The
Series Subordinated Debentures will be issuable only in registered form
without coupons in denominations of $1,000 and any integral multiples thereof.
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The Series Subordinated Debentures will mature on , subject to
advancement as described under "--Conditional Right to Advance Maturity".
The Series Subordinated Debentures are not subject to any sinking fund
provisions.
The Series Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all existing and future Senior Debt
of the Corporation. Substantially all of the Corporation's existing
indebtedness constitutes Senior Debt. At September 30, 1996, the Senior Debt
of the Corporation aggregated approximately $3.0 billion. If the Transaction
is consummated using the Alternative Merger, Senior Debt of the Corporation
will be substantially increased. See "Recent Developments; NorAm Merger" in
the accompanying Prospectus. None of the Indenture, the related Guarantee, the
related Trust Agreement or the Expense Agreement places any limitation on the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Debt, whether under the Indenture, any existing indenture or
any other indenture that the Corporation may enter into in the future or
otherwise. See "Risk Factors--Ranking of Subordinated Obligations Under the
Series Guarantee and the Series Subordinated Debentures" herein and
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
OPTION TO DEFER INTEREST PAYMENTS
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture at any time or
from time to time during the term of the Series Subordinated Debentures to
defer payment of interest on the Series Subordinated Debentures for a period
not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period; provided that no Extension Period may extend beyond the
Stated Maturity of the Series Subordinated Debentures. During an Extension
Period, the Corporation will have the right to make partial payments of
interest on any Interest Payment Date. At the end of such Extension Period,
the Corporation must pay all interest then accrued and unpaid on the
Series Subordinated Debentures (together with interest on such unpaid
interest, to the extent permitted by applicable law, at the annual rate of
%, compounded semi-annually from the relevant Interest Payment Date).
During an Extension Period, a holder of Series Subordinated Debentures (or a
holder of Series Capital Securities while such series is outstanding) will
be required to accrue income (in the form of original issue discount) for
United States federal income tax purposes. See "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount".
During any such Extension Period, the Corporation 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 Corporation's capital stock or
(ii) make any payment of principal or of interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation (including
other series of Junior Subordinated Debentures) that, in either case, rank
pari passu with or junior in interest to the Series Subordinated Debentures
or make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation if
such guarantee ranks pari passu with or junior in interest to the
Series Securities (other than (a) dividends or distributions in capital
stock of the Corporation, (b) any declaration of a dividend under a
stockholders' rights plan or in connection with the implementation of a
stockholders' rights plan, the issuance of capital stock of the Corporation
under a stockholders' rights plan or the redemption or repurchase of any such
rights distributed pursuant to a stockholders' rights plan, (c) payments under
the Series Guarantee and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit
plans for its directors, officers or employees,
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related to the issuance of common stock or rights under a dividend reinvestment
and stock purchase plan or related to the issuance of common stock (or
securities convertible into or exchangeable for common stock) as consideration
in an acquisition transaction that was entered into prior to the commencement
of such Extension Period). Prior to the termination of any such Extension
Period, the Corporation may further defer the payment of interest on the Series
Subordinated Debentures; provided that no Extension Period may exceed
10 consecutive semi-annual periods or extend beyond the Stated Maturity of the
Series Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all interest then accrued and unpaid (together with
interest thereon at the annual rate of %, compounded semi-annually from the
relevant Interest Payment Date, to the extent permitted by applicable law), the
Corporation 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 Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election to
begin such Extension Period at least one Business Day prior to the earliest of
(i) the date Distributions on the Series Capital Securities would have been
payable except for the election to begin such Extension Period, (ii) the date
the Administrative Trustees are required to give notice to the New York Stock
Exchange, the Nasdaq National Market or other applicable stock exchange or
automated quotation system on which the Series Capital Securities are then
listed or quoted or to holders of Series Subordinated Debentures on the
record date for such Distributions or (iii) the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date. The Debenture Trustee shall give notice of the Corporation's election to
begin a new Extension Period to the holders of the Series Subordinated
Debentures. There is no limitation on the number of times that the Corporation
may elect to begin an Extension Period. See "Description of Junior Subordinated
Debentures--Option to Defer Interest Payments" in the accompanying Prospectus.
ADDITIONAL SUMS
If the Series Issuer is required to pay any additional taxes, duties or
other governmental charges as a result of a Special Event, the Corporation will
pay as additional amounts on the Series Subordinated Debentures such amounts
as shall be required so that the Distributions payable by the Series Issuer
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges.
In the Expense Agreement, the Corporation, as the holder of the
Series Common Securities, has agreed to pay all debts and other obligations,
other than with respect to the Series Capital Securities, and all costs and
expenses of the Series Issuer. Such obligations, costs and expenses will
include, among others, costs and expenses relating to the organization of the
Series Issuer, the fees and expenses of the Trustees and the costs and
expenses relating to the operation of the Series Issuer.
REDEMPTION
The Series Subordinated Debentures are redeemable prior to maturity at the
option of the Corporation (i) on or after , in whole at any time or in part
from time to time, or (ii) prior to , in whole (but not in part) within 90
days following the occurrence of a Special Event in each case at the Redemption
Price described below. The proceeds of any such redemption will be used by the
Series Issuer to redeem the Series Securities.
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The Redemption Price in the case of a redemption under (i) above shall equal
the following prices, expressed in percentages of the principal amount,
together with accrued interest to but excluding the Redemption Date. If
redeemed during the 12-month period beginning :
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
..........................................................
</TABLE>
and at 100% on or after .
The Redemption Price, in the case of a redemption following a Special Event
as described under (ii) above, shall equal the Make-Whole Amount (as defined
under "Certain Terms of Series Capital Securities--Redemption"), together
with accrued interest to but excluding the Redemption Date.
DISTRIBUTION OF SERIES SUBORDINATED DEBENTURES
As described under "Certain Terms of Series Capital Securities--
Liquidation of Series Issuer and Distribution of Series Subordinated
Debentures to Holders", under certain circumstances involving the termination
of the Series Issuer, Series Subordinated Debentures may be distributed to
the holders of the Series Capital Securities upon liquidation of the
Series Issuer after satisfaction of liabilities to creditors of the Series
Issuer as provided by applicable law. If distributed to holders of Series
Capital Securities, the Series Subordinated Debentures will initially
be issued in the form of one or more global securities and DTC, or any
successor depositary for the Series Capital Securities, will act as
depositary for the Series Subordinated Debentures. There can be no assurance
as to the market price of any Series Subordinated Debentures that may be
distributed to the holders of Series Capital Securities.
CONDITIONAL RIGHT TO ADVANCE MATURITY
If a Tax Event occurs, then the Corporation will have the right (a) prior to
the dissolution of the Series Issuer, to advance the Stated Maturity of the
Series Subordinated Debentures to the minimum extent required, but not less
than 19 and one-half years from the date of original issuance thereof, or (b)
to direct the Property Trustee to dissolve the Series Issuer (if not
previously dissolved) and advance the Stated Maturity of the Series
Subordinated Debentures to the minimum extent required, but not less than 19
and one-half years from the date of original issuance thereof, in each case
such that in the opinion of counsel to the Corporation experienced in such
matters, after advancing the Stated Maturity, interest paid on the
Series Subordinated Debentures will be deductible for federal income tax
purposes.
REGISTRATION OF SERIES SUBORDINATED DEBENTURES
The Series Subordinated Debentures will be registered in the name of the
Property Trustee on behalf of the Series Issuer. In the event that the
Series Debentures are distributed to
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holders of Series Capital Securities, it is anticipated that the depositary
and other arrangements for the Series Subordinated Debentures will be
substantially identical to those in effect for the Series Capital
Securities. See "Certain Terms of Series Capital Securities--Registration of
Series Capital Securities".
CERTAIN TERMS OF SERIES GUARANTEE
Pursuant to the Series Guarantee, the Corporation guarantees to the
holders of the Series Securities the following payments, to the extent not
paid by the Series Issuer: (i) any accumulated and unpaid Distributions
required to be paid on the Series Securities, to the extent that the Series
Issuer has funds on hand available therefor at such time, (ii) the
Redemption Price with respect to any Series Securities called for
redemption, to the extent that the Series Issuer has funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution and winding-up of the Series Issuer (unless the Series
Subordinated Debentures are distributed to holders of the Series
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment and (b) the amount
of assets of the Series Issuer remaining available for distribution to
holders of the Series Securities in liquidation of the Series Issuer
after payment of creditors of the Series Issuer as required by applicable
law. The Series Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Bank of New York will act as the Guarantee Trustee for the
purposes of compliance with the Trust Indenture Act and will hold the Series
Guarantee for the benefit of the holders of the Series Securities. The
Bank of New York will also act as Debenture Trustee for the Series
Subordinated Debentures and as Property Trustee.
The holders of not less than a majority in aggregate Liquidation Amount of
the Series 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 to the Series Guarantee or to direct the exercise of any trust
power conferred upon the Guarantee Trustee under the Series Guarantee. Any
holder of the Series Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Series Guarantee
without first instituting a legal proceeding against the Series Issuer, the
Guarantee Trustee or any other person or entity. If the Corporation were to
default on its obligation to pay amounts payable under the Series
Subordinated Debentures, the Series Issuer would lack funds for the payment
of Distributions or amounts payable on redemption of the Series Securities
or otherwise, and, in such event, holders of the Series Securities would
not be able to rely upon the Series Guarantee for payment of such amounts.
Instead, if any Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the Corporation to
pay interest or premium, if any, on or principal of the Series Subordinated
Debentures on the applicable payment date, then a holder of Series
Securities may institute a Direct Action against the Corporation pursuant to
the terms of the Indenture for enforcement of payment to such holder of the
principal of or interest or premium, if any, on such Series Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Series Securities of such holder. In connection with such Direct
Action, the Corporation will have a right of set-off under the Indenture to
the extent of any payment made by the Corporation to such holder of Series
Securities in the Direct Action. Except as described herein, holders of Series
Securities will not be able to exercise directly any other remedy available
to the holders of the Series Subordinated Debentures or assert directly any
other rights in respect of the Series Subordinated Debentures. See
"Description of Guarantees" in the accompanying Prospectus. The Trust
Agreement provides that each holder of Series Securities by acceptance
thereof agrees to the provisions of the Series Guarantee, the Expense
Agreement and the Indenture.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Series Capital
Securities. This summary only addresses the tax consequences to a person that
acquires Series Capital Securities on their original issue at their original
offering price and that is (i) an individual citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any state thereof or the District of Columbia or (iii) an
estate or trust, the income of which is subject to United States federal
income tax regardless of source (a "United States Person"). This summary does
not address all tax consequences that may be applicable to a United States
Person that is a beneficial owner of Series Capital Securities, nor does it
address the tax consequences to (i) persons that are not United States
Persons, (ii) persons that may be subject to special treatment under United
States federal income tax law such as banks, insurance companies, thrift
institutions, regulated investment companies, real estate investment trusts,
tax-exempt organizations and dealers in securities or currencies, (iii)
persons that will hold Series Capital Securities as part of a position in a
"straddle" or as part of a "hedging", "conversion" or other integrated
investment transaction for federal income tax purposes, (iv) persons whose
functional currency is not the United States dollar or (v) persons that do not
hold Series Capital Securities as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Baker & Botts, L.L.P., counsel to the Corporation
and the Series Issuer. This summary is based upon the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue
Service rulings and pronouncements and judicial decisions in effect on the
date of this Prospectus Supplement, all of which are subject to change at any
time. Such changes may be applied retroactively in a manner that could cause
the tax consequences to vary substantially from the consequences described
below, possibly adversely affecting a beneficial owner of Series Capital
Securities. In particular, legislation was previously proposed that could have
adversely affected the Corporation's ability to deduct interest on the
Series Subordinated Debentures, which would in turn have permitted the
Corporation to cause a redemption of the Series Capital Securities or to
advance the Stated Maturity of the Series Subordinated Debentures. See "--
Possible Tax Law Changes" and "Certain Terms of Series Subordinated
Debentures--Conditional Right to Advance Maturity". The authorities on which
this summary is based are subject to various interpretations, and it is
therefore possible that the federal income tax treatment of the purchase,
ownership and disposition of Series Capital Securities may differ from the
treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS IN LIGHT
OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES OF
THE PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES CAPITAL SECURITIES, AS
WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE SERIES ISSUER
Assuming compliance with the terms of the Trust Agreement and certain
similar factual matters, the Series Issuer will be classified as a grantor
trust and will not be classified as an association taxable as a corporation
for United States federal income tax purposes. As a result, each beneficial
owner of Series Capital Securities (a "Securityholder") will be required to
include in its gross income its pro rata share of the interest income,
including original issue discount, paid or accrued with respect to the
Series Subordinated Debentures whether or not cash is actually distributed
to the Securityholders. See "--Interest Income and Original Issue Discount".
S-25
<PAGE>
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury Regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with original issue discount ("OID"). The
Corporation believes that the likelihood of its exercising its option to defer
payments is remote. Based on the foregoing, the Series Subordinated
Debentures will not be considered to be issued with OID at the time of their
original issuance and, accordingly, a Securityholder should include in gross
income such Securityholder's allocable share of interest on the
Series Subordinated Debentures in accordance with such Securityholder's
method of tax accounting.
Under the Regulations, if the Corporation exercised its option to defer any
payment of interest, the Series Subordinated Debentures would at that time
be treated as issued with OID, and all stated interest on the Series
Subordinated Debentures would thereafter be treated as OID as long as the
Series Subordinated Debentures remained outstanding. In such event, all of a
Securityholder's taxable interest income with respect to the Series
Subordinated Debentures would be accounted for as OID on an economic accrual
basis regardless of such Securityholder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable income.
Consequently, a Securityholder would be required to include in gross income
OID even though the Corporation would not make any actual cash payments during
an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"), and it is
possible that the IRS could take a position contrary to the interpretation
herein.
Because income on the Series Capital Securities will constitute interest
or OID, corporate Securityholders will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the
Series Capital Securities.
Subsequent uses of the term "interest" in this summary include income in the
form of OID.
DISTRIBUTION OF SERIES SUBORDINATED DEBENTURES TO HOLDERS OF
SERIES CAPITAL SECURITIES
A distribution by the Series Issuer of the Series Subordinated
Debentures, as described under the caption "Certain Terms of Series Capital
Securities--Liquidation of Series Issuer and Distribution of
Series Subordinated Debentures to Holders", will be non-taxable and will
result in the Securityholder receiving directly its pro rata share of the
Series Subordinated Debentures previously held indirectly through the
Series Issuer, with a holding period and aggregate tax basis equal to the
holding period and aggregate tax basis such Securityholder had in its
Series Capital Securities before such distribution. If, however, the
liquidation of the Series Issuer were to occur because the Series Issuer
is subject to United States federal income tax with respect to income accrued
or received on the Series Subordinated Debentures, the distribution of
Series Subordinated Debentures to Securityholders by the Series Issuer
would be a taxable event to the Series Issuer and each Securityholder, and
the Securityholder would recognize gain or loss as if the Securityholder had
exchanged its Series Capital Securities for the Series Subordinated
Debentures it received upon the liquidation of the Series Issuer. A
Securityholder will include interest income in respect of
Series Subordinated Debentures received from the Series Issuer in the
manner described above under "--Interest Income and Original Issue Discount".
Under certain circumstances described herein (see "Certain Terms of
Series Subordinated Debentures--Redemption" and "Certain Terms of
Series Capital Securities--Redemption"), the
S-26
<PAGE>
Series Subordinated Debentures may be redeemed by the Corporation for cash
and the proceeds of such redemption distributed by the Series Issuer to
holders in redemption of their Series Capital Securities. Under current law,
such a redemption would, for United States federal income tax purposes,
constitute a taxable disposition of the redeemed Series Capital Securities,
and a holder could recognize gain or loss as if it sold such redeemed
Series Capital Securities for cash. See "--Sales or Redemption of
Series Capital Securities".
SALE OR REDEMPTION OF SERIES CAPITAL SECURITIES
A Securityholder that sells (including a redemption for cash)
Series Capital Securities will recognize gain or loss equal to the
difference between its adjusted tax basis in the Series Capital Securities
and the amount realized on the sale of such Series Capital Securities. The
amount realized is equal to the cash received, less the amount of accrued and
unpaid interest with respect to the Securityholder's pro rata share of the
Series Subordinated Debentures. A Securityholder must include his share of
such accrued and unpaid interest as ordinary income. Assuming that the
Corporation does not exercise its option to defer payment of interest on the
Series Subordinated Debentures and the Series Capital Securities are not
considered issued with OID, a Securityholder's adjusted tax basis in the
Series Capital Securities generally will be its initial purchase price. If
the Series Subordinated Debentures are deemed to be issued with OID as a
result of the Corporation's deferral of any interest payment or otherwise, a
Securityholder's tax basis in the Series Capital Securities generally will
be its initial purchase price, increased by OID previously includible in such
Securityholder's gross income to the date of disposition and decreased by
distributions or other payments received on the Series Capital Securities
since and including the date of the first Extension Period. Such gain or loss
generally will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Series Capital Securities have been held for
more than one year.
Should the Corporation exercise its option to defer any payment of interest
on the Series Subordinated Debentures, the Series Capital Securities may
trade at a price that does not accurately reflect the value of accrued but
unpaid interest with respect to the underlying Series Subordinated
Debentures. In the event of such a deferral, a Securityholder who disposes of
its Series Capital Securities between record dates for payments of
distributions thereon will be required to include in income as ordinary income
accrued but unpaid interest on the Series Subordinated Debentures to the
date of disposition as OID and to add such amount to its adjusted tax basis in
its pro rata share of the underlying Series Subordinated Debentures deemed
disposed of. To the extent the selling price is less than the Securityholder's
adjusted tax basis, such Securityholder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid or accrued on the Series Capital
Securities held of record by United States Persons (other than corporations
and other exempt Securityholders) will be reported to the IRS. "Backup"
withholding at a rate of 31% will apply to payments of interest to non-exempt
United States Persons unless the Securityholder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
Regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
Payment of the proceeds from the disposition of Series Capital Securities
to or through the United States office of a broker is subject to information
reporting and backup withholding unless the Securityholder or beneficial owner
establishes an exemption from information reporting and backup withholding.
S-27
<PAGE>
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability; provided the required information
is furnished to the IRS.
It is anticipated that income on the Series Capital Securities will be
reported to holders on Form 1099 and mailed to holders of the Series Capital
Securities by January 31 following each calendar year.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's 1996 budget proposal, was introduced to
the 104th Congress. The Bill would have, among other things, generally denied
interest deductions for interest accrued on an instrument issued by a
corporation that had a maximum term of more than 20 years and that was not
shown as indebtedness on the separate balance sheet of the issuer or, where
the instrument was issued to a related party (other than a corporation), where
the holder or some other related party issued a related instrument that was
not shown as indebtedness on the issuer's consolidated balance sheet. The Bill
would have also generally denied interest deductions for interest on an
instrument issued by a corporation that had a maximum weighted-average
maturity of more than 40 years. The above-described provisions of the Bill
were proposed to be effective generally for instruments issued on or after
December 7, 1995. If this provision were to apply to the Series
Subordinated Debentures, the Corporation would not be able to deduct interest
on the Series 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. Under current law, the
Corporation will be able to deduct interest on the Series Subordinated
Debentures. Although the 104th Congress adjourned without enacting the above-
described provisions of the Bill, there can be no assurance that current or
future legislative proposals or final legislation will not adversely affect
the ability of the Corporation to deduct interest on the Series Subordinated
Debentures. Such a change could give rise to a Tax Event, which would permit
the Corporation to cause a redemption of the Series Capital Securities
before . See "Certain Terms of Series Subordinated Debentures--
Redemption" and "Certain Terms of the Series Subordinated Debentures--
Conditional Right to Advance Maturity" in this Prospectus Supplement and
"Description of Preferred Securities--Redemption or Distribution--Distribution
of the Corresponding Junior Subordinated Debentures" in the accompanying
Prospectus.
ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing or other employee benefit plan (an
"ERISA Plan") subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), should consider the fiduciary standards of ERISA in the
context of the ERISA Plan's particular circumstances before authorizing an
investment in the Series Capital Securities. Among other factors, the
fiduciary should consider whether such an investment is in accordance with the
documents governing the ERISA Plan and whether the investment is appropriate
for the ERISA Plan in view of its overall investment policy and
diversification of its portfolio.
Certain provisions of ERISA and the Code prohibit ERISA Plans, as well as
individual retirement accounts and Keogh plans subject to section 4975 of the
Code (collectively, "Plans"), from engaging in certain transactions involving
"plan assets" with parties that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to the Plan. The U.S.
Department of Labor has issued a final regulation (the "Regulation") with
regard to whether the underlying assets of an entity in which employee benefit
plans acquire equity interests are deemed to be plan assets.
S-28
<PAGE>
Under such Regulation, for purposes of ERISA and section 4975 of the Code,
the assets of the Series Issuer would be deemed to be "plan assets" of a
Plan whose assets were used to purchase Series Capital Securities if the
Series Capital Securities were considered to be equity interests in the
Series Issuer and no exception to plan asset status were applicable under
the Regulation.
If the assets of the Series Issuer were deemed to be plan assets of Plans
that are holders of the Series Capital Securities, a Plan's investment in
the Series Capital Securities might be deemed to constitute a delegation
under ERISA of the duty to manage plan assets by a fiduciary investing in
Series Capital Securities. In addition, the Corporation might be considered
a "party in interest" or "disqualified person" with respect to Plans whose
assets were used to purchase Series Capital Securities. If this were the
case, an investment in Series Capital Securities by a Plan might constitute
or, in the course of the operation of the Series Issuer, give rise to a
prohibited transaction under ERISA or the Code. In particular, it is likely
that, under such circumstances, a prohibited "extension of credit" to the
Corporation would be considered to occur under ERISA and the Code.
Because of the possibility that the assets of the Series Issuer would be
considered plan assets of Plans whose assets were invested in the
Series Capital Securities, and the likelihood that under such circumstances
a prohibited extension of credit would occur, the Series Capital Securities
may be not purchased or held by any Plan or any person investing "plan assets"
of any Plan, unless such purchaser or holder is eligible for the exemptive
relief available under PTCE 96-23 (for certain transactions determined by in-
house asset managers), PTCE 95-60 (for certain transactions involving
insurance company general accounts), PTCE 91-38 (for certain transactions
involving bank collective investment funds), PTCE 90-1 (for certain
transactions involving insurance company separate accounts), or PTCE 84-14
(for certain transactions determined by independent qualified asset managers).
Any purchaser or holder of the Series Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (a) is not a Plan and is not purchasing such securities on
behalf of or with "plan assets" of any Plan or (b) is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
Due to the complexity of these rules and the penalties imposed upon persons
involved in prohibited transactions, it is important that any person
considering the purchase of Series Capital Securities with Plan assets
consult with its counsel regarding the consequences under ERISA and the Code
of the acquisition and ownership of Series Capital Securities and the
availability of exemptive relief under the class exemptions listed above.
Employee benefit plans which are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of
ERISA) generally are not subject to ERISA requirements.
S-29
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Corporation and the Series Issuer have agreed that the Series Issuer will
sell to each of the Underwriters named below, and each of such Underwriters
has severally agreed to purchase from the Series Issuer, the respective
number of Series Capital Securities set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF SERIES
UNDERWRITER CAPITAL SECURITIES
----------- -------------------
<S> <C>
Goldman, Sachs & Co......................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
----
Total..................................................
====
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Series Capital
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series Capital Securities in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement and in part to certain dealers at
such price less a concession of $ per Series Capital Security. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Series Capital Security to certain brokers and dealers.
After the Series Capital Securities are released for sale to the public,
the offering price and other selling terms may from time to time be varied by
the Underwriters.
In view of the fact that the proceeds from the sale of the Series
Capital Securities will be used to purchase the Series Subordinated
Debentures issued by the Corporation, the Underwriting Agreement provides that
the Corporation will pay as Underwriters' compensation for the Underwriters'
arranging the investment therein of such proceeds an amount of $ per Series
Capital Security for the accounts of the several Underwriters.
The Corporation and the Series Issuer have agreed that, during the
period beginning on the date of the Underwriting Agreement and continuing to
and including the date of delivery of the Series Capital Securities to the
Underwriters in accordance with the Underwriting Agreement, they will not
offer, sell, contract to sell or otherwise dispose of any Series Capital
Securities, any security convertible into or exchangeable into or exercisable
for Series Capital Securities or Series Subordinated Debentures or any
debt securities substantially similar to the Series Subordinated
Debentures or any equity securities substantially similar to the Series
Capital Securities (except for the Series Subordinated Debentures and the
Series Capital Securities issued pursuant to the Underwriting Agreement),
without the prior written consent of the Underwriters.
S-30
<PAGE>
Prior to this offering, there has been no public market for the
Series Capital Securities. The Underwriters have advised the Corporation
that they intend to make a market in the Series Capital Securities, 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 Series Capital Securities.
The Corporation and the Series Issuer have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
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 Corporation and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the
Series Capital Securities, the enforceability of the Trust Agreement and the
formation of the Series Issuer will be passed upon by Richards, Layton &
Finger, Wilmington, Delaware, special Delaware counsel to the Corporation and
the Series Issuer. The validity of the Series Guarantee and the
Series Subordinated Debentures will be passed upon for the Corporation by
Baker & Botts, L.L.P., Houston, Texas. Certain legal matters will be passed
upon for the Corporation by Hugh Rice Kelly, Esq., Executive Vice President,
General Counsel and Corporate Secretary of the Corporation, and for the
Underwriters by Dewey Ballantine, New York, New York. Certain matters relating
to United States federal income tax considerations described in this
Prospectus Supplement will be passed upon for the Corporation by Baker &
Botts, L.L.P.
S-31
<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 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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 21, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY , 1997
$ ,000,000
HL&P CAPITAL TRUST [ ]
% TRUST PREFERRED SECURITIES, SERIES
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
HOUSTON LIGHTING & POWER COMPANY
-----------
The % Trust Preferred Securities, Series (the "Series Preferred
Securities"), offered hereby represent undivided beneficial interests in the
assets of HL&P Capital Trust , a statutory business trust created under the
laws of the State of Delaware (the "Series Issuer"). Houston Lighting &
Power Company, a Texas corporation ("HL&P" or the "Corporation"), will be the
owner of all the undivided beneficial interests in the assets of the Series
Issuer represented by common securities of the Series Issuer ("Series
Common Securities" and, collectively with the Series Preferred
Securities, the "Series Securities"). The Bank of New York is the Property
Trustee of the Series Issuer. The Series Issuer exists for the sole
purpose of issuing the Series Securities and investing the proceeds thereof
in % Junior Subordinated Deferrable Interest Debentures, Series (the
"Series Subordinated Debentures"), to be issued by the Corporation. The
Series Subordinated Debentures will mature on (the "Stated Maturity").
Under certain conditions, the Company has the right to advance the Stated
Maturity. See "Certain Terms of the Series Subordinated Debentures--
Conditional Right to Advance Maturity". The Series Preferred Securities
will have a preference under certain circumstances with respect to cash
distributions and amounts payable on liquidation or redemption over the Series
Common Securities. See "Description of Securities--Subordination of Common
Securities" in the accompanying Prospectus.
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES 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 SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING THE SERIES
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
-------------- ------------- -------------
<S> <C> <C> <C>
Per Series Preferred Security..... $ (2) $
Total............................... $ (2) $
</TABLE>
- -----
(1) The Series Issuer and the Corporation have each 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 Series
Preferred Securities will be invested in the Series Subordinated
Debentures, the Corporation has agreed to pay to the Underwriters as
compensation for their arranging the investment therein of such proceeds
$ per Series Preferred Security (or $ in the aggregate). See
"Underwriting".
(3) Expenses of the offering, which are payable by the Corporation, are
estimated to be $ .
-----------
The Series 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 the Series Preferred Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company in
New York, New York, on or about , 1997, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
-----------
The date of this Prospectus Supplement 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 SERIES
PREFERRED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
----------------
(cover page continued)
Holders of the Series Preferred Securities will be entitled to receive
preferential cumulative cash distributions accruing from the date of original
issuance and payable quarterly in arrears on the day of , , and
of each year, commencing , at the annual rate of % of the Liquidation
Amount (as defined in the accompanying Prospectus) of $25 per Series
Preferred Security ("Distributions"). The ability of the Series Issuer to
make timely payments of Distributions on the Series Preferred Securities
is solely dependent upon the Corporation making interest payments on the
Series Subordinated Debentures as and when required. Subject to certain
exceptions, as described herein, the Corporation has the right to defer
payment of interest on the Series Subordinated Debentures at any time or
from time to time for a period not exceeding 20 consecutive quarters with
respect to each deferral period (each, an "Extension Period"); provided that
no Extension Period may extend beyond the Stated Maturity of the Series
Subordinated Debentures. If interest payments on the Series
Subordinated Debentures are so deferred, Distributions on the Series
Preferred Securities will also be deferred, and the Corporation will not be
permitted, subject to certain exceptions described herein, to declare or pay
any cash distributions with respect to the Corporation's capital stock or debt
securities that rank pari passu in all respects with or junior to the Series
Subordinated Debentures. During an Extension Period, interest on the Series
Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Series Preferred Securities are
entitled will accumulate) at the rate of % per annum, compounded quarterly
from the relevant payment date for such interest, and holders of Series
Preferred Securities will be required to accrue interest income for United
States federal income tax purposes. Upon the termination of any such Extension
Period and the payment of all interest then accrued and unpaid (together with
interest thereon at the annual rate of %, compounded quarterly, to the
extent permitted by applicable law), the Corporation may elect to begin a new
Extension Period subject to the requirements set forth herein. See "Certain
Terms of Series Subordinated Debentures--Option to Defer Interest
Payments" and "Certain Federal Income Tax Consequences--Interest Income and
Original Issue Discount".
The Series Subordinated Debentures (and therefore the Series
Preferred Securities) are unsecured and subordinated to all existing and
future Senior Debt (as defined in the accompanying Prospectus) of the
Corporation. Substantially all of the Corporation's existing indebtedness
constitutes Senior Debt. At September 30, 1996, the Senior Debt of the
Corporation aggregated approximately $3.0 billion. If the Transaction (as
defined in the accompanying Prospectus) is consummated using the Alternative
Merger (as defined in the accompanying Prospectus), Senior Debt of the
Corporation will be substantially increased. See "Recent Developments; NorAm
Merger" in the accompanying Prospectus. None of the Indenture, the related
Guarantee, the related Trust Agreement or the Expense Agreement places any
limitation on the amount of secured or unsecured debt, including Senior Debt,
that may be incurred by the Corporation. See "Description of Junior
Subordinated Debentures--Subordination" in the accompanying Prospectus.
The Corporation has, through the Series Guarantee, the Trust Agreement,
the Series Subordinated Debentures, the Indenture and the Expense
Agreement (each as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of the Series Issuer's
S-2
<PAGE>
obligations under the Series Preferred Securities. See "Relationship Among
the Securities, the Corresponding Junior Subordinated Debentures, the Expense
Agreement and the Guarantees--Full and Unconditional Guarantee" in the
accompanying Prospectus. The Series Guarantee of the Corporation (the
"Series Guarantee") guarantees the payment of Distributions and payments
on liquidation of the Series Issuer or redemption of the Series
Preferred Securities, but only in each case to the extent of funds held by
the Series Issuer, as described herein. See "Description of Guarantees" in
the accompanying Prospectus. If the Corporation does not make interest
payments on the Series Subordinated Debentures held by the Series
Issuer, the Series Issuer will have insufficient funds to pay
Distributions on the Series Preferred Securities. The Series Guarantee
does not cover payment of Distributions when the Series Issuer has
insufficient funds to pay such Distributions. In such event, a holder of
Series Preferred Securities may institute a legal proceeding directly
against the Corporation pursuant to the terms of the Indenture to enforce
payment of amounts equal to such Distributions to such holder. See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Securities" in the accompanying Prospectus.
The obligations of the Corporation under the Series Guarantee, the Series
Subordinated Debentures and with respect to the Series Preferred
Securities are subordinate and junior in right of payment to all Senior Debt
of the Corporation.
The Series Preferred Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series Subordinated Debentures at
their Stated Maturity or earlier redemption. The Series Subordinated
Debentures are redeemable prior to their Stated Maturity at the option of the
Corporation (i) on or after , , in whole at any time or in part from
time to time, or (ii) at any time, in whole (but not in part) within 90 days
following the occurrence of a Special Event (as defined herein). For a
description of redemption prices for the Series Preferred Securities
pursuant to clause (i) or (ii) above, see "Certain Terms of Series
Preferred Securities-- Redemption" and "Certain Terms of Series
Subordinated Debentures--Redemption".
The Corporation will have the right at any time to direct the Property
Trustee to dissolve the Series Issuer. See "Certain Terms of Series
Preferred Securities--Liquidation of Series Issuer and Distribution of
Series Subordinated Debentures to Holders". In the event of the dissolution
of the Series Issuer, after satisfaction of liabilities to creditors of
the Series Issuer as required by applicable law, the holders of the Series
Preferred Securities will be entitled to receive a Liquidation Amount of
$25 per Series Preferred Security plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such amount in Series Subordinated Debentures, subject to
certain exceptions. See "Description of Securities --Liquidation Distribution
Upon Termination" in the accompanying Prospectus.
The Corporation will have the right, subject to certain restrictions as
described herein, to advance the Stated Maturity of the Series
Subordinated Debentures upon the occurrence of a Tax Event (as defined
herein). See "Certain Terms of Series Subordinated Debentures--Conditional
Right to Advance Maturity".
The Corporation intends to make application to list the Preferred Securities
on the New York Stock Exchange, Inc. (the "NYSE"). If approved, trading of the
Preferred Securities on the NYSE is expected to commence within the 30-day
period after the initial delivery of the Preferred Securities. See
"Underwriting". If the Series Subordinated Debentures are distributed to
the holders of the Preferred Securities, the Corporation will use its best
efforts to have the Series Subordinated Debentures listed on the NYSE or
on such other exchange as the Preferred Securities are then listed.
S-3
<PAGE>
The Series Preferred Securities will be represented by global
certificates registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Series Preferred Securities will
be shown on, and transfers thereof will be effected only through, records
maintained by participants in DTC. Except as described in the accompanying
Prospectus, Series Preferred Securities in certificated form will not be
issued in exchange for the global certificates. See "Certain Terms of Series
Preferred Securities--Registration of Series Preferred Securities".
S-4
<PAGE>
The information in this Prospectus Supplement supplements and should be read
in conjunction with the information contained in the accompanying Prospectus.
As used herein, (i) the "Indenture" means the Junior Subordinated Indenture,
as amended and supplemented from time to time, between the Corporation and The
Bank of New York, as trustee (the "Debenture Trustee"), and (ii) the "Trust
Agreement" means the Amended and Restated Trust Agreement relating to the
Series Issuer among the Corporation, as Depositor, 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 Administrative Trustees
named therein (collectively with the Property Trustee and Delaware Trustee,
the "Issuer Trustees"). Each of the other capitalized terms used in this
Prospectus Supplement and not otherwise defined in this Prospectus Supplement
has the meaning set forth in the accompanying Prospectus.
RISK FACTORS
Prospective purchasers of the Series Preferred Securities should
carefully review the information contained elsewhere in this Prospectus
Supplement and in the accompanying Prospectus and should particularly consider
the following matters. In addition, because the Series Preferred
Securities will be paid with proceeds of the Series Subordinated
Debentures and because holders of Series Preferred Securities may receive
Series Subordinated Debentures upon liquidation of the Series Issuer,
prospective purchasers of Series Preferred Securities are also making an
investment decision with regard to the Series Subordinated Debentures and
should carefully review all the information regarding the Series
Subordinated Debentures contained herein.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES GUARANTEE AND THE
SERIES SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series Guarantee issued by
the Corporation for the benefit of the holders of Series Securities and
under the Series Subordinated Debentures are unsecured and rank
subordinate and junior in right of payment to all existing and future Senior
Debt of the Corporation. Substantially all of the Corporation's existing
indebtedness constitutes Senior Debt. At September 30, 1996, the Senior Debt
of the Corporation aggregated approximately $3.0 billion. If the Transaction
is consummated using the Alternative Merger, Senior Debt of the Corporation
will be substantially increased. See "Recent Developments; NorAm Merger" in
the accompanying Prospectus. None of the Indenture, the Series Guarantee,
the Trust Agreement or the Expense Agreement places any limitation on the
amount of secured or unsecured debt, including Senior Debt, that may be
incurred by the Corporation. See "Description of Guarantees--Status of the
Guarantees" and "Description of Junior Subordinated Debentures--Subordination"
in the accompanying Prospectus.
The ability of the Series Issuer to make timely payments of
Distributions on the Series Preferred Securities is solely dependent upon
the Corporation making interest payments on the Series Subordinated
Debentures as and when required.
OPTION TO DEFER INTEREST PAYMENT; TAX CONSEQUENCES; MARKET PRICE CONSEQUENCES
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series Subordinated Debentures at any time or from time
to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period; provided that no Extension Period may extend beyond the
Stated Maturity of the Series Subordinated Debentures. As a consequence of
any such deferral of
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<PAGE>
interest payments by the Corporation, quarterly Distributions on the Series
Preferred Securities by the Series Issuer will also be deferred during
any such Extension Period. Distributions to which holders of the Series
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate of % per annum, compounded quarterly from the relevant
payment date for such Distributions. During any such Extension Period, the
Corporation 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 Corporation's capital stock or (ii) make any payment of principal or of
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation (including other series of Junior Subordinated
Debentures) that, in either case, rank pari passu with or junior in interest
to the Series Subordinated Debentures or make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation if such guarantee ranks pari passu with or
junior in interest to the Series Securities (other than (a) dividends or
distributions in capital stock of the Corporation, (b) any declaration of a
dividend under a stockholders' rights plan or in connection with the
implementation of a stockholders' rights plan, the issuance of capital stock
of the Corporation under a stockholders' rights plan or the redemption or
repurchase of any such rights distributed pursuant to a stockholders' rights
plan, (c) payments under the Series Guarantee and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees, related
to the issuance of common stock or rights under a dividend reinvestment and
stock purchase plan or related to the issuance of common stock (or securities
convertible into or exchangeable for common stock) as consideration in an
acquisition transaction that was entered into prior to the commencement of
such Extension Period). Prior to the termination of any such Extension Period,
the Corporation may further defer the payment of interest on the Series
Subordinated Debentures; provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Series
Subordinated Debentures. During an Extension Period, the Corporation will have
the right to make partial payments of interest on any Interest Payment Date.
Upon the termination of any Extension Period and the payment of all interest
then accrued and unpaid (together with interest thereon at the annual rate of
%, compounded quarterly from the Interest Payment Date for such interest,
to the extent permitted by applicable law), the Corporation may elect to begin
a new Extension Period subject to the above requirements. There is no
limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "Certain Terms of Series Preferred Securities--
Distributions" and "Certain Terms of Series Subordinated Debentures--
Option to Defer Interest Payments".
Should an Extension Period occur, a holder of Series Preferred Securities
will be required to accrue income (in the form of original issue discount) in
respect of its pro rata share of the Series Subordinated Debentures held
by the Series Issuer for United States federal income tax purposes. As a
result, a holder of Series Preferred Securities will be required to
include such income in gross income for United States federal income tax
purposes in advance of the receipt of cash attributable to such income and
will not receive the cash related to such income from the Series Issuer if
the holder disposes of the Series Preferred Securities prior to the record
date for the payment of Distributions. See "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount" and "--Sale or
Redemption of Series Preferred Securities". PROSPECTIVE INVESTORS SHOULD
CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF AN
INVESTMENT IN THE SERIES PREFERRED SECURITIES.
The Corporation has no current intention of exercising its right to defer
payments of interest on the Series Subordinated Debentures. However,
should the Corporation elect to exercise such right in the future, the market
price of the Series Preferred Securities is likely to be affected. A
holder that disposes of its Series Preferred Securities during an
Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Series Preferred
Securities.
S-6
<PAGE>
SPECIAL EVENT REDEMPTION; PAYMENT OF ADDITIONAL SUMS; CONDITIONAL RIGHT TO
ADVANCE MATURITY
Upon the occurrence and continuation of a Special Event (as defined below),
the Corporation has the right to redeem the Series Subordinated Debentures
in whole (but not in part) within 90 days following the occurrence of such
Special Event and thereby cause a mandatory redemption of the Series
Securities in whole (but not in part) at the Redemption Price. See "Certain
Terms of Series Preferred Securities--Redemption". In addition to the
foregoing redemption right, upon the occurrence of a Tax Event (as defined
below), the Corporation will have the right, subject to certain conditions, to
advance the Stated Maturity of the Series Subordinated Debentures. See
"Certain Terms of Series Subordinated Debentures--Conditional Right to
Advance Maturity". If a Special Event has occurred and is continuing and the
Corporation does not elect either option discussed above, the Series
Securities will remain outstanding and Additional Sums (as defined below) may
be payable on the Series Subordinated Debentures. See "Certain Terms of
Series Subordinated Debentures--Additional Sums". At any time, the
Corporation has the right to direct the Property Trustee to dissolve the
Series Issuer and, after satisfaction of the liabilities of creditors of
the Series Issuer as provided by applicable law, cause the Series
Subordinated Debentures to be distributed to the holders of the Series
Securities.
A "Special Event" means a Tax Event or an Investment Company Act Event.
A "Tax Event" means the receipt by the Series Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change, pronouncement or decision is announced on or after the
date of issuance of the Series Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk that (i) the Series
Issuer is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued on
the Series Subordinated Debentures, (ii) interest payable by the
Corporation on the Series Subordinated Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by the Corporation,
in whole or in part, for United States federal income tax purposes or (iii)
the Series Issuer is, or will be within 90 days of the date of the
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
An "Investment Company Act Event" means the receipt by the Series Issuer
of an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a 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"), there is more than an insubstantial risk that the Series Issuer 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 1940 Act Law becomes effective on or after the date of original issuance of
the Series Preferred Securities.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Series Issuer
on the outstanding Series Securities shall not be reduced as a result of
any additional taxes, duties and other governmental charges to which the
Series Issuer has become subject as a result of a Special Event.
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's 1996 budget proposal, was introduced to
the 104th Congress. The Bill would have,
S-7
<PAGE>
among other things, generally denied interest deductions for interest accrued
on an instrument issued by a corporation that had a maximum term of more than
20 years and that was not shown as indebtedness on the separate balance sheet
of the issuer or, where the instrument was issued to a related party (other
than a corporation), where the holder or some other related party issued a
related instrument that was not shown as indebtedness on the issuer's
consolidated balance sheet. The Bill would have also generally denied interest
deductions for interest on an instrument issued by a corporation that had a
maximum weighted-average maturity of more than 40 years. The above-described
provisions of the Bill were proposed to be effective generally for instruments
issued on or after December 7, 1995. If this provision were to apply to the
Series Subordinated Debentures, the Corporation would not be able to deduct
interest on the Series 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. Under current law, the
Corporation will be able to deduct interest on the Series Subordinated
Debentures. Although the 104th Congress adjourned without enacting the above-
described provisions of the Bill, there can be no assurance that current or
future legislative proposals or final legislation will not adversely affect the
ability of the Corporation to deduct interest on the Series Subordinated
Debentures. Such a change could give rise to a Tax Event, which would permit
the Corporation to cause a redemption of the Series Preferred Securities.
See "Certain Terms of Series Subordinated Debentures--Redemption" and
"Certain Terms of the Series Subordinated Debentures--Conditional Right to
Advance Maturity" in this Prospectus Supplement and "Description of
Securities--Redemption or Distribution--Distribution of Corresponding Junior
Subordinated Debentures" in the accompanying Prospectus. See also "Certain
Federal Income Tax Consequences--Possible Tax Law Changes".
DISTRIBUTION OF SERIES PREFERRED SECURITIES FOR SERIES SUBORDINATED
DEBENTURES
The Corporation will have the right at any time to direct the Property
Trustee to dissolve the Series Issuer and, after satisfaction of liabilities
to creditors of the Series Issuer as required by applicable law, cause the
Series Subordinated Debentures to be distributed to the holders of the
Series Securities. See "Certain Terms of Series Preferred Securities--
Liquidation of Series Issuer and Distribution of Series Subordinated
Debentures to Holders". If the Series Subordinated Debentures are
distributed to the holders of the Series Securities, the Corporation will
use its best efforts to have the Series Subordinated Debentures listed on
the NYSE or on such other exchange as the Preferred Securities are then listed
or traded.
Under current United States federal income tax law and interpretations, a
distribution of the Series Subordinated Debentures upon dissolution and
winding up of the Series Issuer should not be a taxable event to holders of
the Series Preferred Securities. Should there be a change in law, a change
in legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to the holders of the Series
Preferred Securities. See "Certain Federal Income Tax Consequences--
Distribution of Series Subordinated Debentures to Holders of Series
Preferred Securities".
RIGHTS UNDER THE SERIES GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO THE
SERIES ISSUER
The Series Guarantee guarantees to the holders of the Series
Securities the following payments, to the extent not paid by the Series
Issuer: (i) any accumulated and unpaid Distributions required to be paid on the
Series Securities, to the extent that the Series Issuer has funds on
hand available therefor at such time; (ii) the redemption price with respect to
any
S-8
<PAGE>
Series Securities called for redemption, to the extent that the Series
Issuer has funds on hand available therefor at such time; and (iii) upon a
voluntary or involuntary dissolution and winding up of the Series Issuer
(unless the Series Subordinated Debentures are distributed to holders of
the Series Securities), the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions to the date of payment and
(b) the amount of assets of the Series Issuer remaining available for
distribution to holders of the Series Securities in liquidation of the
Series Issuer after payment of creditors of the Series Issuer as
required by applicable law. The Series Guarantee will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). The Bank of New York will act as the indenture trustee under
the Series Guarantee (the "Guarantee Trustee") for the purpose of
compliance with the Trust Indenture Act and will hold the Series Guarantee
for the benefit of the holders of the Series Securities. The Bank of New
York will also act as Debenture Trustee for the Series Subordinated
Debentures and as Property Trustee and The Bank of New York (Delaware) will
act as Delaware Trustee under the Trust Agreement.
The Series Guarantee is subordinate as described under "--Ranking of
Subordinated Obligations Under the Series Guarantee and the Series
Subordinated Debentures".
The holders of not less than a majority in aggregate Liquidation Amount of
the Series 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 Series Guarantee or to direct the exercise of any trust
power conferred upon the Guarantee Trustee under the Series Guarantee. Any
holder of the Series Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Series Guarantee
without first instituting a legal proceeding against the Series Issuer,
the Guarantee Trustee or any other person or entity. If the Corporation were
to default on its obligation to pay amounts payable under the Series
Subordinated Debentures, the Series Issuer would lack funds for the
payment of Distributions or amounts payable on redemption of the Series
Securities or otherwise, and, in such event, holders of the Series
Securities would not be able to rely upon the Series Guarantee for payment
of such amounts. Instead, if a Debenture Event of Default shall have occurred
and be continuing and such event is attributable to the failure of the
Corporation to pay interest or premium, if any, on or principal of the Series
Subordinated Debentures on the applicable payment date, then a holder of
Series Preferred Securities may institute a legal proceeding directly
against the Corporation pursuant to the terms of the Indenture for enforcement
of payment to such holder of the principal of or interest or premium, if any,
on such Series Subordinated Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Series Preferred Securities held
by such holder (a "Direct Action"). In connection with such Direct Action, the
Corporation will have a right of set-off under the Indenture to the extent of
any payment made by the Corporation to such holder of Series Preferred
Securities in the Direct Action. Except as described herein, holders of Series
Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Series Subordinated Debentures or
assert directly any other rights in respect of the Series Subordinated
Debentures. See "Description of Junior Subordinated Debentures--Enforcement of
Certain Rights by Holders of Securities", "--Debenture Events of Default" and
"Description of Guarantees" in the accompanying Prospectus. The Trust
Agreement provides that each holder of Series Securities by acceptance
thereof agrees to the provisions of the Series Guarantee and the
Indenture.
LIMITED VOTING RIGHTS
Holders of Series Preferred Securities generally will have limited
voting rights relating only to the modification of the Series Preferred
Securities, the exercise of the Series Issuer's rights as holder of Series
Subordinated Debentures and the Series Guarantee. Holders
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<PAGE>
of Series Preferred Securities will not be entitled to vote to appoint,
remove or replace the Property Trustee, the Delaware Trustee or any
Administrative Trustee, and such voting rights are vested exclusively in the
holder of the Series Common Securities except, with respect to the Property
Trustee and the Delaware Trustee, upon the occurrence of certain events
described in the accompanying Prospectus. The Property Trustee, the
Administrative Trustees and the Corporation may amend the Trust Agreement
without the consent of holders of Series Preferred Securities to ensure
that the Series Issuer will be classified for United States federal income
tax purposes as a grantor trust unless such action materially and adversely
affects the interests of such holders. See "Description of Securities--Voting
Rights; Amendment of Each Trust Agreement" and "--Removal of Issuer Trustees"
in the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES PREFERRED SECURITIES
The Series Preferred Securities are expected to be listed on the NYSE,
subject to official notice of issuance. The Series Preferred Securities may
trade at prices that do not fully reflect the value of accrued and unpaid
interest with respect to the underlying Series Subordinated Debentures. See
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount" and "--Sale or Redemption of Series Preferred Securities" for a
discussion of the United States federal income tax consequences that may result
from a taxable disposition of the Series Securities.
MARKET PRICES
There can be no assurance as to the market prices for Series Preferred
Securities or Series Subordinated Debentures that may be distributed upon
dissolution and winding up of the Series Issuer. Accordingly, the Series
Preferred Securities that an investor may purchase, whether pursuant to the
offer made hereby or in the secondary market, or the Series Subordinated
Debentures that a holder of Series Preferred Securities may receive upon
dissolution and winding up of the Series Issuer, may trade at a discount to
the price that the investor paid to purchase the Series Preferred
Securities offered hereby. As a result of the existence of the Corporation's
right to defer interest payments, the market price of the Series Preferred
Securities (which represent undivided beneficial interests in the assets of the
Series Issuer) may be more volatile than the market prices of other
securities that are not subject to such optional deferrals. See "Certain Terms
of the Series Subordinated Debentures" herein and "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
HL&P CAPITAL TRUST [ ]
HL&P Capital Trust (the "Series Issuer") is a statutory business trust
created under Delaware law pursuant to (i) the Trust Agreement executed by the
Corporation, as Depositor, and The Bank of New York (Delaware), as Delaware
Trustee, and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on January 10, 1997. The Series Issuer's business and
affairs are conducted by the Issuer Trustees: The Bank of New York, as Property
Trustee, and The Bank of New York (Delaware), as Delaware Trustee, and two
individual Administrative Trustees who will be selected by the Corporation. The
Series Issuer exists for the exclusive purposes of (i) issuing and selling
the Series Preferred Securities and Series Common Securities, (ii) using
the proceeds from the sale of such Series Securities to acquire Series
Subordinated Debentures issued by the Corporation and (iii) engaging in only
those other activities necessary, convenient or
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<PAGE>
incidental thereto (such as registering the transfer of the Series
Preferred Securities). Accordingly, the Series Subordinated Debentures and
the right to reimbursement under the Expense Agreement will be substantially
all the assets of the Series Issuer, and payments under the Series
Subordinated Debentures and the Expense Agreement will be the only revenues of
the Series Issuer. All of the Series Common Securities will be owned
by the Corporation. The Series Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Series Preferred
Securities, except that upon the occurrence and continuance of an event of
default under the Trust Agreement resulting from an event of default under the
Indenture, the rights of the Corporation as holder of the Series 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 Series Preferred Securities. See "Description of
Securities--Subordination of Common Securities" in the accompanying
Prospectus. The Corporation will acquire Series Common Securities in an
aggregate Liquidation Amount equal to 3% of the total capital of the Series
Issuer. The Series Issuer has a term of approximately 55 years, but
may be dissolved earlier as provided in the Trust Agreement. The principal
executive office of the Series Issuer is 200 West 9th Street Plaza, Box
2105, Wilmington, Delaware 19899, and its telephone number is (302) 655-8894.
See "The Issuers" in the accompanying Prospectus.
It is anticipated that the Series Issuer will not be subject to the
reporting requirements under the Exchange Act.
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<PAGE>
HOUSTON LIGHTING & POWER COMPANY
SELECTED FINANCIAL INFORMATION OF THE CORPORATION
The following table presents summary financial data derived from the
financial statements of the Corporation. This summary is qualified in its
entirety by the detailed information and financial statements included in the
documents incorporated herein by reference. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus. The Corporation is a
party to an Agreement and Plan of Merger, dated as of August 11, 1996, as
amended, among the Corporation, Houston Industries Incorporated ("Houston
Industries"), HI Merger, Inc. and NorAm Energy Corp. ("NorAm"). For more
information regarding the Corporation and the proposed merger, see "Houston
Lighting & Power Company" and "Recent Developments; NorAm Merger" in the
accompanying Prospectus. No adjustment has been made to reflect the potential
impact of the Transaction.
<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS ENDED AS OF OR FOR THE
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- ------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ 3,142,234 $ 2,896,180 $ 3,680,297 $ 3,746,085 $ 4,079,863 $ 3,826,841 $ 3,674,543
Income after preferred
dividends but before
cumulative effect of
change in
accounting(1).......... $ 374,129 $ 416,941 $ 450,977 $ 461,381 $ 449,750 $ 375,955 $ 472,712
Cumulative effect of
change in accounting
(2).................... (8,200) 94,180
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income after preferred
dividends.............. $ 374,129 $ 416,941 $ 450,977 $ 453,181 $ 449,750 $ 470,135 $ 472,712
=========== =========== =========== =========== =========== =========== ===========
Return on average common
equity................. 9.6% 10.7% 11.8% 12.0% 12.3% 13.3% 13.8%
Total assets............ $10,486,947 $10,928,449 $10,665,259 $10,850,981 $10,753,616 $10,790,052 $10,620,642
Long-term obligations
including current
maturities(3).......... $ 2,932,064 $ 3,239,499 $ 3,220,015 $ 3,356,789 $ 3,402,032 $ 3,796,719 $ 4,150,454
Capitalization:
Common stock equity.... 55% 53% 52% 51% 50% 47% 44%
Cumulative preferred
stock (including
current maturities)... 5% 5% 6% 7% 7% 7% 6%
Long-term debt
(including current
maturities)........... 40% 42% 42% 42% 43% 46% 50%
Capital and nuclear fuel
expenditures (excluding
AFUDC)................. $ 224,844 $ 287,593 $ 391,550 $ 412,899 $ 329,016 $ 337,082 $ 365,486
Percent of capital
expenditures financed
internally from
operations............. 183% 148% 110% 216% 158% 137% 126%
</TABLE>
- -------
(1) A one-time after-tax charge of $62 million was recorded in the first
quarter of 1996 in connection with the settlement of litigation relating
to the South Texas Project Electric Generating Station.
(2) The 1994 cumulative effect relates to the change in accounting for
postemployment benefits. The 1992 cumulative effect relates to the change
in accounting for revenues from a cycle billing to a full accrual method
effective January 1, 1992.
(3) Includes Cumulative Preferred Stock subject to mandatory redemption.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Corporation's ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividend
requirements for each of the periods indicated:
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED FOR THE
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ------------------------
1996 1995 1995 1994 1993 1992 1991
---- ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
before cumulative effect of change in
accounting(1)......................... 4.27 4.30 3.75 3.80 3.40 2.73 2.97
Ratio of earnings to fixed charges and
preferred dividend requirements before
cumulative effect of change in
accounting(1)......................... 3.73 3.66 3.20 3.20 2.90 2.34 2.53
</TABLE>
- --------
(1) The Corporation believes that the ratios for the nine-month periods are not
necessarily indicative of the ratios for twelve-month periods due to the
seasonal nature of the Corporation's business and, with regard to the ratio
for the nine months ended September 30, 1996, the recording of a $62
million after-tax charge to earnings for the first quarter of 1996.
USE OF PROCEEDS
All of the proceeds from the sale of the Series Preferred Securities will
be invested by the Series Issuer in Series Subordinated Debentures. The
Corporation intends that the proceeds from the sale of the Series
Subordinated Debentures will be added to its general corporate funds and will
be used for general corporate purposes, including funding the redemption or
repurchase of shares of its outstanding preferred stock.
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<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Corporation as of
September 30, 1996 and as adjusted to give effect to the consummation of the
offering of an aggregate of $350 million of the Series Preferred
Securities, other Preferred Securities or Capital Securities and the redemption
of preferred stock having an aggregate fixed liquidation value of $220 million
in the fourth quarter of 1996. No adjustment has been made to reflect (i) the
potential impact of the Transaction or (ii) the issuance of $118 million
aggregate principal amount of revenue refunding bonds by the Corporation in the
first quarter of 1997, which issuance had no effect on the total long-term debt
of the Corporation. The following data should be read in conjunction with the
financial statements and notes thereto of the Corporation incorporated herein
by reference.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------
ACTUAL AS ADJUSTED
---------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Common Stock Equity:
Common stock, class A; no par value.................. $1,524,949 $1,524,949
Common stock, class B; no par value.................. 150,978 150,978
Retained earnings.................................... 2,277,465 2,277,465
---------- ----------
Total common stock equity.......................... 3,953,392 3,953,392
---------- ----------
Cumulative Preferred Stock (excluding current portion):
Not subject to mandatory redemption (1).............. 351,345 135,178
Subject to mandatory redemption...................... 0 0
---------- ----------
Total cumulative preferred stock................... 351,345 135,178
---------- ----------
Company Obligated Mandatorily Redeemable Trust
Securities(2)......................................... 0 350,000
---------- ----------
Long-Term Debt (excluding current maturities):
First mortgage bonds................................. 2,704,848 2,704,848
Pollution control revenue bonds...................... 5,000 5,000
Other................................................ 2,756 2,756
---------- ----------
Total long-term debt............................... 2,712,604 2,712,604
---------- ----------
Total capitalization............................... $7,017,341 $7,151,174
========== ==========
</TABLE>
- --------
(1) The adjusted amount reflects the redemption in the fourth quarter of 1996
of the Corporation's Variable Term Cumulative Preferred Stock, Series A, B,
C and D having an aggregate fixed liquidation value of $220 million. Such
preferred stock was reflected on the Corporation's financial statements at
$216 million as a result of expenses of the original issuance.
(2) As described herein and in the accompanying Prospectus, substantially all
of the assets of the respective Issuers will be Junior Subordinated
Debentures of the Corporation with an aggregate principal amount not
exceeding $360,825,000, and upon redemption of such debt, the related
Securities will be mandatorily redeemable.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series Issuer will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Series
Issuer will be included in the financial statements of the Corporation. The
Series Preferred Securities will be reflected in the consolidated balance
sheets of the Corporation as "Company Obligated Mandatorily Redeemable Trust
Preferred Securities", and appropriate disclosures about the Series
Preferred Securities, the Series Guarantee and the Series Subordinated
Debentures and the Expense Agreement will be included in the notes to the
consolidated financial statements. For financial reporting purposes, the
Corporation will record Distributions payable on the Series Preferred
Securities as an expense.
S-14
<PAGE>
CERTAIN TERMS OF SERIES PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series
Preferred Securities supplements the description of the terms and provisions
of the Securities set forth in the accompanying Prospectus under the heading
"Description of Securities", to which description reference is hereby made.
The Trust Agreement will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee will act as the indenture trustee with
respect to the Series Issuer for purposes of compliance with the Trust
Indenture Act. This summary of certain terms and provisions of the Series
Preferred Securities, which describes the material provisions thereof, does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, the Trust Agreement to which description reference is hereby
made. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and accompanying
Prospectus form a part.
DISTRIBUTIONS
The Series Preferred Securities represent undivided beneficial interests
in the assets of the Series Issuer. The ability of the Series Issuer to
make timely payments of Distributions on the Series Preferred Securities
is solely dependent upon the Corporation making interest payments on the
Series Subordinated Debentures as and when required. Distributions on
Series Preferred Securities will be payable at the annual rate of % of
the stated Liquidation Amount of $25, payable quarterly in arrears on , ,
and of each year, to the holders of the Series Preferred Securities
on the relevant record dates. The record dates for the Series Preferred
Securities will be, for so long as the Series Preferred Securities remain
in book-entry form, one Business Day (as defined in the accompanying
Prospectus) prior to the relevant Distribution payment date and, in the event
the Series Preferred Securities are not in book-entry form, the 15th day
of the month immediately preceding the relevant Distribution payment date.
Distributions will accumulate from the date of original issuance. The first
Distribution payment date for the Series Preferred Securities will be .
The amount of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. The amount of Distributions
for any partial period will be computed on the basis of a 360-day year of
twelve 30-day months and the number of days elapsed in a partial month. In the
event that any date on which Distributions are payable on the Series
Preferred Securities is not a Business Day, then payment of the Distributions
payable on such date will be made on the next succeeding day that is a
Business Day (and without any additional Distributions 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. See "Description of
Securities--Distributions" in the accompanying Prospectus.
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series Subordinated Debentures at any time or from time
to time for a period not exceeding 20 consecutive quarters with respect to
each Extension Period; provided that no Extension Period may extend beyond the
Stated Maturity of the Series Subordinated Debentures. As a consequence of
any such deferral of interest payments by the Corporation, quarterly
Distributions on the Series Preferred Securities by the Series Issuer
will also be deferred during any such Extension Period. Distributions to which
holders of the Series Preferred Securities are entitled will accumulate
additional Distributions thereon at the rate of % per annum, compounded
quarterly from the relevant payment date for such Distributions. The term
"Distributions" as used herein shall include any such additional
Distributions. During any such Extension Period, the Corporation 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 Corporation's
capital stock or (ii) make any payment of principal or of interest or
S-15
<PAGE>
premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation (including other series of Junior Subordinated Debentures) that,
in either case, rank pari passu with or junior in interest to the Series
Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in interest to
the Series Securities (other than (a) dividends or distributions in
capital stock of the Corporation, (b) any declaration of a dividend under a
stockholders' rights plan or in connection with the implementation of a
stockholders' rights plan, the issuance of capital stock of the Corporation
under a stockholders' rights plan or the redemption or repurchase of any such
rights distributed pursuant to a stockholders' rights plan, (c) payments under
the Series Guarantee and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit
plans for its directors, officers or employees, related to the issuance of
common stock or rights under a dividend reinvestment and stock purchase plan
or related to the issuance of common stock (or securities convertible into or
exchangeable for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period).
Prior to the termination of any such Extension Period, the Corporation may
further defer the payment of interest on the Series Subordinated
Debentures; provided that no Extension Period may exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Series Subordinated
Debentures. During an Extension Period, the Corporation will have the right to
make partial payments of interest on any Interest Payment Date. Upon the
termination of any such Extension Period and the payment of all interest then
accrued and unpaid (together with interest thereon at the annual rate of %,
compounded quarterly from the Interest Payment Date for such interest, to the
extent permitted by applicable law), the Corporation may elect to begin a new
Extension Period. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Certain Terms of
Series Subordinated Debentures--Option to Defer Interest Payments" and
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount".
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series
Subordinated Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series
Subordinated Debentures, whether at Stated 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 (as defined
in the accompanying Prospectus) of the Series Securities. See "Description
of Securities--Redemption or Distribution--Mandatory Redemption" in the
accompanying Prospectus. The Corporation has the right to redeem the Series
Subordinated Debentures (i) on or after , in whole at any time or in
part from time to time, or (ii) at any time, in whole (but not in part) within
90 days following the occurrence of a Special Event. A redemption of the
Series Subordinated Debentures would cause a mandatory redemption of the
Series Securities. If a partial redemption of the Series Subordinated
Debentures would result in the delisting of the Series Preferred
Securities, the Corporation may only redeem the Series Subordinated
Debentures in whole. At any time, the Corporation has the right to direct the
Property Trustee to dissolve the Series Issuer and, after satisfaction of
the liabilities of creditors of the Series Issuer as provided by
applicable law, cause the Series Subordinated Debentures to be distributed
to the holders of the Series Securities. If a Special Event has occurred
and is continuing and the Corporation does not elect either option discussed
above, the Series Securities will remain outstanding and Additional Sums
may be payable on the Series Subordinated Debentures.
The Redemption Price for each Series Preferred Security will be equal to
the Liquidation Amount of $25 plus accrued and unpaid Distributions thereon to
the date fixed for redemption.
S-16
<PAGE>
LIQUIDATION OF SERIES ISSUER AND DISTRIBUTION OF SERIES SUBORDINATED
DEBENTURES TO HOLDERS
The Corporation will have the right at any time to direct the Property
Trustee to dissolve the Series Issuer and, after satisfaction of
liabilities to creditors of the Series Issuer as required by applicable
law, cause the Series Subordinated Debentures to be distributed to the
holders of the Series Securities. See "Description of Securities--
Liquidation Distribution Upon Termination" in the accompanying Prospectus.
Under current United States federal income tax law and interpretations, a
distribution of the Series Subordinated Debentures upon dissolution and
winding up of the Series Issuer should not be a taxable event to holders
of the Series Preferred Securities. Should there be a change in law, a
change in legal interpretation, a Tax Event or other circumstances, however,
the distribution could be a taxable event to holders of the Series
Preferred Securities. See "Certain Federal Income Tax Consequences--
Distribution of Series Subordinated Debentures to Holders of Series
Preferred Securities". If the Corporation elects neither to redeem the Series
Subordinated Debentures prior to maturity nor to liquidate the Series
Issuer and distribute the Series Subordinated Debentures to holders of the
Series Preferred Securities, the Series Preferred Securities will
remain outstanding until the Stated Maturity of the Series Subordinated
Debentures.
LIQUIDATION VALUE
The amount payable on each of the Series Preferred Securities in the
event of any liquidation of the Series Issuer is $25 plus accumulated and
unpaid Distributions, which amount may be paid in the form of a distribution
of a Like Amount in Series Subordinated Debentures, subject to certain
exceptions. See "Description of Securities--Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
EVENTS OF DEFAULT; NOTICE; REMOVAL OF TRUSTEES
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement with respect to the Series Preferred Securities issued
thereunder (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 Junior Subordinated Debentures--Debenture Events of
Default" in the accompanying Prospectus);
(ii) default by the Series Issuer in the payment of any Distribution
when it becomes due and payable, and continuation of such default for
a period of 30 days;
(iii) default by the Series Issuer in the payment of any Redemption
Price of any Series Security when it becomes due and payable;
(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 90
days after there has been given, by registered or certified mail, to
the defaulting Issuer Trustee or Trustees and the Corporation by the
holders of at least 25% in aggregate Liquidation Amount of the
outstanding Series 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 or insolvency with
respect to the Series Issuer.
S-17
<PAGE>
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee (as defined in
the Trust Agreement), the Property Trustee shall transmit notice of such Event
of Default to the holders of the Series Securities, the Administrative
Trustees and the Corporation, as Depositor, unless such Event of Default shall
have been cured or waived. If an Event of Default shall have occurred and is
continuing, the Property Trustee shall enforce the Trust Agreement for the
benefit of the holders of the Series Securities. The Corporation, 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 an Event of Default resulting from any Debenture Event of Default occurs
and is continuing, then, pursuant to the Trust Agreement, holders of a
majority in aggregate Liquidation Amount of Series Preferred Securities
will have the right to direct the exercise of any trust or power conferred
upon the Property Trustee under the Trust Agreement. Upon a Debenture Event of
Default specified in clause (i) or clause (ii) in the list of Debenture Events
of Default, a holder of Series Preferred Securities may institute a legal
proceeding directly against the Corporation, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on the
Series Subordinated Debentures having a principal amount equal to the
aggregate stated Liquidation Amount of the Series Preferred Securities of
such holder. See "Relationship Among the Securities, the Corresponding Junior
Subordinated Debentures, the Expense Agreement and the Guarantees" in the
accompanying Prospectus.
If a Debenture Event of Default has occurred and is continuing, the Series
Preferred Securities shall have a preference over the Series Common
Securities. See "Description of Securities--Subordination of Common
Securities" and "--Liquidation Distribution Upon Termination" in the
accompanying Prospectus. The existence of an Event of Default, other than an
Event of Default described in clause (i) above, does not entitle the holders
of Series Preferred Securities to accelerate the maturity thereof.
Following an Event of Default as described in clause (i) above, the holders of
at least 25% in aggregate Liquidation Amount of the outstanding Series
Preferred Securities will have the right to declare the principal of all of
the Series Subordinated Debentures to be immediately due and payable as
set forth in the Indenture.
Unless a Debenture Event of Default shall have occurred and be continuing,
each of the Property Trustee, the Delaware Trustee and the Administrative
Trustees of the Series Issuer may be removed at any time by act of the
Corporation as the holder of the Series Common Securities. If a Debenture
Event of Default has occurred and is continuing with regard to the Series
Issuer, the Property Trustee and the Delaware Trustee may be removed at such
time by act of the holders of a majority in Liquidation Amount of the Series
Preferred Securities, delivered to such Trustee (in its individual
capacity and, in the case of the Property Trustee, on behalf of the Series
Issuer). No resignation or removal of any Trustee and no appointment of a
successor Trustee will be effective until the acceptance of appointment by the
successor Trustee in accordance with the requirements of the Trust Agreement.
REGISTRATION OF SERIES PREFERRED SECURITIES
The Series Preferred Securities will be represented by global
certificates registered in the name of DTC or its nominee. Beneficial
interests in the Series Preferred Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described below and in the accompanying
Prospectus, Series Preferred Securities in certificated form will not be
issued in exchange for the global certificates. See "Book-Entry Issuance" in
the accompanying Prospectus.
S-18
<PAGE>
A global security shall be exchangeable for Series Preferred Securities
registered in the names of persons other than DTC or its nominee only if (i)
DTC notifies the Series Issuer that it is unwilling or unable to continue
as a depositary for such global security and no successor depositary shall
have been appointed, or if at any time DTC ceases to be a clearing agency
registered under the Exchange Act at a time when DTC is required to be so
registered to act as such depositary, (ii) the Series Issuer in its sole
discretion determines that such global security shall be so exchangeable or
(iii) there shall have occurred and be continuing an event of default under
the Indenture with respect to the Series Subordinated Debentures. Any
global security that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as DTC
shall direct. It is expected that such instructions will be based upon
directions received by DTC from its Participants (as defined in the
accompanying Prospectus) with respect to ownership of beneficial interests in
such global security. In the event that Series Preferred Securities are
issued in definitive form, such Series Preferred Securities will be in
denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below.
Payments on Series Preferred Securities represented by a global security
will be made to DTC, as the depositary for the Series Preferred
Securities. In the event Series Preferred Securities are issued in
certificated form, the Liquidation Amount and Distributions will be payable,
the transfer of the Series Preferred Securities will be registrable, and
Series Preferred Securities will be exchangeable for Series Preferred
Securities of other denominations of a like aggregate Liquidation Amount, at
the corporate office of the Property Trustee in New York, New York, or at the
offices of any paying agent or transfer agent appointed by the Administrative
Trustees; provided that payment of any Distribution may be made at the option
of the Administrative Trustees by check mailed to the address of the persons
entitled thereto or by wire transfer. In addition, if the Series Preferred
Securities are issued in certificated form, the record dates for payment of
Distributions will be the 15th day of the month immediately preceding the
relevant Distribution payment date. For a description of DTC and the terms of
the depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance" in
the accompanying Prospectus.
CERTAIN TERMS OF SERIES SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series
Subordinated Debentures supplements the description of the terms and
provisions of the Corresponding Junior Subordinated Debentures (as defined in
the accompanying Prospectus) set forth in the accompanying Prospectus under
the heading "Description of Junior Subordinated Debentures", to which
description reference is hereby made. The summary of certain terms and
provisions of the Series Subordinated Debentures set forth below, which
describes the material provisions thereof, does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the Indenture to
which description reference is hereby made. The form of Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and accompanying Prospectus form a part.
Concurrently with the issuance of the Series Preferred Securities, the
Series Issuer will invest the proceeds thereof, together with the
consideration paid by the Corporation for the Series Common Securities, in
the Series Subordinated Debentures issued by the Corporation. The Series
Subordinated Debentures will bear interest at the annual rate of % of
the
S-19
<PAGE>
principal amount thereof, payable quarterly in arrears on ,
, and of each year (each, an
"Interest Payment Date"), commencing , to the person in whose
name each Series Subordinated Debenture is registered at the close of
business on the Business Day next preceding such Interest Payment Date. It is
anticipated that, until the liquidation, if any, of the Series Issuer, each
of the Series Subordinated Debentures will be held by the Property Trustee
in trust for the benefit of the holders of the Series 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. The amount of interest payable for any
partial period will be computed on the basis of a 360-day year of twelve 30-day
months and the number of days elapsed in a partial month. In the event that any
date on which interest is payable on the Series Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
Accrued interest that is not paid on the applicable Interest Payment Date will
bear additional interest on the amount thereof (to the extent permitted by law)
at the rate of % per annum, compounded quarterly from the relevant Interest
Payment Date. The term "interest" as used herein shall include quarterly
interest payments, interest on quarterly interest payments not paid on the
applicable Interest Payment Date and Additional Sums, as applicable.
The Series Subordinated Debentures will be issued as a series of junior
subordinated deferrable interest debentures under the Indenture. The Series
Subordinated Debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiples thereof.
The Series Subordinated Debentures will mature on , subject
to advancement as described under "--Conditional Right to Advance Maturity".
The Series Subordinated Debentures are not subject to any sinking fund
provisions.
The Series Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all existing and future Senior Debt
of the Corporation. Substantially all of the Corporation's existing
indebtedness constitutes Senior Debt. At September 30, 1996, the Senior Debt of
the Corporation aggregated approximately $3.0 billion. If the Transaction is
consummated using the Alternative Merger, Senior Debt of the Corporation will
be substantially increased. See "Recent Developments; NorAm Merger" in the
accompanying Prospectus. None of the Indenture, the related Guarantee, the
related Trust Agreement or the Expense Agreement places any limitation on the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Debt, whether under the Indenture, any existing indenture or
any other indenture that the Corporation may enter into in the future or
otherwise. See "Risk Factors--Ranking of Subordinated Obligations Under the
Series Guarantee and the Series Subordinated Debentures" herein and
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
OPTION TO DEFER INTEREST PAYMENTS
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture at any time or
from time to time during the term of the Series Subordinated Debentures to
defer payment of interest on the Series Subordinated Debentures for a
period not exceeding 20 consecutive quarters with respect to each Extension
Period; provided that no Extension Period may extend beyond the Stated Maturity
of the Series Subordinated Debentures. During an Extension Period, the
Corporation will have the right to make partial payments of interest on any
Interest Payment Date. At the end of such Extension Period, the Corporation
must pay all interest then accrued and unpaid on the Series Subordinated
Debentures (together with
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<PAGE>
interest on such unpaid interest, to the extent permitted by applicable law,
at the annual rate of %, compounded quarterly from the relevant Interest
Payment Date). During an Extension Period, a holder of Series Subordinated
Debentures (or a holder of Series Preferred Securities while such series
is outstanding) will be required to accrue income (in the form of original
issue discount) for United States federal income tax purposes. See "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount".
During any such Extension Period, the Corporation 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 Corporation's capital stock or
(ii) make any payment of principal or of interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation (including
other series of Junior Subordinated Debentures) that, in either case, rank
pari passu with or junior in interest to the Series Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation if
such guarantee ranks pari passu with or junior in interest to the Series
Securities (other than (a) dividends or distributions in capital stock of the
Corporation, (b) any declaration of a dividend under a stockholders' rights
plan or in connection with the implementation of a stockholders' rights plan,
the issuance of capital stock of the Corporation under a stockholders' rights
plan or the redemption or repurchase of any such rights distributed pursuant
to a stockholders' rights plan, (c) payments under the Series Guarantee
and (d) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors,
officers or employees, related to the issuance of common stock or rights under
a dividend reinvestment and stock purchase plan or related to the issuance of
common stock (or securities convertible into or exchangeable for common stock)
as consideration in an acquisition transaction that was entered into prior to
the commencement of such Extension Period). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest on the Series Subordinated Debentures; provided that no Extension
Period may exceed 20 consecutive quarters or extend beyond the Stated Maturity
of the Series Subordinated Debentures. Upon the termination of any such
Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the annual rate of %, compounded
quarterly from the relevant Interest Payment Date, to the extent permitted by
applicable law), the Corporation 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 Corporation must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election to begin such Extension Period at least one Business Day prior
to the earliest of (i) the date Distributions on the Series Preferred
Securities would have been payable except for the election to begin such
Extension Period, (ii) the date the Administrative Trustees are required to
give notice to the New York Stock Exchange, the Nasdaq National Market or
other applicable stock exchange or automated quotation system on which the
Series Preferred Securities are then listed or quoted or to holders of
Series Subordinated Debentures on the record date for such Distributions
or (iii) the date such Distributions are payable, but in any event not less
than one Business Day prior to such record date. The Debenture Trustee shall
give notice of the Corporation's election to begin a new Extension Period to
the holders of the Series Subordinated Debentures. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "Description of Junior Subordinated Debentures--Option to Defer
Interest Payments" in the accompanying Prospectus.
ADDITIONAL SUMS
If the Series Issuer is required to pay any additional taxes, duties or
other governmental charges as a result of a Special Event, the Corporation
will pay as additional amounts on the Series Subordinated Debentures such
amounts as shall be required so that the Distributions payable by the Series
Issuer shall not be reduced as a result of any such additional taxes,
duties or other governmental charges.
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<PAGE>
In the Expense Agreement, the Corporation, as the holder of the Series
Common Securities, has agreed to pay all debts and other obligations, other
than with respect to the Series Preferred Securities, and all costs and
expenses of the Series Issuer. Such obligations, costs and expenses will
include, among others, costs and expenses relating to the organization of the
Series Issuer, the fees and expenses of the Trustees and the costs and
expenses relating to the operation of the Series Issuer.
REDEMPTION
The Series Subordinated Debentures are redeemable prior to maturity at
the option of the Corporation (i) on or after , in whole at
any time or in part from time to time, or (ii) at any time, in whole (but not
in part) within 90 days following the occurrence of a Special Event in each
case at the Redemption Price described below. The proceeds of any such
redemption will be used by the Series Issuer to redeem the Series
Securities. If a partial redemption of the Series Subordinated Debentures
would result in the delisting of the Series Preferred Securities, the
Corporation may only redeem the Series Subordinated Debentures in whole.
The Redemption Price for each Series Subordinated Debenture will be
equal to the principal amount of $25 plus accrued and unpaid interest to the
date fixed for redemption.
DISTRIBUTION OF SERIES SUBORDINATED DEBENTURES
As described under "Certain Terms of Series Preferred Securities--
Liquidation of Series Issuer and Distribution of Series Subordinated
Debentures to Holders", under certain circumstances involving the termination
of the Series Issuer, Series Subordinated Debentures may be
distributed to the holders of the Series Preferred Securities upon
liquidation of the Series Issuer after satisfaction of liabilities to
creditors of the Series Issuer as provided by applicable law. If
distributed to holders of Series Preferred Securities, the Series
Subordinated Debentures will initially be issued in the form of one or more
global securities and DTC, or any successor depositary for the Series
Preferred Securities, will act as depositary for the Series Subordinated
Debentures. If the Series Subordinated Debentures are distributed to the
holders of the Preferred Securities, the Corporation will use its best efforts
to have the Series Subordinated Debentures listed on the NYSE or on such
other exchange as the Preferred Securities are then listed. There can be no
assurance as to the market price of any Series Subordinated Debentures
that may be distributed to the holders of Series Preferred Securities.
CONDITIONAL RIGHT TO ADVANCE MATURITY
If a Tax Event occurs, then the Corporation will have the right (a) prior to
the dissolution of the Series Issuer, to advance the Stated Maturity of
the Series Subordinated Debentures to the minimum extent required, but not
less than 19 and one-half years from the date of original issuance thereof, or
(b) to direct the Property Trustee to dissolve the Series Issuer (if not
previously dissolved) and advance the Stated Maturity of the Series
Subordinated Debentures to the minimum extent required, but not less than 19
and one-half years from the date of original issuance thereof, in each case
such that in the opinion of counsel to the Corporation experienced in such
matters, after advancing the Stated Maturity, interest paid on the Series
Subordinated Debentures will be deductible for federal income tax purposes.
REGISTRATION OF SERIES SUBORDINATED DEBENTURES
The Series Subordinated Debentures will be registered in the name of the
Property Trustee on behalf of the Series Issuer. In the event that the
Series Debentures are distributed to holders of Series Preferred
Securities, it is anticipated that the depositary and other arrangements for
the Series Subordinated Debentures will be substantially identical to
those in effect for the Series Preferred Securities. See "Certain Terms of
Series Preferred Securities--Registration of Series Preferred
Securities".
S-22
<PAGE>
CERTAIN TERMS OF SERIES GUARANTEE
Pursuant to the Series Guarantee, the Corporation guarantees to the
holders of the Series Securities the following payments, to the extent not
paid by the Series Issuer: (i) any accumulated and unpaid Distributions
required to be paid on the Series Securities, to the extent that the
Series Issuer has funds on hand available therefor at such time, (ii) the
Redemption Price with respect to any Series Securities called for
redemption, to the extent that the Series Issuer has funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution and winding-up of the Series Issuer (unless the Series
Subordinated Debentures are distributed to holders of the Series
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment and (b) the amount
of assets of the Series Issuer remaining available for distribution to
holders of the Series Securities in liquidation of the Series Issuer
after payment of creditors of the Series Issuer as required by applicable
law. The Series Guarantee will be qualified as an indenture under the
Trust Indenture Act. The Bank of New York will act as the Guarantee Trustee
for the purposes of compliance with the Trust Indenture Act and will hold the
Series Guarantee for the benefit of the holders of the Series
Securities. The Bank of New York will also act as Debenture Trustee for the
Series Subordinated Debentures and as Property Trustee.
The holders of not less than a majority in aggregate Liquidation Amount of
the Series 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 to the Series Guarantee or to direct the exercise of any trust
power conferred upon the Guarantee Trustee under the Series Guarantee. Any
holder of the Series Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Series Guarantee
without first instituting a legal proceeding against the Series Issuer,
the Guarantee Trustee or any other person or entity. If the Corporation were
to default on its obligation to pay amounts payable under the Series
Subordinated Debentures, the Series Issuer would lack funds for the
payment of Distributions or amounts payable on redemption of the Series
Securities or otherwise, and, in such event, holders of the Series
Securities would not be able to rely upon the Series Guarantee for payment
of such amounts. Instead, if any Debenture Event of Default shall have
occurred and be continuing and such event is attributable to the failure of
the Corporation to pay interest or premium, if any, on or principal of the
Series Subordinated Debentures on the applicable payment date, then a
holder of Series Securities may institute a Direct Action against the
Corporation pursuant to the terms of the Indenture for enforcement of payment
to such holder of the principal of or interest or premium, if any, on such
Series Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Series Securities of such holder. In
connection with such Direct Action, the Corporation will have a right of set-
off under the Indenture to the extent of any payment made by the Corporation
to such holder of Series Securities in the Direct Action. Except as
described herein, holders of Series Securities will not be able to
exercise directly any other remedy available to the holders of the Series
Subordinated Debentures or assert directly any other rights in respect of the
Series Subordinated Debentures. See "Description of Guarantees" in the
accompanying Prospectus. The Trust Agreement provides that each holder of
Series Securities by acceptance thereof agrees to the provisions of the
Series Guarantee, the Expense Agreement and the Indenture.
S-23
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Series Preferred
Securities. This summary only addresses the tax consequences to a person that
acquires Series Preferred Securities on their original issue at their
original offering price and that is (i) an individual citizen or resident of
the United States, (ii) a corporation or partnership organized in or under the
laws of the United States or any state thereof or the District of Columbia or
(iii) an estate or trust, the income of which is subject to United States
federal income tax regardless of source (a "United States Person"). This
summary does not address all tax consequences that may be applicable to a
United States Person that is a beneficial owner of Series Preferred
Securities, nor does it address the tax consequences to (i) persons that are
not United States Persons, (ii) persons that may be subject to special
treatment under United States federal income tax law such as banks, insurance
companies, thrift institutions, regulated investment companies, real estate
investment trusts, tax-exempt organizations and dealers in securities or
currencies, (iii) persons that will hold Series Preferred Securities as
part of a position in a "straddle" or as part of a "hedging", "conversion" or
other integrated investment transaction for federal income tax purposes, (iv)
persons whose functional currency is not the United States dollar or (v)
persons that do not hold Series Preferred Securities as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Baker & Botts, L.L.P., counsel to the Corporation and
the Series Issuer. This summary is based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations, Internal Revenue Service
rulings and pronouncements and judicial decisions in effect on the date of this
Prospectus Supplement, all of which are subject to change at any time. Such
changes may be applied retroactively in a manner that could cause the tax
consequences to vary substantially from the consequences described below,
possibly adversely affecting a beneficial owner of Series Preferred
Securities. In particular, legislation was previously proposed that could have
adversely affected the Corporation's ability to deduct interest on the Series
Subordinated Debentures, which would in turn have permitted the Corporation
to cause a redemption of the Series Preferred Securities or to advance the
Stated Maturity of the Series Subordinated Debentures. See "--Possible Tax
Law Changes" and "Certain Terms of Series Subordinated Debentures--
Conditional Right to Advance Maturity". The authorities on which this summary
is based are subject to various interpretations, and it is therefore possible
that the federal income tax treatment of the purchase, ownership and
disposition of Series Preferred Securities may differ from the treatment
described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS IN LIGHT
OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES PREFERRED SECURITIES, AS WELL
AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE SERIES ISSUER
Assuming compliance with the terms of the Trust Agreement and certain similar
factual matters, the Series Issuer will be classified as a grantor trust
and will not be classified as an association taxable as a corporation for
United States federal income tax purposes. As a result, each beneficial owner
of Series Preferred Securities (a "Securityholder") will be required to
include in its gross income its pro rata share of the interest income,
including original issue discount, paid or accrued with respect to the Series
Subordinated Debentures whether or not cash is actually distributed to the
Securityholders. See "--Interest Income and Original Issue Discount".
S-24
<PAGE>
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury Regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with original issue discount ("OID"). The
Corporation believes that the likelihood of its exercising its option to defer
payments is remote. Based on the foregoing, the Series Subordinated
Debentures will not be considered to be issued with OID at the time of their
original issuance and, accordingly, a Securityholder should include in gross
income such Securityholder's allocable share of interest on the Series
Subordinated Debentures in accordance with such Securityholder's method of tax
accounting.
Under the Regulations, if the Corporation exercised its option to defer any
payment of interest, the Series Subordinated Debentures would at that time
be treated as issued with OID, and all stated interest on the Series
Subordinated Debentures would thereafter be treated as OID as long as the
Series Subordinated Debentures remained outstanding. In such event, all of
a Securityholder's taxable interest income with respect to the Series
Subordinated Debentures would be accounted for as OID on an economic accrual
basis regardless of such Securityholder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable income.
Consequently, a Securityholder would be required to include in gross income
OID even though the Corporation would not make any actual cash payments during
an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"), and it is
possible that the IRS could take a position contrary to the interpretation
herein.
Because income on the Series Preferred Securities will constitute
interest or OID, corporate Securityholders will not be entitled to a
dividends-received deduction with respect to any income recognized with
respect to the Series Preferred Securities.
Subsequent uses of the term "interest" in this summary include income in the
form of OID.
DISTRIBUTION OF SERIES SUBORDINATED DEBENTURES TO HOLDERS OF SERIES
PREFERRED SECURITIES
A distribution by the Series Issuer of the Series Subordinated
Debentures, as described under the caption "Certain Terms of Series
Preferred Securities--Liquidation of Series Issuer and Distribution of
Series Subordinated Debentures to Holders", will be non-taxable and will
result in the Securityholder receiving directly its pro rata share of the
Series Subordinated Debentures previously held indirectly through the
Series Issuer, with a holding period and aggregate tax basis equal to the
holding period and aggregate tax basis such Securityholder had in its Series
Preferred Securities before such distribution. If, however, the
liquidation of the Series Issuer were to occur because the Series
Issuer is subject to United States federal income tax with respect to income
accrued or received on the Series Subordinated Debentures, the
distribution of Series Subordinated Debentures to Securityholders by the
Series Issuer would be a taxable event to the Series Issuer and each
Securityholder, and the Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Series Preferred Securities for the
Series Subordinated Debentures it received upon the liquidation of the
Series Issuer. A Securityholder will include interest income in respect of
Series Subordinated Debentures received from the Series Issuer in the
manner described above under "--Interest Income and Original Issue Discount".
Under certain circumstances described herein (see "Certain Terms of Series
Subordinated Debentures--Redemption" and "Certain Terms of Series
Preferred Securities--Redemption"), the
S-25
<PAGE>
Series Subordinated Debentures may be redeemed by the Corporation for cash
and the proceeds of such redemption distributed by the Series Issuer to
holders in redemption of their Series Preferred Securities. Under current
law, such a redemption would, for United States federal income tax purposes,
constitute a taxable disposition of the redeemed Series Preferred
Securities, and a holder could recognize gain or loss as if it sold such
redeemed Series Preferred Securities for cash. See "--Sales or Redemption
of Series Preferred Securities".
SALE OR REDEMPTION OF SERIES PREFERRED SECURITIES
A Securityholder that sells (including a redemption for cash) Series
Preferred Securities will recognize gain or loss equal to the difference
between its adjusted tax basis in the Series Preferred Securities and the
amount realized on the sale of such Series Preferred Securities. The
amount realized is equal to the cash received, less the amount of accrued and
unpaid interest with respect to the Securityholder's pro rata share of the
Series Subordinated Debentures. A Securityholder must include his share of
such accrued and unpaid interest as ordinary income. Assuming that the
Corporation does not exercise its option to defer payment of interest on the
Series Subordinated Debentures and the Series Preferred Securities are
not considered issued with OID, a Securityholder's adjusted tax basis in the
Series Preferred Securities generally will be its initial purchase price.
If the Series Subordinated Debentures are deemed to be issued with OID as
a result of the Corporation's deferral of any interest payment or otherwise, a
Securityholder's tax basis in the Series Preferred Securities generally
will be its initial purchase price, increased by OID previously includible in
such Securityholder's gross income to the date of disposition and decreased by
distributions or other payments received on the Series Preferred
Securities since and including the date of the first Extension Period. Such
gain or loss generally will be a capital gain or loss and generally will be a
long-term capital gain or loss if the Series Preferred Securities have
been held for more than one year.
Should the Corporation exercise its option to defer any payment of interest
on the Series Subordinated Debentures, the Series Preferred Securities
may trade at a price that does not accurately reflect the value of accrued but
unpaid interest with respect to the underlying Series Subordinated
Debentures. In the event of such a deferral, a Securityholder who disposes of
its Series Preferred Securities between record dates for payments of
distributions thereon will be required to include in income as ordinary income
accrued but unpaid interest on the Series Subordinated Debentures to the
date of disposition as OID and to add such amount to its adjusted tax basis in
its pro rata share of the underlying Series Subordinated Debentures deemed
disposed of. To the extent the selling price is less than the Securityholder's
adjusted tax basis, such Securityholder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid or accrued on the Series Preferred
Securities held of record by United States Persons (other than corporations
and other exempt Securityholders) will be reported to the IRS. "Backup"
withholding at a rate of 31% will apply to payments of interest to non-exempt
United States Persons unless the Securityholder furnishes its taxpayer
identification number in the manner prescribed in applicable Treasury
Regulations, certifies that such number is correct, certifies as to no loss of
exemption from backup withholding and meets certain other conditions.
Payment of the proceeds from the disposition of Series Preferred
Securities to or through the United States office of a broker is subject to
information reporting and backup withholding unless the Securityholder or
beneficial owner establishes an exemption from information reporting and
backup withholding.
S-26
<PAGE>
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability; provided the required information
is furnished to the IRS.
It is anticipated that income on the Series Preferred Securities will be
reported to holders on Form 1099 and mailed to holders of the Series
Preferred Securities by January 31 following each calendar year.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's 1996 budget proposal, was introduced to
the 104th Congress. The Bill would have, among other things, generally denied
interest deductions for interest accrued on an instrument issued by a
corporation that had a maximum term of more than 20 years and that was not
shown as indebtedness on the separate balance sheet of the issuer or, where
the instrument was issued to a related party (other than a corporation), where
the holder or some other related party issued a related instrument that was
not shown as indebtedness on the issuer's consolidated balance sheet. The Bill
would have also generally denied interest deductions for interest on an
instrument issued by a corporation that had a maximum weighted-average
maturity of more than 40 years. The above-described provisions of the Bill
were proposed to be effective generally for instruments issued on or after
December 7, 1995. If this provision were to apply to the Series
Subordinated Debentures, the Corporation would not be able to deduct interest
on the Series 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. Under current law, the
Corporation will be able to deduct interest on the Series Subordinated
Debentures. Although the 104th Congress adjourned without enacting the above-
described provisions of the Bill, there can be no assurance that current or
future legislative proposals or final legislation will not adversely affect
the ability of the Corporation to deduct interest on the Series
Subordinated Debentures. Such a change could give rise to a Tax Event, which
would permit the Corporation to cause a redemption of the Series Preferred
Securities. See "Certain Terms of Series Subordinated Debentures--
Redemption" and "Certain Terms of the Series Subordinated Debentures--
Conditional Right to Advance Maturity" in this Prospectus Supplement and
"Description of Preferred Securities--Redemption or Distribution--Distribution
of the Corresponding Junior Subordinated Debentures" in the accompanying
Prospectus.
S-27
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Corporation and the Series Issuer have agreed that the Series Issuer
will sell to each of the Underwriters named below, and each of such
Underwriters has severally agreed to purchase from the Series Issuer, the
respective number of Series Preferred Securities set forth opposite its
name below:
<TABLE>
<CAPTION>
NUMBER OF SERIES
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
Goldman, Sachs & Co........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................
-------
Total....................................................
=======
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Series Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series Preferred Securities in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus Supplement and in part to certain dealers at
such price less a concession of $ per Series Preferred Security. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Series Preferred Security to certain brokers and
dealers. After the Series 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 Underwriters.
In view of the fact that the proceeds from the sale of the Series
Preferred Securities will be used to purchase the Series Subordinated
Debentures issued by the Corporation, the Underwriting Agreement provides that
the Corporation will pay as Underwriters' compensation for the Underwriters'
arranging the investment therein of such proceeds an amount of $ per
Series Preferred Security for the accounts of the several Underwriters.
The Corporation and the Series Issuer have agreed that, during the
period beginning on the date of the Underwriting Agreement and continuing to
and including the date of delivery of the Series Preferred Securities to
the Underwriters in accordance with the Underwriting Agreement, they will not
offer, sell, contract to sell or otherwise dispose of any Series Preferred
Securities, any security convertible into or exchangeable into or exercisable
for Series Preferred Securities or Series Subordinated Debentures or
any debt securities substantially similar to the Series Subordinated
Debentures or any equity securities substantially similar to the Series
Preferred Securities (except for the Series Subordinated Debentures and
Series Preferred Securities issued pursuant to the Underwriting
Agreement), without the prior written consent of the Underwriters.
Prior to this offering, there has been no public market for the Series
Preferred Securities. The Corporation intends to make application to list the
Preferred Securities on the NYSE. If approved, trading of the Preferred
Securities on the NYSE is expected to commence within the 30-day period after
the initial delivery of the Preferred Securities. 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. The Underwriters have advised the
Corporation that they intend to make a market in the Series Preferred
Securities, but are not
S-28
<PAGE>
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 Series Preferred Securities.
The Corporation and the Series Issuer have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
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 Corporation and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series
Preferred Securities, the enforceability of the Trust Agreement and the
formation of the Series Issuer will be passed upon by Richards, Layton &
Finger, Wilmington, Delaware, special Delaware counsel to the Corporation and
the Series Issuer. The validity of the Series Guarantee and the Series
Subordinated Debentures will be passed upon for the Corporation by Baker &
Botts, L.L.P., Houston, Texas. Certain legal matters will be passed upon for
the Corporation by Hugh Rice Kelly, Esq., Executive Vice President, General
Counsel and Corporate Secretary of the Corporation, and for the Underwriters
by Dewey Ballantine, New York, New York. Certain matters relating to United
States federal income tax considerations described in this Prospectus
Supplement will be passed upon for the Corporation by Baker & Botts, L.L.P.
S-29
<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 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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 21, 1997
$350,000,000
HOUSTON LIGHTING & POWER COMPANY
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
HL&P CAPITAL TRUST I
HL&P CAPITAL TRUST II
HL&P CAPITAL TRUST III
HL&P CAPITAL TRUST IV
TRUST PREFERRED SECURITIES AND CAPITAL SECURITIES, FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
HOUSTON LIGHTING & POWER COMPANY
Houston Lighting & Power Company, a Texas corporation ("HL&P" or the
"Corporation"), may from time to time offer in one or more series or issuances
its junior subordinated deferrable interest debentures (the "Junior
Subordinated Debentures"). The Junior Subordinated Debentures will be unsecured
and subordinate and junior in right of payment to all Senior Debt (as defined
in "Description of Junior Subordinated Debentures--Subordination") of the
Corporation. If provided in an accompanying Prospectus Supplement, the
Corporation will have the right to defer payments of interest on any series of
Junior Subordinated Debentures by extending the interest payment period thereon
at any time or from time to time for up to such number of consecutive interest
payment periods (which shall not extend beyond the Stated Maturity (as defined
herein) of the Junior Subordinated Debentures) with respect to each deferral
period as may be specified in such Prospectus Supplement (each, an "Extension
Period"). In such circumstances, however, the Corporation would not be
permitted, subject to certain exceptions set forth herein, to declare or pay
any dividends, distributions or other payments with respect to, or repay,
repurchase, redeem or otherwise acquire, the Corporation's capital stock or
debt securities that rank pari passu in all respects with or junior to such
series of Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures--Option to Defer Interest Payments" and "--Restrictions
on Certain Payments".
HL&P Capital Trust I, HL&P Capital Trust II, HL&P Capital Trust III and HL&P
Capital Trust IV, each a statutory business trust created under the laws of the
State of Delaware (each, an "Issuer", and collectively, the "Issuers"), may
severally offer, from time to time, preferred securities (collectively, the
"Preferred Securities") or capital securities (collectively, the "Capital
Securities" and, together with the Preferred Securities, the "Securities")
representing undivided beneficial interests in the assets of such Issuer. The
Corporation will be the owner of common securities (the "Common Securities"
and, together with the Securities, the "Trust Securities") representing common
undivided beneficial interests in the assets of such Issuer. Holders of the
Securities will be entitled to receive preferential cumulative cash
distributions ("Distributions") accumulating from the date of original issuance
and payable periodically as specified in an accompanying Prospectus Supplement.
Concurrently with the issuance by an Issuer of its Securities, such Issuer will
invest the proceeds thereof and of contributions received in respect of the
Common Securities in a corresponding series of the Corporation's Junior
Subordinated Debentures (the "Corresponding Junior Subordinated Debentures")
with terms corresponding to the terms of that Issuer's Securities (the "Related
Securities").
Accordingly, if as provided in an accompanying Prospectus Supplement, the
Corporation has the right to defer the payment of interest on a series of
Corresponding Junior Subordinated Debentures, then, if interest payments are so
deferred, Distributions on the Related Securities would also be deferred, but
would continue to accumulate at the rate per annum set forth in the related
Prospectus Supplement. See "Description of Securities--Distributions".
(continued on next page)
-----------
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.
-----------
The date of this Prospectus is January , 1997.
<PAGE>
(cover page continued)
Taken together, the Corporation's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture, the related Trust
Agreement, the related Expense Agreement and the related Guarantee (each as
defined herein), in the aggregate, provide a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Related Securities. See "Relationship Among the Securities, the
Corresponding Junior Subordinated Debentures, the Expense Agreement and the
Guarantees--Full and Unconditional Guarantee". The payment of Distributions
with respect to the Securities of each Issuer and payments on liquidation of
such Issuer or redemption of such Securities, in each case to the extent of
funds held by such Issuer, are each irrevocably guaranteed by the Corporation
as described herein (each, a "Guarantee"). See "Description of Guarantees". The
obligations of the Corporation under each Guarantee will be unsecured and
subordinated and junior in right of payment to all Senior Debt of the
Corporation.
The Corresponding Junior Subordinated Debentures and the right to
reimbursement of expenses under the related Expense Agreement will be
substantially all of the assets of each Issuer, and payments under the
Corresponding Junior Subordinated Debentures and the related Expense Agreement
will be the only revenues of each Issuer. If so provided in an accompanying
Prospectus Supplement, the Corporation may redeem the Corresponding Junior
Subordinated Debentures (and thereby cause the redemption of the Trust
Securities) or may direct each Property Trustee (as defined herein) to dissolve
each Issuer and, after satisfaction of liabilities to the creditors of such
Issuer as required by applicable law, cause the Corresponding Junior
Subordinated Debentures to be distributed to the holders of Securities upon
liquidation of their interests in such Issuer. See "Description of Securities--
Liquidation Distribution Upon Termination".
The Junior Subordinated Debentures and Securities may be offered in amounts,
at prices and on terms to be determined at the time of offering; provided,
however, the aggregate initial public offering price of all Junior Subordinated
Debentures and Securities issued pursuant to the Registration Statement of
which this Prospectus forms a part shall not exceed $350,000,000. Certain
specific terms of the Junior Subordinated Debentures or Securities in respect
of which this Prospectus is being delivered will be described in an
accompanying Prospectus Supplement, including without limitation and where
applicable and to the extent not set forth herein, (a) in the case of Junior
Subordinated Debentures, the specific designation, aggregate principal amount,
denominations, Stated Maturity (including any provisions for the advancement or
extension thereof), interest payment dates, interest rate or method of
calculating interest, if any, applicable Extension Period or interest deferral
terms, if any, place or places where principal, premium, if any, and interest,
if any, will be payable, any terms of redemption, any sinking fund provisions,
terms for any conversion or exchange into other securities, initial offering or
purchase price, methods of distribution and any other special terms and (b) in
the case of Securities, the identity of the Issuer, specific title, aggregate
stated liquidation amount, number of securities, Distribution rate or method of
calculating such rate, Distribution payment dates, applicable Distribution
deferral terms, if any, place or places where Distributions will be payable,
any terms of redemption, exchange, initial offering or purchase price, methods
of distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable, about
certain United States federal income tax consequences relating to the Junior
Subordinated Debentures or Securities.
The Junior Subordinated Debentures and Securities may be sold to or through
underwriters, through dealers, remarketing firms or agents or directly to
purchasers. See "Plan of Distribution". The names of any underwriters, dealers,
remarketing firms or agents involved in the sale of Junior Subordinated
Debentures or Securities in respect of which this Prospectus is being delivered
and any applicable fee, commission or discount arrangements with them will be
set forth in a Prospectus Supplement. The Prospectus Supplement will state
whether the Junior Subordinated Debentures or Securities will be listed on any
national securities exchange or automated quotation system. If the Junior
Subordinated Debentures or Securities are not listed on any national securities
exchange or automated quotation system, there can be no assurance that there
will be a secondary market for the Junior Subordinated Debentures or
Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Securities unless accompanied by a Prospectus Supplement.
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AVAILABLE INFORMATION
The Corporation 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., 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., Washington, D.C. 20549. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov.
The Corporation and the Issuers have filed with the Commission a
Registration Statement on Form S-3 (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, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Corporation and the securities offered hereby,
reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules 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 or
through the Commission's home page on the Internet. 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 any Issuer have been included herein.
The Corporation and the Issuers do not consider that such financial statements
would be material to holders of the Securities because each 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 holding as trust assets the Corresponding Junior
Subordinated Debentures and issuing the Trust Securities. Furthermore, taken
together, the Corporation's obligations under each series of Corresponding
Junior Subordinated Debentures, the Indenture, the related Trust Agreement,
the related Expense Agreement and the related Guarantee provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Related Securities of an Issuer.
See "The Issuers", "Description of Securities", "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" and
"Description of Guarantees". In addition, the Corporation does not expect that
any of the Issuers will be filing reports under the Exchange Act with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
(1) The Corporation's Annual Report on Form 10-K for its fiscal year
ended December 31, 1995;
(2) The Corporation's Quarterly Reports on Form 10-Q for its quarterly
periods ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(3) The Corporation's Current Report on Form 8-K filed on August 12,
1996.
Each document or report filed by the Corporation pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made
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by this Prospectus shall be deemed to be incorporated by reference into this
Prospectus and to be a part of this Prospectus from the date of filing of such
document. Any statement contained herein, or in any document all or a portion
of which is incorporated or deemed to be 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 which also is or is deemed to be
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 Corporation 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:
Corporate Secretary, Houston Lighting & Power Company, 1111 Louisiana,
Houston, Texas 77002, telephone number (713) 207-1111.
HOUSTON LIGHTING & POWER COMPANY
The Corporation is engaged in the generation, transmission, distribution and
sale of electric energy and serves approximately 1.5 million residential,
commercial and industrial customers in a 5,000 square-mile area of the Texas
Gulf Coast, including Houston. The address of the Corporation's principal
executive offices is 1111 Louisiana, Houston, Texas 77002. Its telephone
number is (713) 207-1111.
The Corporation is a subsidiary of Houston Industries Incorporated ("Houston
Industries"), which, directly or indirectly, owns all of the Corporation's
outstanding common stock. Houston Industries is a holding company as defined
in the Public Utility Holding Company Act of 1935, as amended (the "1935
Act"); however, based upon the intrastate operations of the Corporation and
the exemptions applicable to certain other subsidiaries of Houston Industries,
Houston Industries is exempt from regulation as a "registered" holding company
under the 1935 Act except with respect to the acquisition of voting securities
of other domestic public utility companies and holding companies.
RECENT DEVELOPMENTS; NORAM MERGER
The Corporation is a party to an Agreement and Plan of Merger, dated as of
August 11, 1996, as amended (the "Merger Agreement"), among the Corporation,
Houston Industries, a subsidiary of Houston Industries ("Merger Sub") and
NorAm Energy Corp. ("NorAm"). The Merger Agreement provides for (i) the merger
of Houston Industries into the Corporation (the "HI/HL&P Merger"), as a result
of which each outstanding share of common stock of Houston Industries will be
converted into one share of common stock of the Corporation, which will be
renamed "Houston Industries Incorporated" ("Houston") and will continue to
conduct the Corporation's electric utility business under the Corporation's
name, and (ii) the merger of NorAm into Merger Sub (the "NorAm Merger", and
together with the HI/HL&P Merger, the "Basic Mergers"), as a result of which
NorAm will become a wholly owned subsidiary of Houston and the outstanding
shares of common stock of NorAm will be converted into the right to receive
cash or Houston common stock. The Merger Agreement also provides that other
alternative merger structures could be used rather than the Basic Mergers in
certain circumstances. In one such alternative, Houston Industries and NorAm
would both be merged into the Corporation, with the Corporation surviving (the
"Alternative Merger"). The term "Transaction" refers to the business
combination pursuant to the Merger Agreement whether implemented using the
Basic Mergers or any other alternative merger structure. Consummation of the
Transaction is subject to certain customary conditions, including receipt of
certain regulatory approvals. The shareholders of each of Houston Industries
and NorAm approved the Transaction on December 17, 1996.
THE ISSUERS
Each Issuer is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by the Corporation, as depositor of
the Issuer, and the Delaware Trustee (as defined herein) of such Issuer and
(ii) the filing of a certificate of trust with the Delaware Secretary of
State. Each trust agreement will be amended and restated in its entirety
(each, as so amended and
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restated, a "Trust Agreement") substantially in the form filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. Each
Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer exists for
the exclusive purposes of (i) issuing and selling its Trust Securities, (ii)
using the proceeds from the sale of such Trust Securities to acquire a series
of Corresponding Junior Subordinated Debentures issued by the Corporation and
(iii) engaging in only those activities necessary, convenient or incidental
thereto set forth in the related Trust Agreement (such as registering the
transfer of the Trust Securities). Accordingly, the Corresponding Junior
Subordinated Debentures and the right to reimbursement of expenses under the
related Expense Agreement will be substantially all of the assets of each
Issuer, and payments under the Corresponding Junior Subordinated Debentures
and the related Expense Agreement will be the only revenues of each Issuer.
All of the Common Securities of each Issuer will be owned by the
Corporation. The Common Securities of an Issuer will rank pari passu, and
payments will be made thereon pro rata, with the Securities of such Issuer,
except that upon the occurrence and continuance of an event of default under a
Trust Agreement resulting from an event of default under the Indenture, the
rights of the Corporation as holder of the Common Securities to payment in
respect of Distributions and payments upon liquidation or redemption will be
subordinated to the rights of the holders of the Securities of such Issuer.
See "Description of Securities--Subordination of Common Securities". The
Corporation will acquire Common Securities in an aggregate Liquidation Amount
equal to not less than 3% of the total capital of each Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may be dissolved earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by the Corporation as holder of
the Common Securities. The trustees for each Issuer are The Bank of New York,
as the Property Trustee (the "Property Trustee"), The Bank of New York
(Delaware), as the Delaware Trustee (the "Delaware Trustee"), and two
individual trustees (the "Administrative Trustees") who will be selected by
the Corporation (collectively, the "Issuer Trustees"). The Bank of New York,
as Property Trustee, will act as sole trustee under each Trust Agreement for
purposes of compliance with the Trust Indenture Act. The Bank of New York will
also act as trustee under the Guarantees and the Indenture. See "Description
of Guarantees" and "Description of Junior Subordinated Debentures". The holder
of the Common Securities of an Issuer, or, if an event of default under the
Indenture has occurred and is continuing, the holders of a majority in
Liquidation Amount of the Related Securities will be entitled to appoint,
remove or replace the Property Trustee and/or the Delaware Trustee for such
Issuer. In no event will the holders of the 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 each Issuer Trustee are governed by the applicable Trust
Agreement. The Corporation will pay all fees and expenses related to each
Issuer and the offering of the Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of each Issuer.
The principal executive office of each Issuer is 200 West 9th Street Plaza,
Box 2105, Wilmington, Delaware 19899 and the telephone number of each Issuer
is (302) 655-8894.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Corporation intends to use the proceeds from the sale of its Junior
Subordinated Debentures (including Corresponding Junior Subordinated
Debentures issued to the Issuers in connection with the investment by the
Issuers of all of the proceeds from the sale of Trust Securities) for general
corporate purposes, including redemption or repurchase of shares of its
outstanding preferred stock, the satisfaction of other obligations or for such
other purposes as may be specified in the applicable Prospectus Supplement.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as
so supplemented, the "Indenture"), between the Corporation and The Bank of New
York, as trustee (the "Debenture Trustee"). This summary of certain terms and
provisions of the Junior Subordinated Debentures, Corresponding Junior
Subordinated Debentures and the Indenture, which summarizes the material
provisions thereof, 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 to the Trust Indenture Act, to each of which description
reference is hereby made. The Indenture is qualified under the Trust Indenture
Act. Whenever particular defined terms of the Indenture (as supplemented or
amended from time to time) are referred to herein or in a Prospectus
Supplement, such defined terms are incorporated herein or therein by
reference.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with all
other series of Junior Subordinated Debentures unless otherwise provided in
the applicable Prospectus Supplement and will be unsecured and subordinate and
junior in right of payment to the extent and in the manner set forth in the
Indenture to all Senior Debt (as defined below) of the Corporation. See "--
Subordination". Except as otherwise provided in the applicable Prospectus
Supplement, the Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any other existing indenture or any other indenture that
the Corporation may enter into in the future or otherwise. See "--
Subordination" and the applicable Prospectus Supplement relating to any
offering of Securities or Junior Subordinated Debentures.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
The applicable Prospectus Supplement will describe the following terms of
the Junior Subordinated Debentures: (1) the title of the Junior Subordinated
Debentures; (2) any limit upon the aggregate principal amount of the Junior
Subordinated Debentures; (3) the date or dates on which the principal of the
Junior Subordinated Debentures is payable (the "Stated Maturity") or the
method of determination thereof and the right of the Corporation, if any, to
advance or extend the Stated Maturity; (4) the rate or rates, if any, at which
the Junior Subordinated Debentures shall bear interest, the dates on which any
such interest shall be payable (the "Interest Payment Dates"), the rate or
rates and extent to which interest, if any, shall accrue on any interest the
payment of which is not made on the applicable Interest Payment Date, the
right, if any, of the Corporation to defer or extend an Interest Payment Date
and the record dates for any interest payable on any Interest Payment Date
(the "Regular Record Dates") or the method by which any of the foregoing shall
be determined; (5) the place or places where, subject to the terms of the
Indenture as described below under "--Payment and Paying Agents", the
principal of and premium, if any, and interest on the Junior Subordinated
Debentures will be payable, the place or places where, subject to the terms of
the Indenture as described below under "--Denominations, Registration and
Transfer", the Junior Subordinated Debentures may be presented for
registration of transfer or exchange and the place or places where notices and
demands to or upon the Corporation in respect of the Junior Subordinated
Debentures and the Indenture may be made ("Place of Payment"); (6) any period
or periods within, or date or dates on which, the price or prices at which and
the terms and conditions upon which the Junior Subordinated Debentures may be
redeemed, in whole or in part, at the option of the Corporation; (7) the
obligation or the right, if any, of the Corporation to redeem, repay or
purchase the Junior
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Subordinated Debentures pursuant to any sinking fund, amortization or
analogous provisions, or at the option of the holder thereof, and the period
or periods within which, the price or prices at which, the currency or
currencies (including currency unit or units) in which and the other terms and
conditions upon which the Junior Subordinated Debentures shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation; (8) the
denominations in which any Junior Subordinated Debentures shall be issuable,
if other than $25 and any integral multiple thereof; (9) if other than U.S.
Dollars, the currency or currencies (including currency unit or units) in
which the principal of (and premium, if any) and interest, if any, on the
Junior Subordinated Debentures shall be payable, or in which the Junior
Subordinated Debentures shall be denominated; (10) any additions,
modifications or deletions in the events of default under the Indenture or
covenants of the Corporation set forth therein with respect to the Junior
Subordinated Debentures; (11) if other than the principal amount thereof, the
portion of the principal amount of Junior Subordinated Debentures that shall
be payable upon declaration of acceleration of the maturity thereof; (12) any
additions or changes to the Indenture with respect to a series of Junior
Subordinated Debentures as shall be necessary to permit or facilitate the
issuance of such series in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; (13) any index or indices
used to determine the amount of payments of principal of and premium, if any,
on the Junior Subordinated Debentures or the manner in which such amounts will
be determined; (14) whether the Junior Subordinated Debentures, or any portion
thereof, shall initially be issuable in the form of a temporary Global
Security representing all or such portion of the Junior Subordinated
Debentures of such series and provisions for the exchange of such temporary
Global Security for definitive Junior Subordinated Debentures of such series;
(15) subject to the terms described herein under "--Global Junior Subordinated
Debentures", whether the Junior Subordinated Debentures of the series shall be
issued in whole or in part in the form of one or more Global Securities and,
in such case, the respective depositaries for such Global Securities; (16) the
appointment of any paying agent or agents; (17) the terms of any right to
convert or exchange the Junior Subordinated Debentures into any other
securities or property of the Corporation and any additions or changes to the
Indenture with respect to the series of Junior Subordinated Debentures to
permit or facilitate such conversion or exchange; (18) the relative degree, if
any, to which such Junior Subordinated Debentures of the series shall be
senior to or be subordinated to other series of Junior Subordinated Debentures
in right of payment, whether such other Junior Subordinated Debentures are
outstanding or not; and (20) any other terms of the Junior Subordinated
Debentures not inconsistent with the provisions of the Indenture.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States federal
income tax consequences and special considerations applicable to any such
Junior Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest on any
Junior Subordinated Debentures is payable in one or more foreign currencies or
currency units, the restrictions, elections, certain United States federal
income tax consequences, specific terms and other information with respect to
such series of Junior Subordinated Debentures and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
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DENOMINATIONS, REGISTRATION AND TRANSFER
The Junior Subordinated Debentures will be issuable in registered form
without coupons in denominations specified in the applicable Prospectus
Supplement. Junior Subordinated Debentures of any series will be exchangeable
for other Junior Subordinated Debentures of the same series of any authorized
denominations, of a like aggregate principal amount, of the same original
issue date and Stated Maturity and having the same terms.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate securities registrar or at
the office of any transfer agent designated by the Corporation for such
purpose with respect to any series of Junior Subordinated Debentures and
referred to in the applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in
the Indenture. The Corporation will appoint the Debenture Trustee as
securities registrar under the Indenture. If the applicable Prospectus
Supplement refers to any transfer agents (in addition to the securities
registrar) initially designated by the Corporation with respect to any series
of Junior Subordinated Debentures, the Corporation may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that the Corporation
maintains a transfer agent in each Place of Payment for such series. The
Corporation may at any time designate additional transfer agents with respect
to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, transfer or exchange Junior
Subordinated Debentures of any series during a period beginning at the opening
of business 15 days before the day of mailing of a notice of redemption of
Junior Subordinated Debentures of that series and ending at the close of
business on the day of such mailing of notice of redemption or (ii) transfer
or exchange any Junior Subordinated Debentures so selected for redemption,
except, in the case of any Junior Subordinated Debentures to be redeemed in
part, any portion thereof not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Junior Subordinated Debentures that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global Junior
Subordinated Debentures may be issued only in fully registered form and in
either temporary or permanent form. Global Junior Subordinated Debentures may
not be exchanged in whole or in part for the individual Junior Subordinated
Debentures represented thereby, and no transfer of a Global Junior
Subordinated Debenture in whole or in part may be registered in the name of
any person other than the Depositary or a nominee thereof unless (A) the
Depositary (i) has notified the Corporation that it is unwilling or unable to
continue as depositary for such Global Junior Subordinated Debenture or (ii)
has ceased to be a clearing agency registered under the Exchange Act at a time
when the Depositary is required to be so registered to act as depositary, in
each case unless the Corporation has approved a successor depositary within 90
days, (B) there shall have occurred and be continuing an event of default
under the Indenture with respect to such Global Junior Subordinated Debenture,
(C) the Corporation in its sole discretion determines that such Global Junior
Subordinated Debenture will be so exchangeable or transferable or (D) there
shall exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated in the
Indenture. Subject to the foregoing, any exchange of a Global Junior
Subordinated Debenture for other Junior Subordinated Debentures may be made in
whole or in part, and all Junior Subordinated Debentures issued in exchange
for a Global Junior Subordinated Debenture or any portion thereof shall be
registered in such names as the Depositary for such Global Junior Subordinated
Debenture shall direct.
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The specific terms of the depositary arrangement with respect to a series of
Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture and the deposit
of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or
its nominee will credit, on its book-entry registration and transfer system,
the respective principal amounts of the individual Junior Subordinated
Debentures represented by such Global Junior Subordinated Debenture to the
accounts of persons that have accounts with such Depositary ("Participants").
Such accounts shall be designated by the dealers, underwriters or agents with
respect to such Junior Subordinated Debentures or by the Corporation if such
Junior Subordinated Debentures are offered and sold directly by the
Corporation. Ownership of beneficial interests in a Global Junior Subordinated
Debenture will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Junior
Subordinated Debenture will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable Depositary
or its nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the transfer of beneficial interests in a
Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture or its
nominee is the registered owner of such Global Junior Subordinated Debenture,
such Depositary or such nominee, as the case may be, will be considered the
sole owner or holder of the Junior Subordinated Debentures represented by such
Global Junior Subordinated Debenture for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in a Global Junior
Subordinated Debenture will not be entitled to have any of the individual
Junior Subordinated Debentures of the series represented by such Global Junior
Subordinated Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Junior Subordinated
Debentures of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures. None of the Corporation, the Debenture Trustee, any
Paying Agent, or the Securities Registrar for such Junior Subordinated
Debentures will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a permanent Global
Junior Subordinated Debenture representing any of such Junior Subordinated
Debentures, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Junior Subordinated Debenture for such Junior
Subordinated Debentures as shown on the records of such Depositary or its
nominee. The Corporation also expects that payments by Participants to owners
of beneficial interests in such Global Junior Subordinated Debenture held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for
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the accounts of customers in bearer form or registered in "street name". Such
payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days, the Corporation
will issue individual Junior Subordinated Debentures of such series in
exchange for the Global Junior Subordinated Debenture representing such series
of Junior Subordinated Debentures. In addition, the Corporation may at any
time and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Junior Subordinated Debentures,
determine not to have any Junior Subordinated Debentures of such series
represented by one or more Global Junior Subordinated Debentures and, in such
event, will issue certificated Junior Subordinated Debentures of such series
in exchange for the Global Junior Subordinated Debenture. Further, if the
Corporation so specifies with respect to the Junior Subordinated Debentures of
a series, an owner of a beneficial interest in a Global Junior Subordinated
Debenture representing Junior Subordinated Debentures of such series may, on
terms acceptable to the Corporation, the Debenture Trustee and the Depositary
for such Global Junior Subordinated Debenture, receive certificated Junior
Subordinated Debentures of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Junior Subordinated Debentures. In any such instance, an
owner of a beneficial interest in a Global Junior Subordinated Debenture will
be entitled to physical delivery of certificated Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture equal in principal amount to such beneficial interest and to have
such Junior Subordinated Debentures registered in its name. Individual Junior
Subordinated Debentures of such series so issued will be issued in
denominations, unless otherwise specified by the Corporation, of $25 and
integral multiples thereof if the Related Securities are Preferred Securities
or $1,000 and integral multiples thereof if the Related Securities are Capital
Securities.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in the City of
New York or at the office of such paying agent or paying agents as the
Corporation may designate from time to time in the applicable Prospectus
Supplement, except that at the option of the Corporation payment of any
interest may be made, except in the case of Global Junior Subordinated
Debentures, (i) by check mailed to the address of the person entitled thereto
as such address shall appear in the securities register or (ii) by transfer to
an account designated by the person entitled thereto as specified in the
securities register. Unless otherwise indicated in the applicable Prospectus
Supplement, payment of any interest on Junior Subordinated Debentures will be
made to the person in whose name such Junior Subordinated Debenture is
registered at the close of business on the Regular Record Date for such
interest, except in the case of defaulted interest. The Corporation may at any
time designate additional paying agents or rescind the designation of any
paying agent; however, the Corporation will at all times be required to
maintain a paying agent in each Place of Payment for each series of Junior
Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent, or then
held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any)
or interest has become due and payable shall, at the written request of the
Corporation, be repaid to the Corporation and discharged from the trust of the
Indenture, and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
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OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, so long as no event of
default has occurred under the Indenture, the Corporation will have the right
at any time and from time to time during the term of any series of Junior
Subordinated Debentures to defer payment of interest for up to such number of
consecutive interest payment periods as may be specified in the applicable
Prospectus Supplement (each, an "Extension Period"), subject to the terms,
conditions and covenants, if any, specified in such Prospectus Supplement;
provided that such Extension Period may not extend beyond the Stated Maturity
of such series of Junior Subordinated Debentures. Certain United States
federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option, redeem the Junior Subordinated Debentures of
any series in whole at any time or in part from time to time. If the Junior
Subordinated Debentures of any series are so redeemable only on or after a
specified date or upon the satisfaction of additional conditions, the
applicable Prospectus Supplement will specify such date or describe such
conditions. Junior Subordinated Debentures in denominations larger than $25
may be redeemed in part but only in integral multiples of $25. Except as
otherwise specified in the applicable Prospectus Supplement, the redemption
price for any Junior Subordinated Debenture so redeemed shall equal any
accrued and unpaid interest thereon to the redemption date, plus 100% of the
principal amount thereof.
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 its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date
interest will cease to accrue on such Junior Subordinated Debentures or
portions thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant, as to each series of Junior Subordinated
Debentures, 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 Corporation's capital stock or (ii) make any payment of
principal or of interest or premium, if any, on or repay, repurchase or redeem
any debt security of the Corporation (including other series of Junior
Subordinated Debentures) that, in either case, rank pari passu with or junior
in interest to the Junior Subordinated Debentures of such series or make any
guarantee payments with respect to any guarantee by the Corporation of the
debt securities of any subsidiary of the Corporation if such guarantee ranks
pari passu with or junior in interest to the Junior Subordinated Debentures of
such series (other than (a) dividends or distributions in capital stock of the
Corporation, (b) any declaration of a dividend under a stockholders' rights
plan or in connection with the implementation of a stockholders' rights plan,
the issuance of capital stock of the Corporation under a stockholders' rights
plan or the redemption or repurchase of any such rights pursuant to a
stockholders' rights plan, (c) payments under any Guarantee with respect to
the series of Related Securities and (d) purchases of common stock related to
the issuance of common stock or rights under any of the Corporation's benefit
plans for its directors, officers or employees, related to the issuance of
common stock or rights under a dividend reinvestment and stock purchase plan
or related to the issuance of common stock (or securities convertible into or
exchangeable for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period) if
at such time (i) a Debenture Event of Default with respect to such series of
Junior
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Subordinated Debentures shall have occurred and be continuing, (ii) if such
Junior Subordinated Debentures are held by an Issuer of a series of Related
Securities, the Corporation shall be in default with respect to its payment of
any obligations under the Guarantee relating to such Related Securities or
(iii) the Corporation shall have given notice of its selection of an Extension
Period as provided in the Indenture with respect to the Junior Subordinated
Debentures of such series and shall not have rescinded such notice, or an
Extension Period, or any extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without the
consent of the holders of any series of Junior Subordinated Debentures, enter
into an indenture or indentures supplemental to the Indenture for specified
purposes, including, among other things, (i) curing ambiguities, defects or
inconsistencies; provided, that any such action does not materially adversely
affect the interest of the holders of any series of Junior Subordinated
Debentures or, in the case of Corresponding Junior Subordinated Debentures,
the holders of the Related Securities so long as they remain outstanding, and
(ii) qualifying, or maintaining the qualification of, the Indenture under the
Trust Indenture Act. The Indenture contains provisions permitting the
Corporation and the Debenture Trustee, with the consent of the holders of not
less than a majority in principal amount of each outstanding series of Junior
Subordinated Debentures affected, to enter into an indenture or indentures
supplemental thereto for the purpose of adding any provisions to or changing
in any manner or eliminating any provisions of the Indenture or of modifying
in any manner the rights of holders of the Junior Subordinated Debentures of
any series; provided, that no such supplemental indenture may, without the
consent of the holder of each outstanding Junior Subordinated Debenture so
affected, (i) change the Stated Maturity of any series of Junior Subordinated
Debentures (except as otherwise specified in the applicable Prospectus
Supplement), reduce the principal amount thereof or reduce the rate or extend
the time of payment of interest (except as otherwise specified in the
applicable Prospectus Supplement) thereon or reduce any premium payable upon
the redemption thereof or (ii) reduce the percentage of principal amount of
Junior Subordinated Debentures of any series, the holders of which are
required to consent to any such modification of the Indenture; provided
further that, in the case of Corresponding Junior Subordinated Debentures, so
long as any Related Securities remain outstanding, (a) no such modification
may be made that adversely affects the holders of such Related Securities in
any material respect, no termination of the Indenture may occur and no waiver
of any event of default or compliance with any covenant under the Indenture
may be effective without the prior consent of the holders of at least a
majority of the aggregate Liquidation Amount of all outstanding Related
Securities and (b) no modification may be made to certain provisions of the
Indenture that would impair the rights of the holders of the Related
Securities without the consent of each holder of Related Securities unless and
until the principal of the Corresponding Junior Subordinated Debentures and
all accrued and unpaid interest thereon have been paid in full and certain
other conditions have been satisfied.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debentures, any supplemental
indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay interest on such series of Junior
Subordinated Debentures, including any Additional Interest (as defined in
the Indenture), when due (subject to the deferral of any interest payment
in the case of an Extension Period);
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(ii) failure to pay any principal or premium, if any, on any series of
Junior Subordinated Debentures when due, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise;
(iii) failure to observe or perform in any material respect any covenant
or warranty of the Corporation contained in the Indenture (other than a
covenant or warranty a default in the performance of which or the breach of
which is elsewhere specifically dealt with) for 90 days after written
notice to the Corporation from the Debenture Trustee or to the Corporation
and the Debenture Trustee by the holders of at least 25% in aggregate
principal amount of such series of outstanding Junior Subordinated
Debentures;
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
(v) any other event provided with regard to a particular series of Junior
Subordinated Debentures.
The holders of a majority in aggregate outstanding principal amount of
Junior Subordinated Debentures of each series affected have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee. The Debenture Trustee or the holders of
not less than 25% in aggregate outstanding principal amount of Junior
Subordinated Debentures of each series affected may declare the principal and
premium, if any, due and payable immediately upon a Debenture Event of Default
(other than a Debenture Event of Default specified in clause (iv) above), and,
in the case of Corresponding Junior Subordinated Debentures, should the
Debenture Trustee or such holders of such Corresponding Junior Subordinated
Debentures fail to make such declaration, the holders of at least 25% in
aggregate Liquidation Amount of the Related Securities shall have such right.
Provided certain conditions are satisfied, the holders of a majority in
aggregate outstanding principal amount of Junior Subordinated Debentures of an
affected series may annul such declaration. In the case of Corresponding
Junior Subordinated Debentures, should the holders of such Corresponding
Junior Subordinated Debentures fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
Related Securities affected shall have such right.
If a Debenture Event of Default specified in clause (iv) with respect to any
series of Junior Subordinated Debentures occurs, the principal amount of all
the Junior Subordinated Debentures of that series shall automatically, and
without any declaration or other action on the part of the Debenture Trustee
or any holder of the Junior Subordinated Debentures, become immediately due
and payable.
The holders of not less than a majority in aggregate outstanding principal
amount of any series of the Junior Subordinated Debentures affected thereby
may, on behalf of the holders of all the Junior Subordinated Debentures of
such series, waive any default, except a default in the payment of principal,
premium, if any, or interest (including Additional Interest) 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
Junior Subordinated Debenture. In the case of Corresponding Junior
Subordinated Debentures, should the holders of such Corresponding Junior
Subordinated Debentures fail to waive such default, the holders of a majority
in aggregate Liquidation Amount of the Related Securities affected shall have
such right. The Corporation is required to file annually with the Debenture
Trustee a certificate as to whether or not the Corporation is in compliance
with all the conditions and covenants applicable to it under the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF SECURITIES
If a Debenture Event of Default with respect to a series of Corresponding
Junior Subordinated Debentures has occurred and is continuing and such event
is attributable to the failure of the Corporation to pay interest or principal
or premium, if any, on such Corresponding Junior Subordinated Debentures on
the date such interest or principal or premium, if any, is due and payable, a
holder of Related Securities may institute a legal proceeding directly against
the Corporation for enforcement of
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payment to such holder of the principal of or premium, if any, or interest on
such Corresponding Junior Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Related Securities of such
holder (a "Direct Action"). The Corporation may not amend the Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of the holders of all of the Securities outstanding. If the right to
bring a Direct Action is removed, the applicable Issuer may become subject to
the reporting obligations under the Exchange Act. The Corporation shall have
the right under the Indenture to set off any payment made to such holder of
Securities by the Corporation in connection with a Direct Action.
The holders of the Securities will not be able to exercise directly any
remedies other than those set forth in the preceding paragraph available to
the holders of the Junior Subordinated Debentures unless there shall have been
an event of default under the Trust Agreement. See "Description of
Securities--Events of Default; Notice".
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge into any other Person (as defined in the Indenture) or convey, transfer
or lease its properties and assets substantially as an entirety to any Person,
and no Person shall consolidate with or merge into the Corporation or convey,
transfer or lease its properties and assets substantially as an entirety to
the Corporation, unless (i) in case the Corporation consolidates with or
merges into another Person or conveys, transfers or leases its properties and
assets substantially as an entirety to any Person, the successor Person is a
corporation, partnership, or trust organized under the laws of the United
States or any state or the District of Columbia and such successor Person
expressly assumes the due and punctual payment of the principal of (and
premium, if any) and interest (including any Additional Interest) on all the
Junior Subordinated Debentures issued under the Indenture and the performance
of every covenant of the Indenture on the part of the Corporation to be
performed or observed; (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; (iii) in the case of Corresponding Junior Subordinated Debentures,
such transaction is permitted under the related Trust Agreement and Guarantee
and does not give rise to any breach or violation of the related Trust
Agreement or Guarantee; and (iv) certain other conditions as prescribed by 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 Corporation that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable, (ii) will become due and payable
at their Stated Maturity within one year or (iii) are to be called for
redemption within one year under arrangements satisfactory to the Debenture
Trustee for the giving of notice of redemption by the Debenture Trustee in the
name and at the expense of the Corporation, and the Corporation deposits or
causes to be deposited with the Debenture Trustee funds, in trust, for the
purpose and in an amount in the currency or currencies in which the Junior
Subordinated Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if
any) and interest (including Additional Interest) to the date of the deposit
or to the Stated Maturity or date fixed for redemption, as the case may be,
then the Indenture will cease to be of further effect (except as to the
Corporation's obligations to pay all other sums due pursuant to the Indenture
and to provide the officers' certificates and opinions of counsel described
therein), and the Corporation will be deemed to have satisfied and discharged
the Indenture.
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CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or
exchangeable into Junior Subordinated Debentures of another series or into
other securities of the Corporation or an Issuer. The specific terms on which
Junior Subordinated Debentures of any series may be so converted or exchanged
will be set forth in the applicable Prospectus Supplement. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holder, or at the option of the Corporation, in which case the amount
of Junior Subordinated Debentures of another series or the number of shares of
other securities to be received by the holders of Junior Subordinated
Debentures would be calculated as of a time and in the manner stated in the
applicable Prospectus Supplement.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any Junior
Subordinated 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 of the Corporation 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 Corporation, the holders of Senior Debt will
first be entitled to receive payment in full of all amounts due or to become
due on such Senior Debt before the holders of Junior Subordinated Debentures
or, in the case of Corresponding Junior Subordinated Debentures, the Property
Trustee, on behalf of the holders of Trust Securities, will be entitled to
receive or retain any payment in respect of the principal of (and premium, if
any) or interest, if any, on the Junior Subordinated Debentures.
In the event of the acceleration of the maturity of any Junior Subordinated
Debentures, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders
of Junior Subordinated Debentures will be entitled to receive or retain any
payment in respect of the principal of (or premium, if any) or interest, if
any, on the Junior Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest in
respect of the Junior Subordinated 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, or if any judicial proceeding shall be
pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person; (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such
Person; (vi) every obligation of such Person for claims in respect of
derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, swaps and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable for, directly or
indirectly, as obligor or otherwise.
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"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not
such claim for post-petition interest is allowed in such proceeding), on Debt
of the Corporation, whether incurred on or prior to the date of the Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated
Debentures or to other Debt which is pari passu with, or subordinated to, the
Junior Subordinated Debentures; provided, however, that Senior Debt shall not
be deemed to include (i) any Debt of the Corporation which when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, as amended, was without recourse to the Corporation;
(ii) any Debt of the Corporation to any of its subsidiaries; (iii) Debt to any
employee of the Corporation; (iv) Debt which by its terms is subordinated to
trade accounts payable or accrued liabilities arising in the ordinary course
of business to the extent that payments made to the holders of such Debt by
the holders of the Junior Subordinated Debentures as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been (absent giving effect to this clause (iv)) as a
result of any obligation of such holders of such Debt to pay amounts over to
the obligees on such trade accounts payable or accrued liabilities arising in
the ordinary course of business as a result of subordination provisions to
which such Debt is subject; and (v) any other debt securities issued pursuant
to the Indenture; provided further, however, that with respect to
Corresponding Junior Subordinated Debentures relating to Preferred Securities,
Senior Debt shall include all Debt of the Corporation to any of its
subsidiaries.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Corporation. The Corporation expects from time to time to
incur substantial additional indebtedness and other obligations constituting
Senior Debt including, without limitation, any additional indebtedness and
other obligations to be incurred by the Corporation upon the consummation of
the Transaction referenced in "Recent Developments; NorAm Merger".
The Indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of Junior Subordinated Debentures, may
be changed prior to such issuance. Any such change would be described in the
applicable Prospectus Supplement.
TRUST EXPENSES
Pursuant to the Agreement as to Expenses and Liabilities (the "Expense
Agreement"), the Corporation, as holder of the Common Securities, will
irrevocably and unconditionally agree with each Issuer that holds Junior
Subordinated Debentures that the Corporation will pay to such Issuer, and
reimburse such Issuer for, the full amount of any costs, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any Securities or other similar interests in the Issuer the amounts
due such holders pursuant to the terms of the Securities or such other similar
interests, as the case may be. Such payment obligation will include any such
costs, expenses or liabilities of the Issuer that are required by applicable
law to be satisfied in connection with a termination of such Issuer.
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 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
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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.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Securities. In that event,
concurrently with the issuance of each Issuer's Securities, such Issuer will
invest the proceeds thereof and the consideration paid by the Corporation for
the Common Securities of such Issuer in such series of Corresponding Junior
Subordinated Debentures issued by the Corporation to such Issuer. Each series
of Corresponding Junior Subordinated Debentures will be in the principal
amount equal to the aggregate stated Liquidation Amount of the Related
Securities and the Common Securities of such Issuer and will rank pari passu
with all other series of Junior Subordinated Debentures. Holders of the
Related Securities for a series of Corresponding Junior Subordinated
Debentures will have the rights in connection with modifications to the
Indenture or upon occurrence of Debenture Events of Default, as described
under "--Modification of Indenture" and "--Debenture Events of Default",
unless provided otherwise in the Prospectus Supplement for such Related
Securities.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures on or after such date as may be specified in
the applicable Prospectus Supplement, in whole at any time or in part from
time to time, or as may be otherwise specified in the applicable Prospectus
Supplement. Unless otherwise specified in the applicable Prospectus
Supplement, the redemption price for any Corresponding Junior Subordinated
Debentures shall be equal to 100% of the principal amount of such
Corresponding Junior Subordinated Debentures then outstanding plus accrued and
unpaid interest to the date fixed for redemption. For so long as the
applicable Issuer is the holder of all the outstanding Corresponding Junior
Subordinated Debentures of such series, the proceeds of any such redemption
will be used by the Issuer to redeem the corresponding Trust Securities in
accordance with their terms. The Corporation may not redeem a series of
Corresponding Junior Subordinated Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debentures of such series for all interest periods terminating on
or prior to the Redemption Date.
DESCRIPTION OF SECURITIES
Each Issuer may issue only one series of Securities, the terms of which will
be set forth in the Prospectus Supplement relating thereto. Pursuant to the
terms of the Trust Agreement for each Issuer, the Issuer Trustees on behalf of
such Issuer will issue the Preferred Securities or the Capital Securities and
the Common Securities. The Securities of a particular issue will represent
undivided beneficial interests in the assets of such 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 such Issuer, as well as other benefits as described in
the corresponding Trust Agreement. This summary of certain provisions of the
Securities and each Trust Agreement, which summarizes the material terms
thereof, does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of each Trust Agreement,
including the definitions therein of certain terms, and the Trust Indenture
Act, to each of which description reference is hereby made. Wherever
particular defined terms of a Trust Agreement (as amended or supplemented from
time to time) are referred to herein or in a Prospectus Supplement, such
defined terms are incorporated herein or therein 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. Each of the Issuers is a legally separate
entity and the assets of one are not available to satisfy the obligations of
any of the others.
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GENERAL
The Securities of an Issuer will rank pari passu, and payments will be made
thereon pro rata, with the Common Securities of that Issuer except as
described under "--Subordination of Common Securities". Legal title to the
Corresponding Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the Related Securities and
Common Securities. Each Guarantee Agreement executed by the Corporation for
the benefit of the holders of an Issuer's Trust Securities (the "Guarantee")
will be a guarantee on a subordinated basis with respect to the related Trust
Securities but will not guarantee payment of Distributions or amounts payable
on redemption or liquidation of such Trust Securities when the related Issuer
does not have funds on hand available to make such payments. See "Description
of Guarantees".
The Securities of each Issuer will have such terms, including distribution,
redemption, voting, liquidation rights and such other preferred, deferral or
other special rights or such restrictions as shall be set forth in the Trust
Agreement of such Issuer. Reference is made to the Prospectus Supplement
relating to the Securities of an Issuer for specific terms, including (i) the
distinctive designation of such Securities; (ii) the number of Securities to
be issued by such Issuer; (iii) the annual distribution rate (or method of
determining such rate) for Securities of such Issuer and the date or dates on
which such distributions shall be payable; (iv) whether distributions on such
Securities shall be cumulative and, in the case of Securities having
cumulative distribution rights, the date or dates, or method of determining
the date or dates, from which distributions on such Securities shall be
cumulative; (v) the amount or amounts that shall be paid out of the assets of
such Issuer to the holders of the Securities of such Issuer upon voluntary or
involuntary dissolution, winding-up or termination of such Issuer; (vi) the
obligation or right, if any, of such Issuer to purchase or redeem such
Securities and the price or prices at which, the period or periods within
which, and the terms and conditions upon which such Securities shall or may be
purchased or redeemed, in whole or in part, pursuant to such obligation or
right; (vii) the rights, if any, to defer distributions on the Securities by
extending the interest payment period on the Corresponding Junior Subordinated
Debentures; and (viii) any other relative rights, preferences, privileges,
limitations or restrictions of such Securities not inconsistent with the Trust
Agreement of such Issuer or applicable law. Any material United States federal
income tax considerations applicable to an offering of Securities will be
described in the Prospectus Supplement relating thereto.
DISTRIBUTIONS
Distributions on the Securities will be cumulative, will accumulate from the
date of original issuance and will be payable on such dates as specified in
the applicable Prospectus Supplement. In the event that any date on which
Distributions are payable on the Securities is not a Business Day (as defined
below), payment of the Distribution 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 to 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 either 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.
Each Issuer's Securities represent undivided beneficial interests in the
assets of the applicable Issuer, and the Distributions on each Trust Security
will be payable at a rate specified in the applicable Prospectus Supplement
for such Securities. The amount of Distributions payable for any period will
be computed on the basis of a 360-day year of twelve 30-day months unless
otherwise specified in the applicable Prospectus Supplement. Distributions to
which holders of Securities are entitled will accumulate additional
Distributions (to the extent permitted by applicable law) at the rate per
annum if
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and as specified in the applicable Prospectus Supplement. The term
"Distributions" as used herein includes any such additional Distributions
unless otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation has the
right under the Indenture, pursuant to which it will issue the Corresponding
Junior Subordinated Debentures, to defer the payment of interest at any time or
from time to time on any series of the Corresponding Junior Subordinated
Debentures for up to such number of consecutive interest payment periods which
will be specified in such Prospectus Supplement relating to such series (each,
an "Extension Period"); provided that no Extension Period may extend beyond the
Stated Maturity of the Corresponding Junior Subordinated Debentures. As a
consequence of any such deferral, Distributions on the Related Securities would
be deferred (but would continue to accumulate additional Distributions thereon
at the rate per annum set forth in the Prospectus Supplement for such
Securities) by the Issuer of such Securities during any such Extension Period.
During such Extension Period, the Corporation 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 Corporation's capital stock or
(ii) make any payment of principal or of interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that, in
either case, rank pari passu with or junior in interest to the Corresponding
Junior Subordinated Debentures (other than (a) dividends or distributions in
capital stock of the Corporation, (b) any declaration of a dividend under a
shareholders' rights plan or in connection with the implementation of a
stockholders' rights plan, the issuance of capital stock of the Corporation
under a stockholders' rights plan or the redemption or repurchase of any such
rights pursuant to a shareholders' rights plan, (c) payments under the
Guarantee with respect to such Securities and (d) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees, related
to the issuance of common stock or rights under a dividend reinvestment and
stock purchase plan or related to the issuance of common stock (or securities
convertible into or exchangeable for common stock) as consideration in an
acquisition transaction that was entered into prior to the commencement of such
Extension Period).
The revenue of each Issuer available for distribution to holders of its
Securities will be limited to payments under the Corresponding Junior
Subordinated Debentures in which the Issuer will invest the proceeds from the
issuance and sale of its Trust Securities and the related Expense Agreement.
See "Description of Junior Subordinated Debentures--Corresponding Junior
Subordinated Debentures". If the Corporation does not make interest payments on
such Corresponding Junior Subordinated Debentures, the Property Trustee will
not have funds available to pay Distributions on the Related Securities. The
payment of Distributions (to the extent the Issuer has funds on hand available
therefor at such time) is guaranteed by the Corporation on the basis set forth
herein under "Description of Guarantees".
Distributions on the Securities will be payable to the holders thereof as
they appear on the register of such Issuer on the relevant record dates, which,
as long as the Securities remain in book-entry form, will be one Business Day
prior to the relevant Distribution Date. Subject to any applicable laws and
regulations and the provisions of the applicable Trust Agreement, each such
payment will be made as described under "Book-Entry Issuance". In the event any
Securities are not in book-entry form, the relevant record date for such
Securities shall be the close of business on the 15th day of the month
immediately preceding the relevant Distribution Date.
REDEMPTION OR DISTRIBUTION
MANDATORY REDEMPTION. Unless otherwise specified in the applicable Prospectus
Supplement, upon the repayment or redemption, in whole or in part, of any
Corresponding Junior Subordinated Debentures, whether at maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption will be applied by the Property Trustee to redeem a
Like Amount
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(as defined below) of the Trust Securities, upon not less than 30 nor more than
60 days' notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption Date")
and, to the extent specified in the Prospectus Supplement, the related amount
of the premium, if any, paid by the Corporation upon the concurrent redemption
of such Corresponding Junior Subordinated Debentures. See "Description of
Junior Subordinated Debentures--Redemption". If less than all of any series of
Corresponding Junior Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption will be
allocated to the redemption pro rata on the Related Securities and the Common
Securities. The amount of premium, if any, paid by the Corporation upon the
redemption of all or any part of any series of any Corresponding Junior
Subordinated Debentures to be repaid or redeemed on a Redemption Date will be
allocated to the redemption pro rata on the Related Securities and the Common
Securities.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount equal
to the principal amount of Corresponding Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Securities pro rata based upon the relative
Liquidation Amounts of such securities, the proceeds of which will be used to
pay the Redemption Price of such Trust Securities and (ii) with respect to a
distribution of Corresponding Junior Subordinated Debentures to holders of any
series of Trust Securities in connection with a dissolution and winding up of
the related Issuer, Corresponding Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Corresponding Junior Subordinated Debentures are
distributed.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) on or after such date as may be specified in
the applicable Prospectus Supplement, in whole at any time or in part from time
to time, or (ii) as may be otherwise specified in the applicable Prospectus
Supplement.
DISTRIBUTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES. At any time,
the Corporation has the right to direct the Property Trustee to dissolve an
Issuer and, after satisfaction of the liabilities of creditors of such Issuer
as provided by applicable law, cause the Corresponding Junior Subordinated
Debentures held by such Issuer to be distributed to the holders of the Related
Securities and Common Securities of such Issuer. If provided in the applicable
Prospectus Supplement and subject to the conditions contained therein, the
Corporation may have the right to extend or shorten the maturity of any series
of Corresponding Junior Subordinated Debentures to be distributed to the
holders of the Related Securities and Common Securities in liquidation of the
Issuer.
Generally, after the liquidation date fixed for any distribution of
Corresponding Junior Subordinated Debentures, (i) such series of Securities
will no longer be deemed to be outstanding and the rights of the holders of
such Securities, as such, will cease, (ii) the Depositary or its nominee, as
the recordholder of such series of Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debentures to be delivered upon such distribution, (iii) any certificates
representing such series of Securities not held by the Depositary or its
nominee will be deemed to represent the Corresponding Junior Subordinated
Debentures having a principal amount equal to the stated Liquidation Amount of
such series of Securities, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on such series of Securities
until such certificates are presented to the Administrative Trustees or their
agent for transfer or reissuance and (iv) the Corporation shall use its best
efforts to have the Corresponding Junior Subordinated Debentures listed on the
national stock exchange or automated quotation system on which the Securities
are then listed or traded, if any.
There can be no assurance as to the market prices for the Securities or the
Corresponding Junior Subordinated Debentures that may be distributed if a
dissolution and liquidation of an Issuer were to
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occur. Accordingly, the Securities that an investor may purchase, or the
Corresponding Junior Subordinated Debentures that the investor may receive on
dissolution and winding up of an Issuer, may trade at a discount to the price
that the investor paid to purchase the Securities offered hereby.
REDEMPTION PROCEDURES
Securities redeemed on each Redemption Date shall be redeemed at the
Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the related Issuer has funds on hand
available for the payment of such Redemption Price. See also "--Subordination
of Common Securities".
If a Property Trustee gives a notice of redemption in respect of any
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are available, the Property Trustee will, so long as such
Securities are in book-entry form, deposit irrevocably with the Depositary
funds sufficient to pay the applicable Redemption Price, and an Administrative
Trustee or the Property Trustee will give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the holders of such
Securities. See "Book-Entry Issuance". If such Securities are no longer in
book-entry form, the Property Trustee, to the extent funds are available, will
irrevocably deposit with the paying agent for such 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
Securities. 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 on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of the holders of such Trust Securities so called for redemption will
cease, except the right of the holders of such Trust Securities to receive the
Redemption Price and any Distribution payable on or prior to the Redemption
Date, but without interest thereon, and such Trust Securities will cease to be
outstanding. In the event that any date fixed for redemption of such Trust
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 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 Trust Securities called for
redemption is improperly withheld or refused and not paid either by the Issuer
or by the Corporation pursuant to the Guarantee as described under
"Description of Guarantees", Distributions on such Trust Securities will
continue to accumulate at the then-applicable rate, from the Redemption Date
originally established by the Issuer for such Trust Securities to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the
Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Securities by tender, in the open
market or by private agreement.
Payment of the Redemption Price on the Trust Securities shall be made to the
applicable recordholders thereof as they appear on the register for such Trust
Securities on the relevant record date, which shall be one Business Day prior
to the Redemption Date; provided, however, that in the event that any Trust
Securities are not in book-entry form, the relevant record date for such Trust
Securities shall be the close of business on the date 15 days prior to the
relevant Redemption Date, unless otherwise specified in the applicable
Prospectus Supplement.
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If less than all of the Securities and Common Securities issued by an Issuer
are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount
of such Securities and Common Securities to be redeemed shall be allocated on
a pro rata basis (based on Liquidation Amounts) among the Securities and the
Common Securities. The particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Securities not previously called for redemption, by lot
or by such other method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof for Preferred
Securities and equal to $1,000 or an integral multiple of $1,000 in excess
thereof for Capital Securities, unless otherwise specified in the applicable
Prospectus Supplement) of the Liquidation Amount of Securities of a
denomination larger than $25 for Preferred Securities and $1,000 for Capital
Securities. The Property Trustee shall promptly notify the trust registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of each Trust Agreement, 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 aggregate Liquidation Amount of Securities which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Securities and Common Securities, as applicable, shall be made pro rata based
on the Liquidation Amount of such Securities and Common Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture Event
of Default shall have occurred and be continuing, no payment of any
Distribution on, or Redemption Price of, any of the Issuer's Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
Issuer's outstanding 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 Issuer's outstanding Securities
then called for redemption, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or the Redemption Price
of, the Issuer's Securities then due and payable.
In the case of any event of default under the applicable Trust Agreement
resulting from a Debenture Event of Default, the holder of such Issuer's
Common Securities will be deemed to have waived any right to act with respect
to any such event of default under the applicable Trust Agreement until the
effect of all such events of default with respect to such Securities have been
cured, waived or otherwise eliminated. Until any such event of default under
the applicable Trust Agreement with respect to the Securities has been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of such Securities and not on behalf of the holder of
the Issuer's Common Securities, and only the holders of such Securities will
have the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically dissolve
upon expiration of its term, and may dissolve earlier on the first to occur
of: (i) certain events of bankruptcy, dissolution or liquidation of the holder
of the Common Securities; (ii) the written direction to the Property Trustee
from the holder of Common Securities to dissolve such Issuer and, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, to distribute Corresponding Junior Subordinated
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Debentures to the holders of the Issuer's Securities in exchange for such
Securities; (iii) the redemption of all of the Issuer's Securities as
described under "--Redemption or Distribution--Mandatory Redemption"; and (iv)
the entry of an order for the dissolution of the Issuer by a court of
competent jurisdiction.
If an early dissolution occurs as described in clause (i), (ii) or (iv)
above, or upon the expiration of its term, the Issuer shall be wound up by the
Property Trustee as expeditiously as the Property Trustee determines to be
possible by distributing, after satisfaction of liabilities to creditors of
such Issuer as provided by applicable law, to the holders of such Trust
Securities a Like Amount of the Corresponding Junior Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, or if early dissolution occurs as described in clause (iii) above,
in which event such 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 such Issuer as provided by applicable law, an
amount equal to, in the case of holders of Securities, the aggregate of the
Liquidation Amount plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because such Issuer has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by such Issuer on its
Securities shall be paid on a pro rata basis. The holder(s) of such Issuer's
Common Securities will be entitled to receive Liquidation Distributions upon
any such liquidation pro rata with the holders of such Issuer's Securities,
except that, if a Debenture Event of Default relating to the payment of
principal, premium, if any, or interest on Corresponding Junior Subordinated
Debentures has occurred and is continuing, the Securities shall have a
priority over the Common Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under each
Trust Agreement with respect to the Securities issued thereunder (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 (see "Description of
Junior Subordinated Debentures--Debenture Events of Default");
(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;
(iii) default by the Issuer in the payment of any Redemption Price of any
Trust Security when it becomes due and payable;
(iv) default in the performance or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such 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 90 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees and the Corporation by the holders of at least 25% in
aggregate Liquidation Amount of the outstanding Securities of the
applicable Issuer, 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 such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Issuer.
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer (as defined in the applicable Trust
Agreement) of the Property Trustee, the Property Trustee shall transmit notice
of such Event of Default to the holders of such Issuer's Securities, the
Administrative Trustees and the Corporation, as Depositor, unless such Event
of Default
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shall have been cured or waived. If an Event of Default has occurred and is
continuing, the Property Trustee shall enforce the applicable Trust Agreement
for the benefit of the holders of the Trust Securities. The Corporation, 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 each Trust
Agreement.
If an Event of Default resulting from any Debenture Event of Default occurs
and is continuing, then, pursuant to the applicable Trust Agreement, holders
of a majority in aggregate Liquidation Amount of Securities will have the
right to direct the exercise of any trust or power conferred upon the related
Property Trustee under the related Trust Agreement. Upon a Debenture Event of
Default specified in clause (i) or clause (ii) in the list of Debenture Events
of Default, a holder of Securities may institute a legal proceeding directly
against the Corporation, without first instituting a legal proceeding against
the Property Trustee or any other person or entity, for enforcement of payment
to such holder of principal of or interest on the Corresponding Junior
Subordinated Debentures having a principal amount equal to the aggregate
stated Liquidation Amount of the Securities of such holder. See "Relationship
Among the Securities, the Corresponding Junior Subordinated Debentures, the
Expense Agreement and the Guarantees".
If a Debenture Event of Default has occurred and is continuing, the
Securities shall have a preference over the Common Securities as described
above. See "--Subordination of Common Securities" and "--Liquidation
Distribution Upon Termination". The existence of an Event of Default, other
than an Event of Default described in clause (i) above, does not entitle the
holders of Securities to accelerate the maturity thereof. Following an Event
of Default as described in clause (i) above, the holders of at least 25% in
aggregate Liquidation Amount of the outstanding Securities of the applicable
Issuer will have the right to declare the principal of all of the
Corresponding Junior Subordinated Debentures to be immediately due and payable
as set forth in the Indenture.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee or the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Securities.
In no event will the holders of the Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights
are vested exclusively in the Corporation 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 the successor trustee in accordance with the provisions of the applicable
Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or from time to time, 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 Corporation, as the holder of
the Common Securities, and the Administrative Trustees shall have 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 a
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 applicable Trust Agreement. In
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
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MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such
Trustee under each Trust Agreement, provided such Person shall be otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An 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. An Issuer may, at the request of the holder of Common
Securities, with the consent of the Administrative Trustees and without the
consent of the holders of the Securities, the Property Trustee or the Delaware
Trustee, merge with or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any state; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of such Issuer with respect to the Securities or (b) substitutes
for the Securities other securities having substantially the same material
terms as the Securities (the "Successor Securities") so long as the Successor
Securities have the same priority as the Securities with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
the Corporation expressly appoints a trustee of such successor entity
possessing the same powers and duties as the Property Trustee as the holder of
the Corresponding Junior Subordinated Debentures, (iii) the Successor
Securities are listed or traded, or any Successor Securities will be listed
upon notification of issuance, on any national securities exchange or other
organization on which the Securities are then listed or traded, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization which
gives ratings on the Securities, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
material rights, preferences and privileges of the holders of the 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 Property Trustee has received an opinion
from 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 material rights, preferences and
privileges of the holders of the 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 of 1940, as amended
(the "Investment Company Act"), and (viii) the Corporation or any permitted
transferee owns all of the Common Securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, an Issuer shall not, except with the consent of holders of 100%
in Liquidation Amount of the Securities, consolidate, amalgamate, merge with
or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Issuer or the successor entity to be classified as an
association taxable as a corporation or as other than a grantor trust for
United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Securities will have no voting rights.
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Each Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of
the holders of the Securities, (i) to cure any ambiguity, to correct or
supplement any provisions in such Trust Agreement that may be inconsistent
with any other provision or to make any other provisions with respect to
matters or questions arising under such Trust Agreement which shall not be
inconsistent with the other provisions of such Trust Agreement or (ii) to
modify, eliminate or add to any provisions of such Trust Agreement to such
extent as shall be necessary to ensure that the Issuer will not be classified
for United States federal income tax purposes as an association taxable as a
corporation or as other than a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Issuer will not be required
to register as an "investment company" under the Investment Company Act;
provided, however, that in the case of either clause (i) or clause (ii), such
action shall not adversely affect in any material respect the interests of any
holder of Securities and any amendments of such Trust Agreement shall become
effective when notice thereof is given to the holders of Trust Securities.
Each Trust Agreement may be amended by the Administrative Trustees and the
Corporation with (a) the consent of holders representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities
and (b) 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 or cause the Issuer to be an association taxable as a
corporation for United States federal income tax purposes or the Issuer's
exemption from status as an "investment company" under the Investment Company
Act; provided, that without the consent of each affected holder of Trust
Securities, such Trust Agreement may not be amended to (i) change the amount
or timing of any Distribution on the Trust Securities or otherwise adversely
affect the amount of any Distribution required to be made in respect of the
Trust Securities as of a specified date or (ii) restrict the right of a holder
of Trust Securities to institute suit for the enforcement of any such payment
on or after such date; and provided further, that the consent requirement for
actions set forth in clauses (i) and (ii) above may not be amended without the
unanimous consent of the holders of Trust Securities.
So long as any Corresponding Junior Subordinated Debentures are held by the
Property Trustee, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the
Debenture Trustee or executing any trust power conferred on the Property
Trustee with respect to such Corresponding Junior Subordinated Debentures,
(ii) waive any past default that is waivable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Corresponding Junior Subordinated Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
such Corresponding 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 Amount of all outstanding Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Corresponding Junior Subordinated Debentures
affected thereby, no such consent shall be given by the Property Trustee
without the prior consent of each holder of the Related Securities. The Issuer
Trustees shall not revoke any action previously authorized or approved by a
vote of the holders of the Securities except by subsequent vote of the holders
of the Securities. The Property Trustee shall notify each holder of Securities
of any notice of default with respect to the Corresponding Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of the holders of
the 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 not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action and such action would not cause the Issuer to be classified as other
than a grantor trust for United States federal income tax purposes.
Any required approval of holders of Securities may be given at a meeting of
holders of Securities convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of
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any meeting at which holders of 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 Securities in the manner set forth in
each Trust Agreement.
No vote or consent of the holders of Securities will be required for an
Issuer to redeem and cancel its Securities in accordance with the applicable
Trust Agreement.
Notwithstanding that holders of Securities are entitled to vote or consent
under any of the circumstances described above, any of the Securities that are
owned by the Corporation, the Issuer Trustees or any affiliate of the
Corporation or any Issuer Trustees shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more Global Securities that will be deposited with, or on behalf of,
the Depositary identified in the Prospectus Supplement relating to such
series. Global Securities may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole
or in part for the individual Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series of
Securities will be described in the Prospectus Supplement relating to such
series. The Corporation anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security and the deposit of such Global
Security with or on behalf of the Depositary, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective aggregate Liquidation Amounts of the
individual Securities represented by such Global Securities to the accounts of
Participants. Such accounts shall be designated by the dealers, underwriters
or agents with respect to such Securities or by the Corporation if such
Securities are offered and sold directly by the Corporation. Ownership of
beneficial interests in a Global Security will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of Participants) and the
records of Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the transfer of beneficial interests in a
Global Security.
So long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Securities
represented by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in a Global Security
will not be entitled to have any of the individual Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of any such Securities of
such series in definitive form and will not be considered the owners or
holders thereof under the Indenture.
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Payments of principal of (and premium, if any) and interest on individual
Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Global Security representing
such Securities. None of the Corporation, the Property Trustee, any Paying
Agent or the Securities Registrar for such Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security representing such Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Securities or
its nominee, upon receipt of any payment of Liquidation Amount, Redemption
Price, premium or Distributions in respect of a permanent Global Security
representing any of such Securities, immediately will credit Participants'
accounts with payments in amounts proportionate to their respective beneficial
interest in the aggregate Liquidation Amount of such Global Security for such
Securities as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants to owners of beneficial
interests in such Global Security held through such Participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or
registered in "street name". Such payments will be the responsibility of such
Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not
appointed by the Issuer within 90 days, the Issuer will issue individual
Securities of such series in exchange for the Global Security representing
such series of Securities. In addition, the Issuer may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Securities, determine not to have any Securities
of such series represented by one or more Global Securities and, in such
event, will issue individual Securities of such series in exchange for the
Global Security or Securities representing such series of Securities. Further,
if the Issuer so specifies with respect to the Securities of a series, an
owner of a beneficial interest in a Global Security representing Securities of
such series may, on terms acceptable to the Issuer, the Property Trustee and
the Depositary for such Global Security, receive individual Securities of such
series in exchange for such beneficial interests, subject to any limitations
described in the Prospectus Supplement relating to such Securities. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Securities of the series
represented by such Global Security equal in principal amount to such
beneficial interest and to have such Securities registered in its name.
Individual Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Issuer, of $25 and integral
multiples thereof if such Securities are Preferred Securities or $1,000 and
integral multiples thereof if such Securities are Capital Securities.
PAYMENT AND PAYING AGENT
Payments in respect of the Securities shall be made to the Depositary, which
shall credit the relevant accounts at the Depositary on the applicable
Distribution Dates or, if any Issuer's Securities are not held by the
Depositary, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the Register. Unless
otherwise specified in the applicable Prospectus Supplement, 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 Corporation. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Corporation. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall
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appoint a successor (which shall be a bank or trust company acceptable to the
Property Trustee and the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Securities.
Registration of transfers of Securities will be effected without charge by
or on behalf of each Issuer, but upon payment of any tax or other governmental
charges that may be imposed in connection with any transfer or exchange. The
registrar will not be required to register the transfer of any Securities that
have been called for redemption. The Administrative Trustees will not be
required to issue, transfer or exchange any Securities that have been called
for redemption. In addition, in the event of any redemption, neither the
Corporation nor the Debenture Trustee shall be required to (i) issue, transfer
or exchange Junior Subordinated Debentures of any series during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of Junior Subordinated Debentures of that series and
ending at the close of business on the day of such mailing of notice of
redemption or (ii) transfer or exchange any Junior Subordinated Debentures so
selected for redemption, except, in the case of any Junior Subordinated
Debentures to be redeemed in part, any portion thereof not to be redeemed.
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 each 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 applicable Trust Agreement at the request of any holder of
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 or construe ambiguous provisions
in the applicable Trust Agreement or is unsure of the application of any
provision of the applicable Trust Agreement, and the matter is not one on
which holders of Securities are entitled under such Trust Agreement to vote,
then the Property Trustee shall take such action as is directed by the
Corporation and, if not so directed, shall take such action as it deems
advisable and in the best interests of the holders of the Trust 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 Issuers in such a way so that (i) no Issuer will
be deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes and (ii) the Corresponding Junior Subordinated Debentures will be
treated as indebtedness of the Corporation for United States federal income
tax purposes. In this connection, the Corporation and the Administrative
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of each Issuer or each Trust Agreement, that the
Corporation 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 Related
Securities.
Holders of the Securities have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
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BOOK-ENTRY ISSUANCE
The Depository Trust Company ("DTC") will act as securities depositary for
all of the Securities and the Junior Subordinated Debentures, unless otherwise
provided in the applicable Prospectus Supplement. The Securities and the
Junior Subordinated Debentures 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 Securities of each
Issuer and the Junior Subordinated Debentures, representing in the aggregate
the total number of such Issuer's Securities or aggregate principal balance of
Junior Subordinated Debentures, respectively, 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 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. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., 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 Securities or Junior Subordinated Debentures within the DTC
system must be made by or through Direct Participants, which will receive a
credit for the Securities or Junior Subordinated Debentures on DTC's records.
The ownership interest of each actual purchaser of each Preferred Security and
each Junior Subordinated Debenture ("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 Securities or Junior Subordinated Debentures. Transfers of ownership
interests in the Securities or Junior Subordinated Debentures 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 Securities or Junior Subordinated
Debentures, except in the event that use of the book-entry system for the
Securities of such Issuer or Junior Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Securities or
Junior Subordinated Debentures; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Securities or Junior Subordinated
Debentures 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 and the voting
rights of Direct Participants, Indirect Participants and 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.
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Redemption notices will be sent to Cede & Co. as the registered holder of
the Securities or Junior Subordinated Debentures. If less than all of an
Issuer's Securities or the Junior Subordinated Debentures 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 Securities or the Junior Subordinated
Debentures is limited to the holders of record of the Securities or Junior
Subordinated Debentures, in those instances in which a vote is required,
neither DTC nor Cede & Co. will itself consent or vote with respect to
Securities or Junior Subordinated Debentures. Under its usual procedures, DTC
would mail an omnibus proxy (the "Omnibus Proxy") to the relevant Trustee 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 Securities or Junior Subordinated Debentures are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Securities or the Junior Subordinated
Debentures will be made by the relevant Trustee 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 relevant Trustee, the Issuer thereof or the
Corporation, 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 relevant Trustee. Disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct Participants
and Indirect Participants.
DTC may discontinue providing its services as a securities depositary with
respect to any of the Securities or the Junior Subordinated Debentures at any
time by giving reasonable notice to the relevant Trustee and the Corporation.
In the event that a successor securities depositary is not obtained,
definitive Preferred Security or Junior Subordinated Debenture certificates
representing such Securities or Junior Subordinated Debentures are required to
be printed and delivered. The Corporation, 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 liquidation preference of Securities or in aggregate principal
amount of Junior Subordinated Debentures may determine to discontinue the
system of book-entry transfers through DTC. In any such event, definitive
certificates for such Securities or Junior Subordinated Debentures 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 Issuers and the Corporation believe to
be accurate, but the Issuers and the Corporation assume no responsibility for
the accuracy thereof. Neither the Issuers nor the Corporation 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.
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DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation concurrently
with the issuance by each Issuer of its Securities for the benefit of the
holders from time to time of such Securities and the Common Securities. The
Bank of New York will act as indenture trustee ("Guarantee Trustee") under
each Guarantee for the purposes of compliance with the Trust Indenture Act and
each Guarantee will be qualified as an indenture under the Trust Indenture
Act. This summary of certain provisions of the Guarantees, which summarizes
the material terms thereof, does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of each
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act, to each of which description reference is hereby made. The form
of each Guarantee has been filed as an exhibit to the Registration Statement
of which this Prospectus forms a part. Reference in this summary to Securities
means that Issuer's Securities to which a Guarantee relates. The Guarantee
Trustee will hold each Guarantee for the benefit of the holders of the related
Issuer's Securities and Common Securities.
GENERAL
The Corporation will irrevocably and unconditionally 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 Trust Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that such Issuer
may have or assert other than the defense of payment. The following payments
with respect to the Securities, to the extent not paid or made by or on behalf
of the related Issuer (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
such Trust Securities, to the extent that such Issuer has funds on hand
available therefor at such time; (ii) the Redemption Price with respect to any
Securities called for redemption, to the extent that such Issuer has funds on
hand available therefor at such time; or (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of such Issuer (unless the
Corresponding Junior Subordinated Debentures are distributed to holders of
such Securities), the lesser of (a) the Liquidation Distribution and (b) the
amount of assets of such Issuer remaining available for distribution to
holders of Trust Securities in liquidation of such Issuer after satisfaction
of liabilities to creditors of such Issuer as required by applicable law. The
Corporation's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Corporation to the holders of
the applicable Trust Securities or by causing the Issuer to pay such amounts
to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Securities, but will apply only to
the extent that such related Issuer has funds sufficient to make such payments
and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Junior Subordinated Debentures held by the Issuer, the Issuer will not be able
to pay Distributions on the Securities and will not have funds legally
available therefor. Each Guarantee will rank subordinate and junior in right
of payment to all Senior Debt of the Corporation. See "--Status of the
Guarantees". Except as otherwise provided in the applicable Prospectus
Supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any other existing indenture or any other indenture that
the Corporation may enter into in the future or otherwise. See the applicable
Prospectus Supplement relating to any offering of Securities.
The Corporation has, through the applicable Guarantee, the applicable Trust
Agreement, the applicable series of Corresponding Junior Subordinated
Debentures, the Indenture and the applicable Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the
Issuer's obligations under the Securities. No single document standing alone
or operating in
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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 Securities. See "Relationship Among the
Securities, the Corresponding Junior Subordinated Debentures, the Expense
Agreement and the Guarantees".
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt of
the Corporation in the same manner as Junior Subordinated Debentures.
Each Guarantee will rank pari passu with all other Guarantees issued by the
Corporation. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the holders of the
related Securities. Each 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 Securities of the Corresponding Junior
Subordinated Debentures. None of the Guarantees places a limitation on the
amount of additional Senior Debt that may be incurred by the Corporation. The
Corporation expects from time to time to incur substantial additional
indebtedness and other obligations constituting Senior Debt including without
limitation such additional indebtedness and other obligations to be incurred
by the Corporation upon the consummation of the Transaction. See "Recent
Developments; NorAm Merger".
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Securities (in which case no vote will be
required), no Guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of
such outstanding Securities. The manner of obtaining any such approval will be
as set forth under "Description of Securities--Voting Rights; Amendment of
Each Trust Agreement". All guarantees and agreements contained in each
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
holders of the related Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
related 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 such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under such Guarantee without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee
or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any 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. Subject to this provision, the Guarantee Trustee is under
no obligation to exercise any of the powers vested in it by any Guarantee at
the request of any holder of any Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of all Related Securities, upon full
payment of the amounts payable upon liquidation of the related Issuer or upon
distribution of Corresponding Junior Subordinated Debentures to the holders of
the Related Securities. Each Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of the Related
Securities must restore payment of any sums paid under such Securities or such
Guarantee.
GOVERNING LAW
Each 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, the Corporation, as holder of the Common
Securities, will irrevocably and unconditionally agree with each Issuer that
holds Junior Subordinated Debentures that the Corporation will pay to such
Issuer, and reimburse such Issuer for, the full amount of any costs, expenses
or liabilities of the Issuer, other than obligations of the Issuer to pay to
the holders of any Securities or other similar interests in the Issuer the
amounts due such holders pursuant to the terms of the Securities or such other
similar interests, as the case may be. Such payment obligation will include
any such costs, expenses or liabilities of the Issuer that are required by
applicable law to be satisfied in connection with a termination of such
Issuer.
RELATIONSHIP AMONG THE SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES,
THE EXPENSE AGREEMENT AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Securities (to the
extent the Issuer has funds available for the payment of such Distributions)
are irrevocably guaranteed by the Corporation as and to the extent set forth
under "Description of Guarantees". Taken together, the Corporation's
obligations under each series of Corresponding Junior Subordinated Debentures,
the Indenture, the related Trust Agreement, the related Expense Agreement and
the related Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the 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 Related Securities. If and to the extent that the
Corporation does not make payments on any series of Corresponding Junior
Subordinated Debentures, such Issuer will not pay Distributions or other
amounts due on the Securities. The Guarantees do not cover payment of
Distributions when the related Issuer does not have sufficient funds to pay
such Distributions. In such
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event, the remedy of a holder of a series of Securities is to institute a
legal proceeding directly against the Corporation pursuant to the terms of the
Indenture for enforcement of payment of amounts equal to such Distributions to
such holder. The obligations of the Corporation under each Guarantee are
subordinate and junior in right of payment to all Senior Debt of the
Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on each
series of Corresponding Junior Subordinated Debentures, such payments will be
sufficient to cover Distributions and other payments due on the Related
Securities, primarily because (i) the aggregate principal amount of each
series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate stated Liquidation Amount of the Related Securities and
related Common Securities; (ii) the interest rate and interest and other
payment dates on each series of Corresponding Junior Subordinated Debentures
will match the Distribution rate and Distribution and other payment dates for
the Related Securities; (iii) the Corporation shall pay for all and any costs,
expenses and liabilities of such Issuer except the Issuer's obligations to
holders of its Securities under such Securities; and (iv) each Trust Agreement
further provides that the Issuer will not engage in any activity that is not
consistent with the limited purposes of such Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set off any payment it is otherwise required to make
thereunder with and to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment under the related
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF SECURITIES
A holder of any Preferred Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the related Guarantee
without first instituting a legal proceeding against the Guarantee Trustee,
the related Issuer or any other person or entity.
A default or event of default under any Senior Debt of the Corporation would
not constitute a default or Event of Default under the Indenture. However, in
the event of payment defaults under, or acceleration of, Senior Debt of the
Corporation, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Corresponding 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
series of Corresponding Junior Subordinated Debentures would constitute an
Event of Default under the Indenture.
LIMITED PURPOSE OF ISSUERS
Each Issuer's Securities evidence an undivided beneficial interest in the
assets of such Issuer, and each Issuer exists for the sole purpose of issuing
its Securities and Common Securities and investing the proceeds thereof in
Corresponding Junior Subordinated Debentures. A principal difference between
the rights of a holder of a Preferred Security and a holder of a Corresponding
Junior Subordinated Debenture is that a holder of a Corresponding Junior
Subordinated Debenture is entitled to receive from the Corporation the
principal amount of and interest accrued on Corresponding Junior Subordinated
Debentures held, while a holder of Securities is entitled to receive
Distributions from such Issuer (or from the Corporation under the applicable
Guarantee) if and to the extent such Issuer has funds available for the
payment of such Distributions. However, taken together, the Corporation's
obligations under each series of Corresponding Junior Subordinated Debentures,
the Indenture, the related Trust Agreement, the related Expense Agreement and
the related Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Related Securities. See "--Full and Unconditional Guarantee".
35
<PAGE>
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer involving the liquidation of the Corresponding Junior Subordinated
Debentures, the holders of the Related Securities will be entitled to receive,
out of the assets held by such Issuer, the Liquidation Distribution in cash.
See "Description of Securities--Liquidation Distribution Upon Termination".
Upon any voluntary or involuntary liquidation or bankruptcy of the
Corporation, the Property Trustee, as holder of the Corresponding Junior
Subordinated Debentures, would be a subordinated creditor of the Corporation,
subordinated in right of payment to all Senior Debt as set forth in the
Indenture, but entitled to receive payment in full of principal and interest,
before any stockholders of the Corporation receive payments or distributions.
Since the Corporation is the guarantor under each Guarantee and has agreed to
pay for all costs, expenses and liabilities of each Issuer (other than the
Issuer's obligations to the holders of its Securities), the positions of a
holder of such Securities and a holder of such Corresponding Junior
Subordinated Debentures relative to other creditors and to stockholders of the
Corporation in the event of liquidation or bankruptcy of the Corporation are
expected to be substantially the same.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Securities may be sold in a public
offering to or through underwriters or dealers designated from time to time or
may be sold, from time to time, to investors directly or through agents. The
Corporation and each Issuer may sell its Junior Subordinated Debentures or
Securities as soon as practicable after effectiveness of the Registration
Statement of which this Prospectus forms a part or from time to time
thereafter. The names of any underwriters, dealers or agents involved in the
sale of the Junior Subordinated Debentures or Securities in respect of which
this Prospectus is delivered, the amount or number of Junior Subordinated
Debentures and Securities to be purchased by any such underwriters and any
applicable commissions or discounts will be set forth in the applicable
Prospectus Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or Securities
at a fixed price or prices, which may be changed, or from time to time at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. In connection with the sale
of Securities, underwriters may be deemed to have received compensation from
the Corporation and/or the applicable Issuer in the form of underwriting
discounts or commissions and may also receive commissions for purchasers of
Junior Subordinated Debentures or Securities for whom they may act as agent.
Underwriters may sell Junior Subordinated Debentures or Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
(which may be changed from time to time) from the purchasers for whom they may
act as agent.
Any underwriting compensation paid by the Corporation and/or the applicable
Issuer to underwriters or agents in connection with the offering of Junior
Subordinated Debentures or Securities, and any discounts, concessions or
commissions allowed by such underwriters to participating dealers, will be
described in an accompanying Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of Junior Subordinated Debentures or
Securities may be deemed to be underwriters under the Securities Act, and any
discounts and commissions received by them and any profit realized by them on
resale of such Junior Subordinated Debentures or Securities may be deemed to
be underwriting discounts and commissions thereunder. Underwriters, dealers
and agents may be entitled, under an agreement with the Corporation and the
applicable Issuer, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act, and to
reimbursement by the Corporation for certain expenses.
If so indicated in an applicable Prospectus Supplement, the Corporation will
authorize dealers acting as the Corporation's agents to solicit offers by
certain institutions to purchase Junior Subordinated Debentures or Securities
from the Corporation at the public offering price set forth in
36
<PAGE>
such Prospectus Supplement pursuant to delayed delivery contracts
("Contracts") providing for payment and delivery on the date or dates stated
in such Prospectus Supplement. Each Contract will be for an amount not less
than, and the aggregate principal amount or Liquidation Amount, as the case
may be, of Junior Subordinated Debentures or Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in
such Prospectus Supplement. Institutions with whom Contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of the
Corporation. Contracts will not be subject to any conditions except (i) the
purchase by an institution of the Junior Subordinated Debentures or Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject and (ii) if the Junior Subordinated Debentures or Securities are being
sold to underwriters, the Corporation shall have sold to such underwriters the
total principal amount or Liquidation Amount, as the case may be, of the
Junior Subordinated Debentures or Securities less the principal amount or
Liquidation Amount thereof covered by Contracts. Agents and underwriters will
have no responsibility in respect of the delivery or performance of Contracts.
In connection with the offering of the Securities of any Issuer, such Issuer
may grant to the underwriters an option to purchase additional Securities to
cover over-allotments, if any, at the initial public offering price (with an
additional underwriting commission), as may be set forth in the accompanying
Prospectus Supplement. If such Issuer grants any over-allotment option, the
terms of such over-allotment option will be set forth in the Prospectus
Supplement for such Securities.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, the Corporation, the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Securities will be new issues of
securities and will have no established trading market. Any underwriters to
whom Junior Subordinated Debentures or Securities are sold for public offering
and sale may make a market in such Junior Subordinated Debentures or
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. Such Junior
Subordinated Debentures or Securities may or may not be listed on a national
securities exchange or the Nasdaq National Market. No assurance can be given
as to the liquidity of or the existence of trading markets for any Junior
Subordinated Debentures or Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the validity of the Securities, the
enforceability of the Trust Agreements and the formation of the Issuers will
be passed upon by Richards, Layton & Finger, Wilmington, Delaware, special
Delaware counsel to the Corporation and the Issuers. Unless otherwise
indicated in the applicable Prospectus Supplement, the validity of the
Guarantees and the Junior Subordinated Debentures will be passed upon for the
Corporation by Baker & Botts, L.L.P., Houston, Texas. Certain legal matters
will be passed upon for the Corporation by Hugh Rice Kelly, Esq., Executive
Vice President, General Counsel and Corporate Secretary of the Corporation,
and for the Underwriters by Dewey Ballantine, New York, New York. Certain
matters relating to United States federal income tax considerations will be
passed upon for the Corporation by Baker & Botts, L.L.P.
EXPERTS
The financial statements of the Corporation appearing in the Corporation's
Annual Report (Form 10-K) for the year ended December 31, 1995, have been
audited by Deloitte & Touche LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
37
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT AND PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPO-
RATION SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors.............................................................. S-4
HL&P Capital Trust [ ]................................................... S-9
Houston Lighting & Power Company Selected Financial Information of the
Corporation.............................................................. S-11
Ratio of Earnings to Fixed Charges........................................ S-12
Use of Proceeds........................................................... S-12
Capitalization............................................................ S-13
Accounting Treatment...................................................... S-13
Certain Terms of Series Capital Securities.............................. S-14
Certain Terms of Series Subordinated Debentures......................... S-20
Certain Terms of Series Guarantee....................................... S-24
Certain Federal Income Tax Consequences................................... S-25
ERISA Considerations...................................................... S-28
Underwriting.............................................................. S-30
Validity of Securities.................................................... S-31
PROSPECTUS
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
Houston Lighting & Power Company.......................................... 4
Recent Developments; NorAm Merger......................................... 4
The Issuers............................................................... 4
Use of Proceeds........................................................... 5
Description of Junior Subordinated Debentures............................. 6
Description of Securities................................................. 17
Book-Entry Issuance....................................................... 30
Description of Guarantees................................................. 32
Relationship Among the Securities, the Corresponding Junior Subordinated
Debentures, the Expense Agreement and the Guarantees..................... 34
Plan of Distribution...................................................... 36
Validity of Securities.................................................... 37
Experts................................................................... 37
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HL&P CAPITAL TRUST [ ]
% CAPITAL SECURITIES, SERIES
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
HOUSTON LIGHTING & POWER COMPANY
-----------
PROSPECTUS
-----------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT AND PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPO-
RATION SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors.............................................................. S-5
HL&P Capital Trust [ ]................................................... S-10
Houston Lighting & Power Company Selected Financial Information of the
Corporation.............................................................. S-12
Ratio of Earnings to Fixed Charges........................................ S-13
Use of Proceeds........................................................... S-13
Capitalization............................................................ S-14
Accounting Treatment...................................................... S-14
Certain Terms of Series Preferred Securities............................ S-15
Certain Terms of Series Subordinated Debentures......................... S-19
Certain Terms of Series Guarantee....................................... S-23
Certain Federal Income Tax Consequences................................... S-24
Underwriting.............................................................. S-28
Validity of Securities.................................................... S-29
PROSPECTUS
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
Houston Lighting & Power Company.......................................... 4
Recent Developments; NorAm Merger......................................... 4
The Issuers............................................................... 4
Use of Proceeds........................................................... 5
Description of Junior Subordinated Debentures............................. 6
Description of Securities................................................. 17
Book-Entry Issuance....................................................... 30
Description of Guarantees................................................. 32
Relationship Among the Securities, the Corresponding Junior Subordinated
Debentures, the Expense Agreement and the Guarantees..................... 34
Plan of Distribution...................................................... 36
Validity of Securities.................................................... 37
Experts................................................................... 37
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HL&P CAPITAL TRUST [ ]
% TRUST PREFERRED
SECURITIES, SERIES
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
HOUSTON LIGHTING & POWER COMPANY
-----------
PROSPECTUS
-----------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses payable by the
Corporation in connection with the offering described in this Registration
Statement.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee................... $106,061
Blue Sky fees and expenses...................................... 20,000
Trustees' fees and expenses..................................... 30,000
Attorney's fees and expenses.................................... 130,000
Independent Auditor's fees and expenses......................... 50,000
Printing and engraving expenses................................. 50,000
Rating agency fees.............................................. 89,000
Miscellaneous expenses.......................................... 4,939
--------
Total......................................................... $480,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02.A.(16) and Article 2.02-1 of the Texas Business Corporation Act
and Article V of the Corporation's Amended and Restated Bylaws provide the
Corporation with broad powers and authority to indemnify its directors and
officers and to purchase and maintain insurance for such purposes. Pursuant to
such statutory and Bylaw provisions, the Corporation has purchased insurance
against certain costs of indemnification that may be incurred by it and by its
officers and directors.
Additionally, Article IX of the Corporation's Restated Articles of
Incorporation, as amended, provides that a director of the Corporation is not
liable to the Corporation or its shareholders for monetary damages for any act
or omission in the director's capacity as a director, except that Article IX
does not eliminate or limit the liability of a director for (i) breaches of
such director's duty of loyalty to the Corporation and its shareholders, (ii)
acts or omissions not in good faith or which involve intentional misconduct or
knowing violations of law, (iii) transactions from which a director receives
an improper benefit, irrespective of whether the benefit resulted from an
action taken within the scope of the director's office, (iv) acts or omissions
for which liability is specifically provided by statute and (v) acts relating
to unlawful stock repurchases or payments of dividends.
Article IX also provides that any subsequent amendments to Texas statutes
that further limit the liability of directors will inure to the benefit of the
directors, without any further action by shareholders. Any repeal or
modification of Article IX shall not adversely affect any right of protection
of a director of the Company existing at the time of the repeal or
modification.
In underwriting agreements or agency agreements entered into in connection
with the offering described in this Registration Statement, it may be provided
that the underwriters or agents shall indemnify the Corporation, its directors
and certain officers of the Corporation against liabilities resulting from
information furnished by or on behalf of the underwriters or agents
specifically for use in the Registration Statement.
See "Item 17. Undertakings" for a description of the Commission's position
regarding such indemnification provisions.
ITEM 16. EXHIBITS.
See Index to Exhibits at page II-8.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement);
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the Registration Statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) The undersigned registrants hereby undertake that:
(1) 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) 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 therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
(d) 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a
Registrant of expenses incurred or paid by a director, officer or controlling
person of such Registrant 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 Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, HL&P CAPITAL
TRUST I CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON JANUARY 21, 1997.
HL&P Capital Trust I
By: Houston Lighting & Power
Company Depositor
/s/ Hugh Rice Kelly
By: ________________________________
(HUGH RICE KELLY,EXECUTIVE VICE
PRESIDENT,GENERAL COUNSEL AND
CORPORATE SECRETARY)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, HL&P CAPITAL
TRUST II CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON JANUARY 21, 1997.
HL&P Capital Trust II
By: Houston Lighting & Power
Company Depositor
/s/ Hugh Rice Kelly
By: ________________________________
(HUGH RICE KELLY,EXECUTIVE VICE
PRESIDENT,GENERAL COUNSEL AND
CORPORATE SECRETARY)
II-4
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, HL&P CAPITAL
TRUST III CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF
TEXAS, ON JANUARY 21, 1997.
HL&P Capital Trust III
By: Houston Lighting & Power
Company Depositor
/s/ Hugh Rice Kelly
By: ________________________________
(HUGH RICE KELLY,EXECUTIVE VICE
PRESIDENT,GENERAL COUNSEL AND
CORPORATE SECRETARY)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, HL&P CAPITAL
TRUST IV CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF
TEXAS, ON JANUARY 21, 1997.
HL&P Capital Trust IV
By: Houston Lighting & Power
Company Depositor
/s/ Hugh Rice Kelly
By: ________________________________
(HUGH RICE KELLY,EXECUTIVE VICE
PRESIDENT,GENERAL COUNSEL AND
CORPORATE SECRETARY)
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON
JANUARY 21, 1997.
Houston Lighting & Power Company
(Registrant)
/s/ Don D. Jordan
By: _________________________________
(DON D. JORDAN,CHAIRMAN AND CHIEF
EXECUTIVE OFFICER)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Don D. Jordan Chairman, Chief January 21,
- ------------------------------------- Executive Officer 1997
(DON D. JORDAN) and Director
(Principal
Executive Officer
and Principal
Financial Officer)
/s/ Mary P. Ricciardello Vice President and January 21,
- ------------------------------------- Comptroller 1997
(MARY P. RICCIARDELLO) (Principal
Accounting Officer)
/s/ William T. Cottle Director January 21,
- ------------------------------------- 1997
(WILLIAM T. COTTLE)
/s/ Jack D. Greenwade Director January 21,
- ------------------------------------- 1997
(JACK D. GREENWADE)
/s/ Lee W. Hogan Director January 21,
- ------------------------------------- 1997
(LEE W. HOGAN)
II-6
<PAGE>
SIGNATURE TITLE DATE
/s/ Hugh Rice Kelly Director January 21,
- ------------------------------------- 1997
(HUGH RICE KELLY)
/s/ R. Steve Letbetter Director January 21,
- ------------------------------------- 1997
(R. STEVE LETBETTER)
/s/ David M. McClanahan Director January 21,
- ------------------------------------- 1997
(DAVID M. MCCLANAHAN)
/s/ Stephen W. Naeve Director January 21,
- ------------------------------------- 1997
(STEPHEN W. NAEVE)
/s/ S. C. Schaeffer Director January 21,
- ------------------------------------- 1997
(S. C. SCHAEFFER)
/s/ R. L. Waldrop Director January 21,
- ------------------------------------- 1997
(R. L. WALDROP)
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER NUMBER
------- ------
<C> <S> <C>
1.1 --Form of Underwriting Agreement relating to Junior
Subordinated Debentures.*
1.2 --Form of Underwriting Agreement relating to Capital
Securities.
1.3 --Form of Underwriting Agreement relating to Preferred
Securities.
4.1 --Form of Junior Subordinated Debenture Indenture between
Houston Lighting & Power Company and The Bank of New York,
as Trustee.
4.2-A --Form of Supplemental Indenture to Junior Subordinated
Debenture Indenture to be used in connection with the
issuance of Junior Subordinated Debentures relating to
Capital Securities.
4.2-B --Form of Supplemental Indenture to Junior Subordinated
Debenture Indenture to be used in connection with the
issuance of Junior Subordinated Debentures relating to
Preferred Securities.
4.3-A --Certificate of Trust of HL&P Capital Trust I.
4.3-B --Certificate of Trust of HL&P Capital Trust II.
4.3-C --Certificate of Trust of HL&P Capital Trust III.
4.3-D --Certificate of Trust of HL&P Capital Trust IV.
4.4-A --Trust Agreement of HL&P Capital Trust I.
4.4-B --Trust Agreement of HL&P Capital Trust II.
4.4-C --Trust Agreement of HL&P Capital Trust III.
4.4-D --Trust Agreement of HL&P Capital Trust IV.
4.5-A --Form of Amended and Restated Trust Agreement relating to
Capital Securities.
4.5-B --Form of Amended and Restated Trust Agreement relating to
Preferred Securities.
4.6-A --Form of Capital Security (included in Exhibit 4.5-A above).
4.6-B --Form of Preferred Security (included in Exhibit 4.5-B
above).
4.7-A --Form of Junior Subordinated Debenture relating to Capital
Securities (included in Exhibit 4.2-A above).
4.7-B --Form of Junior Subordinated Debenture relating to Preferred
Securities (included in Exhibit 4.2-B above).
4.8-A --Form of Guarantee Agreement relating to Capital Securities.
4.8-B --Form of Guarantee Agreement relating to Preferred
Securities.
4.9-A --Form of Agreement as to Expenses and Liabilities relating
to Capital Securities (included in Exhibit 4.5-A above).
4.9-B --Form of Agreement as to Expenses and Liabilities relating
to Preferred Securities (included in Exhibit 4.5-B above).
5.1 --Opinion of Baker & Botts, L.L.P. relating to HL&P Capital
Trusts I, II, III and IV.
5.2-A --Opinion of Richards, Layton & Finger relating to HL&P
Capital Trust I.
5.2-B --Opinion of Richards, Layton & Finger relating to HL&P
Capital Trust II.
5.2-C --Opinion of Richards, Layton & Finger relating to HL&P
Capital Trust III.
5.2-D --Opinion of Richards, Layton & Finger relating to HL&P
Capital Trust IV.
8.1 --Tax Opinion of Baker & Botts, L.L.P.
12 --Computation of ratios of earnings to fixed charges and
earnings to fixed charges and preferred dividends
(incorporated by reference to Exhibit 12 to the
Corporation's Quarterly Report on Form 10-Q for the quarter
ended
September 30, 1996).
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER NUMBER
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<C> <S> <C>
23.1 --Consent of Deloitte & Touche LLP.
23.2 --Consent of Baker & Botts, L.L.P. (included in Exhibits 5.1
and 8.1).
23.3 --Consent of Richards, Layton & Finger (included in Exhibits
5.2-A, 5.2-B, 5.2-C and 5.2-D).
24.1 --Powers of Attorney.
25.1 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Indenture Trustee.
25.2 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust I in connection with Capital
Securities.
25.3 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust I in connection with Capital
Securities.
25.4 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust II in connection with Capital
Securities.
25.5 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust II in connection with Capital
Securities.
25.6 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust III in connection with
Capital Securities.
25.7 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust III in connection with
Capital Securities.
25.8 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust IV in connection with Capital
Securities.
25.9 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust IV in connection with Capital
Securities.
25.10 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of the Bank of New York, as Property Trustee,
relating to HL&P Capital Trust I in connection with
Preferred Securities.
25.11 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust I in connection with
Preferred Securities.
25.12 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust II in connection with
Preferred Securities.
25.13 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust II in connection with
Preferred Securities.
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER NUMBER
------- ------
<C> <S> <C>
25.14 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust III in connection with
Preferred Securities.
25.15 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust III in connection with
Preferred Securities.
25.16 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee,
relating to HL&P Capital Trust IV in connection with
Preferred Securities.
25.17 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee,
relating to HL&P Capital Trust IV in connection with
Preferred Securities.
</TABLE>
- --------
* To be subsequently filed.
II-10
<PAGE>
Exhibit 1.2
HL&P Capital Trust ___
_____% Capital Securities, Series ___
guaranteed to the extent set forth in the Guarantee by
Houston Lighting & Power Company
--------------------------------------
Underwriting Agreement
----------------------
________ __, 19__
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
HL&P Capital Trust ___, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), and Houston Lighting & Power
Company, a Texas corporation, as depositor of the Trust and as guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated herein, that
the Trust issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of [$___________] liquidation amount of ______%
Capital Securities, Series ___ (liquidation amount $1,000 per capital security)
(the "Securities") representing undivided beneficial interests in the assets of
the Trust, guaranteed by the Guarantor as to the payment of distributions, and
as to payments on liquidation or redemption, to the extent set forth in a
guarantee agreement (the "Guarantee") among the Guarantor and The Bank of New
York, as trustee (the "Guarantee Trustee"). The proceeds of the sale of the
Securities and an aggregate of [$__________] liquidation amount of its Common
Securities (liquidation amount $1,000 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Debentures,
Series ___ (the "Subordinated Debentures") of the Guarantor to be issued
pursuant to an Indenture (the "Indenture") among the Guarantor and The Bank of
New York, as trustee (the "Debenture Trustee").
1. Representations and Warranties of the Guarantor and the Trust.
-------------------------------------------------------------
(a) The Guarantor and the Trust jointly and severally represent and warrant to,
and agree with, each of the Underwriters that:
<PAGE>
(i) A registration statement on Form S-3 with respect to the
Securities, the Subordinated Debentures and the Guarantee (File
Nos. 333-____ and 333-____) including a prospectus (any
preliminary prospectus included in such registration statement
being hereinafter referred to as a "Preliminary Prospectus"),
copies of which have been delivered to you, has been prepared and
filed by the Guarantor and the Trust with the Securities and
Exchange Commission (the "Commission") and has been declared
effective under the Securities Act of 1933, as amended (the
"Act"). No stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been initiated or, to the best knowledge of the
Guarantor and the Trust, threatened by the Commission. Such
registration statement (including all documents filed as part
thereof or incorporated by reference therein, but excluding any
Forms T-1, as amended), as amended and supplemented at the date of
this Agreement is hereinafter referred to as to the "Registration
Statement." The Prospectus contained in the Registration Statement
at the time that the Registration Statement was declared effective
is hereinafter referred to as the "Basic Prospectus."
The prospectus included in the Registration Statement, as
amended and supplemented to the date of this Agreement (including
all documents then incorporated by reference therein and including
the Preliminary Supplemented Prospectus (hereinafter defined) as
further supplemented by the Final Supplemented Prospectus
(hereinafter defined)), is hereinafter referred to as the
"Prospectus". Any reference herein to the Registration Statement,
the Prospectus, a Preliminary Prospectus, the Basic Prospectus,
the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, or deemed to be incorporated by
reference therein, and filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the date of
such Registration Statement, Prospectus, Preliminary Prospectus,
the Basic Prospectus, the Preliminary Supplemented Prospectus or
the Final Supplemented Prospectus. Any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer
to and include, without limitation, the filing of any document
under the Exchange Act deemed to be incorporated therein by
reference after the date of such Registration Statement or
Prospectus.
A prospectus supplement, dated, subject to completion, January
__, 1997, as supplemented and amended, is hereinafter called the
"Preliminary Supplemented Prospectus". A prospectus supplement,
dated the date hereof, setting forth the terms of the Securities
and of their sale and distribution (the "Final Supplemented
Prospectus") has been prepared and will be filed pursuant to Rule
424(b) under the Act ("Rule 424(b)").
2
<PAGE>
(ii) On the effective date of the Registration Statement, the
Registration Statement, as amended and supplemented at that
time, conformed in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the
"TIA"), and the applicable rules and regulations of the
Commission thereunder, and did not include any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading; on the date of the Preliminary
Supplemented Prospectus, the Preliminary Supplemented
Prospectus conformed in all material respects to the
requirements of the Act and the TIA and the applicable rules
and regulations of the Commission thereunder, and did not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and on
the date of this Agreement, the Registration Statement and the
Prospectus conform, and at the Time of Delivery (hereinafter
defined) they will conform, in all material respects to the
requirements of the Act and the TIA and the applicable rules
and regulations of the Commission thereunder, and on the date
of this Agreement do not, and on the Time of Delivery will not,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iii) Each document filed or to be filed pursuant to the Exchange Act
and incorporated by reference, or deemed to be incorporated by
reference in the Prospectus (including any document to be filed
pursuant to the Exchange Act which will constitute an amendment
to the Prospectus) conformed or, when so filed, will conform in
all material respects to the requirements of the Exchange Act
and the applicable rules and regulations of the Commission
thereunder, and none of such documents included or, when so
filed, will include any untrue statement of a material fact or
omitted or, when so filed, will omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(iv) The Trust has been duly created and is validly existing as a
business trust in good standing under the laws of the State of
Delaware, with power and authority to own, lease and operate
its properties and conduct its business as described in the
Prospectus and, based on expected operations and law in effect
on the date hereof, the Trust will be classified as a grantor
trust and will not be classified as an association taxable as a
corporation for United States federal income tax purposes;
(v) This Agreement has been duly authorized, executed and delivered
by the Guarantor and the Trust;
(vi) The Securities have been duly authorized by the Trust
Agreement, and, when issued and delivered pursuant to this
Agreement, such
3
<PAGE>
Securities will be duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust
entitled to the benefits provided by the Amended and Restated
Trust Agreement (the "Trust Agreement") among the Guarantor and
the Trustees named therein (the "Trustees")(subject to the
terms of the Trust Agreement); provided that the holders of
Securities (the "Securityholders") may be obligated, pursuant
to the Trust Agreement, to (a) provide indemnity and/or
security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of Securities
certificates and the issuance of replacement Securities
certificates and (b) provide security and indemnity in
connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its
rights and remedies under the Trust Agreement; and the
Securities conform to the description thereof contained in the
Final Supplemented Prospectus;
(vii) The Securityholders will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware;
(viii) The Common Securities of the Trust have been duly authorized
by the Trust Agreement, and upon delivery by the Trust to the
Guarantor against payment therefor as set forth in the Trust
Agreement, will be duly and validly issued undivided
beneficial interests in the assets of the Trust and conform to
the description thereof contained in the Final Supplemented
Prospectus; the issuance of the Common Securities of the Trust
is not subject to preemptive or other similar rights; and at
the Time of Delivery, all of the issued and outstanding Common
Securities of the Trust will be directly owned by the
Guarantor free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(ix) The Guarantee, the Trust Agreement, the Subordinated
Debentures, the Indenture and the Agreement as to Expenses and
Liabilities between the Guarantor and the Trust (the "Expense
Agreement") (the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense
Agreement being collectively referred to as the "Guarantor
Agreements") have each been duly authorized by the Guarantor
and when validly executed and delivered by the Guarantor and,
in the case of the Guarantee, by the Guarantee Trustee, in the
case of the Trust Agreement, by the Trustees and, in the case
of the Indenture, by the Debenture Trustee, and, in the case of
the Subordinated Debentures, when validly issued by the
Guarantor and duly authenticated and delivered by the Debenture
Trustee, will constitute valid and legally binding obligations
of the Guarantor, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or
4
<PAGE>
affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); the Subordinated Debentures
when validly issued by the Guarantor and duly authenticated and
delivered by the Debenture Trustee, will be entitled to the
benefits of the Indenture; and the Guarantor Agreements conform
to the descriptions thereof in the Final Supplemented
Prospectus;
(x) The issue and sale of the Securities by the Trust, the
compliance by the Trust with all of the provisions of this
Agreement, the Securities and the Trust Agreement, the purchase
of the Subordinated Debentures by the Trust, the execution,
delivery and performance by the Trust of the Trust Agreement
and the consummation of the transactions contemplated herein
and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trust
is a party or by which the Trust is bound or to which any of
the property or assets of the Trust is subject, nor will such
action result in any violation of the provisions of the Trust
Agreement or any existing statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties; the
Commission has issued an order under the Act declaring the
Registration Statement effective and qualifying the Guarantee,
the Trust Agreement and the Indenture under the TIA and no
other consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Securities
and the Common Securities by the Trust, the purchase of the
Subordinated Debentures by the Trust or the consummation by the
Trust of the transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Securities by the Underwriters;
(xi) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with
all of the provisions of this Agreement, the Guarantee, the
Subordinated Debentures, the Trust Agreement, the Indenture and
the Expense Agreement, the execution, delivery and performance
by the Guarantor of the Guarantor Agreements, and the
consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument for borrowed money
to which the Guarantor or any Significant Subsidiary (as
defined by Regulation S-X) is a party or by which the
Guarantor or any Significant Subsidiary is bound or to which
any of the property or assets of the Guarantor or any
Significant Subsidiary is subject, nor will such action result
in any violation of the provisions of the Restated Articles of
Incorporation or Amended and Restated By-laws of the Guarantor
or any existing statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over
the Guarantor or any of its or its Significant Subsidiaries'
properties; the Commission has issued an order under the Act
declaring the Registration Statement effective and qualifying
the Guarantee, the Trust Agreement and the Indenture under
the TIA
5
<PAGE>
and no other consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue of the
Guarantee or the Subordinated Debentures or the consummation by
the Guarantor of the other transactions contemplated by this
Agreement or the Guarantor Agreements, except such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the issuance by the Guarantor of the Guarantee
and the Subordinated Debentures;
(xii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", or
an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
2. Sale and Delivery. (a) Subject to the terms and conditions
-----------------
herein set forth, the Guarantor and the Trust agree to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Trust, at a purchase price of 100% of the
liquidation amount thereof, the liquidation amount of Securities set forth
opposite the name of such Underwriters in Schedule I hereto.
(b) As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be issued by the Trust to purchase the Subordinated Debentures
of the Guarantor, the Guarantor hereby agrees to pay at the Time of Delivery to
Goldman, Sachs & Co., for the accounts of the several Underwriters, an amount
equal to $[ ] per Security for the Securities to be delivered at the Time of
Delivery by wire transfer of Federal (same-day) funds. The total aggregate
amount of the Underwriters' compensation is $_______________.
(c) Except as set forth in the next paragraph, the Securities to
be purchased by each Underwriter hereunder will be represented by one or more
definitive global Securities in book-entry form which will be deposited by or on
behalf of the Trust with The Depository Trust Company ("DTC") or its designated
custodian. The Trust will deliver the Securities to Goldman, Sachs & Co., for
the account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal (same
day) funds to a commercial bank account located in the United States and
designated in writing at least forty-eight hours prior to the Time of Delivery
by the Guarantor to Goldman, Sachs & Co., by causing DTC to credit the
Securities to the account of Goldman, Sachs & Co. at DTC. The Trust will cause
the global certificates representing the Securities to be made available to
Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on ________ __, 19__ or such other time and date as Goldman,
Sachs & Co. and the Guarantor may agree upon in writing. Such time and date are
herein called the "Time of Delivery".
6
<PAGE>
(d) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 5 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 5(k) hereof, will be delivered at such time and
date at the offices of Dewey Ballantine, 1301 Avenue of the Americas, New York,
New York 10019 or such other location as Goldman Sachs & Co. and the Guarantor
may agree in writing (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 1:00 p.m., New York City time, or such other
time as Goldman Sachs & Co. and the Guarantor may agree in writing on the New
York Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 2, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
3. Covenants and Agreements. The Guarantor and the Trust jointly
------------------------
and severally covenant and agree with each of the Underwriters:
(a) That the Guarantor will furnish without charge to the
Underwriters a copy of the Registration Statement, including all documents
incorporated by reference therein and exhibits filed with the Registration
Statement (other than exhibits which are incorporated by reference and have
previously been so furnished), and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, the Preliminary Supplemented Prospectus
and the Final Supplemented Prospectus, any documents incorporated by reference
therein at or after the date thereof (including documents from which information
has been so incorporated) and any supplements and amendments thereto as each
Underwriter may reasonably request so long as such Underwriter is required to
deliver a prospectus;
(b) That the Guarantor will cause the Final Supplemented Prospectus
to be filed pursuant to, and in compliance with, Rule 424(b) and will promptly
advise the Underwriters (i) when any amendment to the Registration Statement
shall have been filed; provided, that, with respect to documents filed pursuant
--------
to the Exchange Act and incorporated by reference into the Registration
Statement, such notice shall only be required during such time as the
Underwriters are required in the reasonable opinion of Dewey Ballantine, counsel
for the Underwriters, to deliver a prospectus, (ii) of any request by the
Commission for any amendment of the Registration Statement, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that
7
<PAGE>
purpose, and (iv) of the receipt by the Guarantor or the Trust of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. So long as any Underwriter is required in the
reasonable opinion of Dewey Ballantine to deliver a prospectus, the Guarantor
will not file any amendment to the Registration Statement or supplement to the
Prospectus unless the Guarantor has furnished one copy of such amendment or
supplement to Goldman, Sachs & Co. and to Dewey Ballantine, and, if such
amendment or supplement is to be filed on or prior to the Time of Delivery, or
under circumstances where the Underwriters are required in the reasonable
opinion of Dewey Ballantine, to deliver a Prospectus, the Underwriters or Dewey
Ballantine, shall not reasonably have objected thereto. If the Commission shall
issue a stop order suspending the effectiveness of the Registration Statement,
the Guarantor will take such steps to obtain the lifting of that order as in the
best judgment of the Guarantor are not contrary to the interests of the
Guarantor;
(c) That if, at any time when in the reasonable opinion of Dewey
Ballantine the Prospectus is required by law to be delivered by an Underwriter
or a dealer, any event shall occur as a result of which it is necessary, in the
reasonable opinion of Dewey Ballantine or counsel for the Guarantor, to amend or
supplement the Prospectus or modify the information incorporated by reference
therein in order to make the statements therein, in light of the circumstances
existing when the Prospectus is delivered to a purchaser, not misleading, or if
it shall be necessary in the reasonable opinion of any such counsel, to amend or
supplement the Prospectus or modify such information to comply with law, the
Guarantor will forthwith (i) prepare and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses the Underwriters will
furnish to the Guarantor) to whom Securities may have been sold by the
Underwriters and to any other dealers upon reasonable request, either amendments
or supplements to the Prospectus or (ii) file with the Commission documents
incorporated by reference in the Prospectus, which shall be so supplied to the
Underwriters and such dealers, in either case so that the statements in the
Prospectus as so amended, supplemented or modified will not, in light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(d) That the Guarantor will endeavor to qualify, at its expense, the
Securities, and, to the extent required or advisable, the Guarantee and the
Junior Subordinated Notes, for offer and sale under the securities or Blue Sky
laws of such jurisdictions as the Underwriters shall reasonably request and to
pay all filing fees, reasonable expenses and legal fees in connection therewith
and in connection with the determination of the eligibility for investment of
the Securities; provided, that the Guarantor shall not be required to qualify as
--------
a foreign corporation or a dealer in securities or to file any consents to
service of process under the laws of any jurisdiction;
(e) That the Guarantor will make generally available to its security
holders and the Securityholders as soon as practicable an earnings statement of
the Guarantor covering a twelve-month period beginning after the Time of
Delivery which shall satisfy the provisions of Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including Rule 158 under the
Act).
8
<PAGE>
(f) That during the period beginning on the date of this Agreement
and continuing to and including the Time of Delivery, the Guarantor and the
Trust will not offer, sell, contract to sell or otherwise dispose of any
Securities, any security convertible into or exchangeable into or exercisable
for Securities or Subordinated Debentures or any debt securities substantially
similar to the Subordinated Debentures or equity securities substantially
similar to the Securities (except for the Subordinated Debentures and the
Securities issued pursuant to this Agreement), without the prior written consent
of the Underwriters.
4. Expenses. The Guarantor and the Trust jointly and severally
--------
covenant and agree with the several Underwriters that the Guarantor and the
Trust will pay or cause to be paid the following: (i) all expenses in connection
with the preparation, printing and filing of the Registration Statement as
originally filed and of each amendment thereto; (ii) the fees, disbursements and
expenses of the Guarantor's or the Trust's counsel and accountants in connection
with the issue of the Securities and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the Prospectus,
the Preliminary Supplemented Prospectus, the Final Supplemented Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (iii) all reasonable expenses in
connection with the qualification of the Securities, the Guarantees and the
Subordinated Debentures issuable upon exchange of the Securities, for offering
and sale under state securities laws as provided in Section 3(d) hereof,
including the reasonable fees and disbursements of counsel for the Underwriters
in connection with such qualification and in connection with the Blue Sky and
legal investment surveys; (iv) any fees charged by securities rating services
for rating the Securities and the Subordinated Debentures; (v) the cost of
preparing the Securities and the Subordinated Debentures; (vi) the fees and
expenses of the Trustees, the Guarantee Trustee and the Debenture Trustee and
any agent of the Trustees, the Guarantee Trustee and the Debenture Trustee and
the fees and disbursements of counsel for the Trustees in connection with the
Trust Agreement and the Securities, counsel for the Guarantee Trustee in
connection with the Guarantee and counsel for the Debenture Trustee in
connection with the Indenture and the Subordinated Debentures; (vii) the fees
and disbursements of Delaware counsel to the Trust; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 6 and 9 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel and any advertising expenses connected with any offers
they may make.
5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriter hereunder shall be subject to the accuracy, at and (except as
otherwise stated herein) as of the date hereof and at and as of the Time of
Delivery, of the representations and warranties made herein by the Guarantor and
the Trust, to compliance at and as of the Time of Delivery by the Guarantor and
the Trust with their covenants and agreements herein contained and the other
provisions hereof to be satisfied at or prior to the Time of Delivery, and to
the following additional conditions:
(a) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose
shall be pending before
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or threatened by the Commission, and the Underwriters shall have received on and
as of the Time of Delivery, a certificate dated such date, signed by an
executive officer of the Guarantor or an authorized agent of the Guarantor
designated as such by the Board of Directors of the Guarantor to the foregoing
effect, and (ii) there shall have been no material adverse change in or
affecting the business, properties or financial condition of the Guarantor or
the Trust from that set forth in or contemplated by the Registration Statement
at the time it became effective, except as set forth in or contemplated by the
Prospectus, and the Underwriters shall have received on and as of the Time of
Delivery, a certificate dated such date, signed by an executive officer of the
Guarantor or an executive officer of Houston Industries Incorporated ("Houston
Industries") to the foregoing effect. The officers or agents making such
certificates may rely upon the best of his knowledge as to proceedings pending
or threatened.
(b) Dewey Ballantine, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters. In giving such opinion, such counsel may
rely (i) as to matters of Texas law and the exemption of Houston Industries
under the 1935 Act (as defined herein) upon the opinions of Baker & Botts L.L.P.
referred to in (d) below and Hugh Rice Kelly or such other counsel referred to
in (c) below and (ii) as to matters of Delaware law upon the opinion of
Richards, Layton & Finger referred to in (e) below.
(c) Hugh Rice Kelly, Senior Vice President, General Counsel, and
Corporate Secretary for the Guarantor, shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Guarantor has been duly incorporated and is validly existing
in good standing under the laws of the State of Texas and has
corporate power and authority to enter into and perform its
obligations under this Agreement and the Guarantor Agreements;
(ii) No consent, approval, authorization or other order of, or
registration with, any governmental regulatory body (other than
such as may be required under applicable securities laws, as to
which such counsel need not express an opinion) is required for
the issuance and sale of the Securities being delivered at the
Time of Delivery or the issuance of the Guarantee and the
Subordinated Debentures or the consummation by the Trust or the
Guarantor of the transactions contemplated by this Agreement and
the Guarantor Agreements;
(iii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which Guarantor
is subject, which, individually or in the aggregate, are expected
to have a material adverse effect on the financial position,
shareholders' equity or results of operations of the Guarantor;
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(iv) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures and the execution, delivery and
performance by the Guarantor of this Agreement and the Guarantor
Agreements will not result in the breach or violation of, or
constitute a default under, the Restated Articles of Incorporation
or the Amended and Restated Bylaws of the Guarantor, each as
amended to date, any indenture, mortgage, deed of trust or other
agreement or instrument for borrowed money to which the Guarantor
is a party or by which it is bound or to which its property is
subject or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor
or its property, in any manner which would have a material adverse
effect on the business of the Guarantor; and
(v) The description of statutes and regulations set forth in Part I of
the Guarantor's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 under the captions "Business--Regulatory
Matters--Rates and Services" and "--Environmental Quality" fairly
describe in all material respects the portions of the statutes and
regulations addressed thereby.
(d) Baker & Botts L.L.P., counsel for the Guarantor and the Trust,
shall have furnished to you their written opinion, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) Such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not so described and filed;
(ii) The statements set forth in the Final Supplemental Prospectus
under the captions "Description of Capital Securities",
"Description of Junior Subordinated Debentures", "Description of
Guarantees", "The Expense Agreement" and "Relationship Among the
Capital Securities, the Corresponding Junior Subordinated
Debentures, the Expense Agreement and the Guarantees", accurately
summarize in all material respects the terms of the Securities,
the Trust Agreement, the Subordinated Debentures, the Expense
Agreement and the Guarantee, and the statements under the caption
"Certain ERISA Considerations" insofar as they purport to describe
the provisions of the laws and regulations referred to therein are
accurate summaries in all materials respects thereof;
(iii) The Securities, the Subordinated Debentures and the Guarantee
conform as to legal matters in all material respects to the
descriptions thereof contained in the Final Supplemented
Prospectus under the captions "Certain Terms of Series ___ Capital
Securities", "Certain Terms of Series ___ Subordinated
Debentures", and "Certain Terms of Series ___ Guarantee" and in
the Basic Prospectus under the
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captions "Description of Junior Subordinated Debentures",
"Description of Securities", "Description of Guarantees", and
"Relationship Among Securities, The Corresponding Junior
Subordinated Debentures, The Expense Agreement and The Guarantees",
respectively;
(v) The Subordinated Debentures are in the form prescribed in or
pursuant to the Indenture, have been duly and validly authorized by
all necessary corporate action on the part of the Guarantor and,
when executed and delivered by the Guarantor and authenticated by
the Trustee as specified in or pursuant to the Indenture, will be
valid and binding obligations of the Guarantor, enforceable in
accordance with their terms, except as such enforceability is
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting creditors'
rights generally and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity
or at law); the Guarantee has been duly and validly authorized by
all necessary corporate action on the part of the Guarantor; the
Guarantee has been duly and validly executed and delivered by the
Guarantor and (assuming due authorization, execution and delivery by
the Trustee thereunder) constitutes the valid and binding
obligation of the Guarantor, enforceable in accordance with its
terms, except as such enforceability is subject to the effect of any
applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); the Trust
Agreement, the Indenture and the Expense Agreement have each been
duly authorized, executed and delivered by the Guarantor and, when
executed and delivered by the other parties thereto, will constitute
valid and binding obligations of the Guarantor, enforceable in
accordance with their respective terms, except as such
enforceability is subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other law relating to or
affecting creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is considered in
proceeding in equity or at law);
(vi) The Guarantee, the Trust Agreement and the Indenture have been
duly qualified under the TIA;
(vii) Based upon the timely filing by Houston Industries with the
commission of an exemption statement pursuant to Rule 2 under the
Public Utility Holding Company Act of 1935 ("1935 Act") which, to
the best of the knowledge of such counsel, is not the subject of any
notification provided for in Rule 6 under the 1935 Act, Houston
Industries is exempt from the provisions of the 1935 Act except
Sections 9(a)(2), 32 and 33 thereof;
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(viii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or
an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act (in giving
such opinion counsel may reference specified "no-action"
letters);
(ix) The Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceedings for that
purpose have been instituted and are pending or are threatened
by the Commission under the Act; the Registration Statement,
as of its effective date, and the Final Supplemented
Prospectus, as of ________ ___, 19__, (except for (A) the
operating statistics, financial statements and financial
statement schedules contained or incorporated by reference
therein or omitted therefrom (including the auditors' reports
on the financial statements and the notes to the financial
statements), (B) the other financial and statistical
information contained or incorporated by reference therein or
omitted therefrom and (C) the exhibits thereto, as to which
such counsel need not express an opinion) complied as to form
in all material respects with the requirements of Form S-3
under the Act and the applicable rules and regulations of the
Commission thereunder, and each document incorporated by
reference therein as originally filed pursuant to the Exchange
Act (except for (A) the operating statistics, financial
statements and financial statement schedules contained or
incorporated by reference therein or omitted therefrom
(including the auditors' reports on the financial statements
and the notes to the financial statements), (B) the other
financial and statistical information contained or
incorporated by reference therein or omitted therefrom and (C)
the exhibits thereto, as to which such counsel need not
express an opinion) when so filed complied as to form in all
material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder; and
(x) The execution, delivery and performance by the Guarantor of
this Agreement have been duly authorized by all necessary
corporate action on the part of the Guarantor, and this
Agreement has been duly executed and delivered by the
Guarantor.
In addition, such counsel shall state that no facts have come to
the attention of such counsel that lead them to believe that the Registration
Statement (except for (A) the operating statistics, financial statements and
financial statement schedules contained or incorporated by reference therein
(including the auditors' reports on the financial statements and the notes to
the financial statements, except to the extent that such notes describe legal or
governmental proceedings to which the Company is a party and are incorporated by
reference into one or more items of a report that is incorporated by reference
in the Registration Statement or the Prospectus, other than an item that
requires that financial statements be provided), (B) the other
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financial and statistical information contained or incorporated by reference
therein and (C) the exhibits thereto, as to which such counsel need not comment)
as of the time such Registration Statement became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus, as amended, supplemented or modified by the filing of a
document incorporated by reference therein if so amended, supplemented or
modified (except for (A) the operating statistics, financial statement and
financial statements schedules contained or incorporated by reference therein
(including the auditors' reports on the financial statements and the notes to
the financial statements, except to the extent that such notes describe legal or
governmental proceedings to which the Guarantor is a party and are incorporated
by reference into one or more items of a report that is incorporated by
reference in the Prospectus, other than an item that requires that financial
statements be provided), (B) the other financial and statistical information
contained or incorporated by reference therein and (C) the exhibits thereto, as
to which such counsel need not comment), as of the date of the Final
Supplemented Prospectus contained, or as of the Time of Delivery contains, any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) Richards, Layton & Finger, special Delaware counsel for the
Guarantor and the Trust, shall have furnished to you their written opinion,
dated the Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust
Act, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of
the Trust as a business trust have been made;
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the trust power and authority to own property and
conduct its business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally binding
obligation of the Guarantor and the Trustees, and is
enforceable against the Guarantor and the Trustees, in
accordance with its terms, subject, as to enforcement, to the
effect upon the Trust Agreement of (i) bankruptcy, insolvency,
fraudulent transfer and conveyance, reorganization, moratorium,
receivership, liquidation and similar laws of general
applicability relating to or affecting creditors' rights, (ii)
principles of equity, including applicable law relating to
fiduciary duties, and (iii) the effect of applicable public
policy on the enforceability of provisions relating to
indemnification or contribution;
(iv) Under the Delaware Business Trust Act, the Original Trust
Agreement (as defined in the Trust Agreement) and the Trust
Agreement, the Trust has the trust power and authority to (a)
execute and deliver, and to
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perform its obligations under this Agreement and (b) issue and perform
its obligations under the Securities and the Common Securities;
(v) Under the Delaware Business Trust Act, the Original Trust Agreement
and the Trust Agreement, the execution and delivery by the Trust of
this Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust action on
the part of the Trust;
(vi) Under the Delaware Business Trust Act, the Original Trust Agreement
and the Trust Agreement, this Agreement has been duly executed by the
Trust;
(vii) The Securities have been duly authorized by the Trust Agreement and
are duly and validly issued and, subject to the qualifications set
forth herein, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and are entitled to the benefits
provided by the Trust Agreement (subject to the terms of the Trust
Agreement); provided that such counsel may note that the
Securityholders may be obligated, pursuant to the Trust Agreement, to
(a) provide indemnity and/or security in connection with and pay taxes
or governmental charges arising from transfers or exchanges of Capital
Securities Certificates and the issuance of replacement Capital
Securities Certificates and (b) provide security and indemnity in
connection with requests of or directions to the Property Trustee (as
defined in the Trust Agreement) to exercise its rights and remedies
under the Trust Agreement. The Securityholders, as beneficial owners
of the Trust, are entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
(viii) The Common Securities of the Trust have been duly authorized by the
Trust Agreement and are validly issued, and fully paid undivided
beneficial interests in the assets of the Trust;
(ix) Under the Delaware Business Trust Act and the Trust Agreement, the
issuance of the Securities and the Common Securities is not subject to
preemptive rights;
(x) The issuance and sale by the Trust of the Securities and the Common
Securities, the execution, delivery and performance by the Trust of
this Agreement, the consummation by the Trust of the transactions
contemplated by this Agreement and the Trust Agreement and compliance
by the Trust with its obligations thereunder do not violate (a) any of
the provisions of the Certificate of Trust of the Trust or the Trust
Agreement, or (b) any applicable Delaware law or administrative
regulation;
(xi) Such counsel has reviewed the statements in the Basic Prospectus under
the caption "The Issuers" and the statements in the Preliminary
Supplemented Prospectus and Final Supplemented Prospectus under the
caption "HL&P Capital Trust ___" and, insofar as they contain
statements of Delaware law, such statements are fairly presented;
(xii) No authorization, approval, consent or order of any Delaware court or
Delaware governmental authority or Delaware agency is required to be
obtained
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by the Trust solely in connection with the issuance and sale of the
Securities and the Common Securities. (In rendering the opinion
expressed in this paragraph (xii), such counsel need express no
opinion concerning the securities laws of the State of Delaware.);
and
(xiii) Assuming that (i) the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the
filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, and (ii) the Trust
is treated as a grantor trust for federal income tax purposes, the
Securityholders (other than those holders of the Securities who
reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely
as a result of their participation in the Trust, and the Trust will
not be liable for any income tax imposed by the State of Delaware.
(f) Baker & Botts L.L.P., special tax counsel for the Guarantor and
the Trust, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that such
firm confirms its opinion set forth in the Final Supplemented Prospectus under
the caption "Certain Federal Income Tax Consequences".
(g) At the time of execution of this Agreement, Deloitte & Touche
LLP shall have furnished to you a letter dated the date of such execution,
substantially in the form heretofore supplied and deemed satisfactory to you.
(h) At the Time of Delivery, Deloitte & Touche LLP shall have
furnished you a letter, dated the Time of Delivery, to the effect that such
accountants reaffirm, as of the Time of Delivery and as though made on the Time
of Delivery, the statements made in the letter furnished by such accountants
pursuant to paragraph (g) of this Section 5, except that the specified date
referred to in such letter will be a date not more than five business days prior
to the Time of Delivery.
(i) A Special Event (as defined in the Final Supplemented
Prospectus, except that the reference to effectiveness or announcement on or
after the date of issuance of the Securities shall be deemed a reference to
effectiveness or announcement on or after the date of this Agreement) shall not
have occurred and be continuing.
(j) The Guarantor and the Trust shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the
Guarantor and of administrators of the Trust satisfactory to you as to the
accuracy of the representations and warranties of the Guarantor and the Trust
herein at and as of the Time of Delivery, as to the performance by the Guarantor
and the Trust of all of their respective obligations hereunder to be performed
at or prior to the Time of Delivery, as to the matters set forth in the
introductory paragraph to this Section 5 and subsection (a) of this Section and
as to such other matters as you may reasonably request.
6. Indemnification and Contribution. (a) The Guarantor and the
--------------------------------
Trust, jointly and severally, agree to indemnify and hold harmless each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of the Act or the
16
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Exchange Act, against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any claims
therefore and counsel fees incurred in connection therewith), joint or several,
which may be based upon either the Act, or the Exchange Act, or any other
statute or at common law, on the ground or alleged ground that any Preliminary
Supplemented Prospectus, Final Supplemented Prospectus, Preliminary Prospectus,
the Registration Statement, the Basic Prospectus or the Prospectus (or any such
document, as from time to time amended, or deemed to be amended, supplemented or
modified) includes or allegedly includes an untrue statement of material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, written information
furnished to the Guarantor or the Trust by any Underwriter through Goldman,
Sachs & Co. specifically for use in the preparation thereof; provided that in no
case is the Guarantor or the Trust to be liable with respect to any claims made
against any Underwriter or any such controlling person unless such Underwriter
or such controlling person shall have notified the Guarantor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Underwriter or such controlling person, but failure to notify the Guarantor or
Trust of any such claim shall not relieve it from any liability which it may
have to such Underwriter or such controlling person otherwise than on account of
the indemnity agreement contained in this paragraph; and provided, further, that
the foregoing indemnity with respect to the Preliminary Prospectus, the Basic
Prospectus, the Prospectus, the Preliminary Supplemented Prospectus and the
Final Supplemented Prospectus shall not inure to the benefit of any Underwriter
if a copy of the Preliminary Prospectus, the Basic Prospectus, the Prospectus,
the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus as
amended or supplemented, had not been sent or given by or on behalf of such
Underwriter to the person asserting any such losses, claims, damages or
liabilities concurrently with or prior to delivery of the written confirmation
of the sale of Securities to such person and the untrue statement or omission of
a material fact contained in any such Preliminary Prospectus, Basic Prospectus,
Prospectus, Preliminary Supplemented Prospectus or Final Supplemented Prospectus
was corrected in the Preliminary Prospectus, Basic Prospectus, Prospectus,
Preliminary Supplemented Prospectus or Final Supplemented Prospectus, as amended
or supplemented.
The Guarantor and the Trust will be entitled to participate at their
own expense in the defense, or, if they so elect, to assume the defense of any
suit brought to enforce any such liability, but, if the Guarantor or the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it. In the event that the Guarantor or the Trust elects to assume the
defense of any such suit and retains such counsel, the Underwriter or
Underwriters or controlling person or persons, defendant or defendants in the
suit, may retain additional counsel but shall bear the fees and expenses of such
counsel unless (i) the Guarantor or the Trust shall have specifically authorized
the retaining of such counsel or (ii) the parties to such suit include the
Underwriter or Underwriters or controlling person or persons and the Underwriter
or Underwriters or controlling person or persons have been advised by such
counsel that one or more legal defenses may be available to it or them which may
not be available to the Guarantor or the Trust, in which case the Guarantor or
the Trust shall not be entitled to assume the defense of such suit on behalf of
such Underwriter or Underwriters
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or controlling person or persons, notwithstanding their obligation to bear the
reasonable fees and expenses of such counsel, it being understood, however, that
the Guarantor and the Trust shall not, in connection with any one such suit or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for all such Underwriters and their
controlling persons, which firm shall be designated in writing by Goldman, Sachs
& Co. The Guarantor and the Trust shall not be liable to indemnify any person
for any settlement of any such claim effected without the Guarantor's or the
Trust's consent. This indemnity agreement will be in addition to any liability
which the Guarantor and the Trust might otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the
Guarantor and the Trust, each of the Guarantor's directors, each of the
Guarantor's officers who have signed the Registration Statement, each of the
Trustees who have signed the Registration Statement and each person, if any, who
controls the Guarantor and the Trust within the meaning of the Act or the
Exchange Act, against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which may be based upon the Act, or any other statute or at common law, on the
ground or alleged ground that any Preliminary Supplemented Prospectus, Final
Supplemented Prospectus, Preliminary Prospectus, the Registration Statement, the
Basic Prospectus or the Prospectus (or any such document, as from time to time
amended, or deemed to be amended, supplemented or modified) includes or
allegedly includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon, and in conformity with, written information
furnished to the Guarantor or the Trust by such Underwriter through Goldman
Sachs & Co. specifically for use in the preparation thereof; provided that in no
case is such Underwriter to be liable with respect to any claims made against
the Guarantor or the Trust or any such director, officer, trustee or controlling
person unless the Guarantor or the Trust or any such director, officer, trustee
or controlling person shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Guarantor
or the Trust or any such director, officer, trustee or controlling person, but
failure to notify such Underwriter of any such claim shall not relieve it from
any liability which it may have to the Guarantor or the Trust or any such
director, officer, trustee or controlling person otherwise than on account of
the indemnity agreement contained in this paragraph. Such Underwriter will be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such defense shall be conducted
by counsel chosen by it. In the event that such Underwriter elects to assume the
defense of any such suit and retain such counsel, the Guarantor or the Trust or
any such director, officer, trustee or controlling person, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) such Underwriter shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include the Guarantor or the Trust of any such director, officer, trustee or
controlling person and such Underwriter and the Guarantor or the Trust of such
director, officer, trustee or controlling
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person have been advised by such counsel that one or more legal defenses may be
available to it or them which may not be available to such Underwriter, in which
case such Underwriter shall not be entitled to assume the defense of such suit
on behalf of the Guarantor or the Trust of any such director, officer, trustee
or controlling person, notwithstanding its obligation to bear the reasonable
fees and expenses of such counsel, it being understood, however, that such
Underwriter shall not, in connection with any one such suit or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all of the Guarantor or the Trust and any such
director, officer, trustee or controlling person, which firm shall be designated
in writing by the Guarantor. Such Underwriter shall not be liable to indemnify
any person for any settlement of any such claim effected without such
Underwriter's consent. This indemnity agreement will be in addition to any
liability which such Underwriter might otherwise have.
(c) If recovery is not available under Section 6(a) or 6(b) hereof,
for any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution for
liabilities and expenses, except to the extent that contribution is not
permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the offering of the
Securities (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Guarantor and
the Trust and the Underwriters agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose). No
Underwriters or any person controlling such Underwriters shall be obligated to
make contribution hereunder which in the aggregate exceeds the total public
offering price of the Securities purchased by such Underwriters under this
Agreement, less the aggregate amount of any damages which such Underwriters and
its controlling persons have otherwise been required to pay in respect of the
same claim or any substantially similar claim. The Underwriters' obligations to
contribute are several in proportion to their respective underwriting
obligations, and not joint.
7. Substitution of Underwriters. If any Underwriter shall default in its
----------------------------
obligation to purchase the Securities which it has agreed to purchase hereunder
and the aggregate principal amount of such Securities which such defaulting
Underwriter agreed but failed to purchase does not exceed 10% of the aggregate
principal amount of all the Securities, the non-defaulting Underwriters may make
arrangements satisfactory to the Guarantor and Trust for the purchase of the
aggregate principal amount of such Securities by other persons, including the
non-defaulting Underwriters, but if no such arrangements are made prior to the
Time of Delivery, the non-defaulting Underwriters shall be obligated severally
in proportion to their respective commitments hereunder, to purchase the
Securities which such defaulting Underwriter agreed but failed to purchase. If
any Underwriter or Underwriters shall so default and the aggregate principal
amount of such Securities with respect to which such default or defaults occur
is more than 10% of the aggregate principal amount of all the Securities and
arrangements satisfactory to
19
<PAGE>
the non-defaulting Underwriters and the Guarantor and the Trust for the purchase
of such Securities by other persons are not made within 48 hours after such
default, this agreement will terminate.
If the non-defaulting Underwriter or substituted underwriter or
underwriters are required hereby or agree to take up all or part of the
Securities of the defaulting Underwriter as provided in this Section 7, (i) the
Guarantor and the Trust shall have the right to postpone the Time of Delivery
for a period of not more than five full business days, in order that the
Guarantor and the Trust may effect whatever changes may thereby be made
necessary in the Registration Statement or Prospectus or in any other documents
or arrangements, and the Guarantor and the Trust agree to promptly file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective aggregate principal
amount of Securities which the non-defaulting Underwriters or substituted
purchaser or purchasers shall thereafter be obligated to purchase shall be taken
as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Guarantor and the Trust or the non-defaulting Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 7 shall be without liability on the part of
the non-defaulting Underwriters or the Guarantor or the Trust, other than as
provided in Sections 6 and 9.
8. Survival of Indemnities, Representations, Warranties, etc. The
----------------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Guarantor and the Trust and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Guarantor or the Trust, or any officer or director or controlling person of the
Guarantor or the Trust, and shall survive delivery of and payment for the
Securities.
9. Termination. If this Agreement shall be terminated by the
-----------
Underwriters, because of any failure or refusal on the part of the Guarantor or
the Trust to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Guarantor or the Trust shall be unable to
perform its obligations under this Agreement, the respective indemnities shall
remain in full force and effect and the Guarantor or the Trust will reimburse
the Underwriter or such Underwriters as have so terminated this Agreement with
respect to themselves for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by them in connection with
the transactions contemplated by this Agreement.
10. Notices. In all dealings hereunder, you shall act on behalf of
-------
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and (i) if to the Underwriters shall be delivered or sent by mail,
telex or facsimile
20
<PAGE>
transmission to you in care of Goldman, Sachs & Co., 85 Broad Street, New York,
New York 10004, Attention: Registration Department; (ii) if to the Guarantor
shall be delivered or sent by mail, telex or facsimile transmission to the
Guarantor in care of Houston Industries Incorporated, 1111 Louisiana, Houston,
Texas 77002, Attention, Assistant Treasurer; and (iii) if to the Trust shall be
delivered or sent by mail, telex or facsimile transmission to the Trust, 200
West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
11. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Guarantor and the Trust and their
respective successors and the directors, trustees, officers and controlling
persons referred to in Section 6 of this Agreement. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be, and being, for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Guarantor and the Trust contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of the Act or the Exchange Act, and the representations, warranties,
covenants, agreements and indemnities of the several Underwriters shall also be
for the benefit of each Trustee, each director of the Guarantor, each person who
has signed the Registration Statement and the person or persons, if any, who
control the Guarantor and the Trust within the meaning of the Act.
12. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York.
13. Counterparts. This Agreement may be executed by any one or more
------------
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Guarantor and the Trust. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Guarantor and the Trust for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
HL&P Capital Trust ___
By: Houston Lighting & Power Company, as Depositor
By:
-------------------------------------------------
Name:
Title:
Houston Lighting & Power Company
By:
-------------------------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By:
---------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
22
<PAGE>
SCHEDULE I
Liquidation
Amount of
Securities
to be
Underwriters Purchased
------------ ---------
Goldman, Sachs & Co. ........................................... $
Merrill Lynch, Pierce, Fenner & Smith Incorporated..............
Total................................................. [$ ]
23
<PAGE>
Exhibit 1.3
HL&P CAPITAL TRUST _____
____% Trust Preferred Securities, Series ___
guaranteed to the extent set forth in the Guarantee by
Houston Lighting & Power Company
-------------------------------------
Underwriting Agreement
----------------------
__________ __, 19__
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
HL&P Capital Trust ____, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), and Houston Lighting & Power Company, a
Texas corporation, as depositor of the Trust and as guarantor (the "Guarantor"),
propose, subject to the terms and conditions stated herein, that the Trust issue
and sell to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
aggregate of [$___________] liquidation amount of ______% Cumulative Trust
Preferred Securities, Series ___ (liquidation amount $25 per capital security)
(the "Securities") representing undivided beneficial interests in the assets of
the Trust, guaranteed by the Guarantor as to the payment of distributions, and
as to payments on liquidation or redemption, to the extent set forth in a
guarantee agreement (the "Guarantee") among the Guarantor and The Bank of New
York, as trustee (the "Guarantee Trustee"). The proceeds of the sale of the
Securities and an aggregate of [$__________] liquidation amount of its Common
Securities (liquidation amount $25 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Debentures,
Series ___ (the "Subordinated Debentures") of the Guarantor to be issued
pursuant to an Indenture (the "Indenture") among the Guarantor and The Bank of
New York, as trustee (the "Debenture Trustee").
1. Representations and Warranties of the Guarantor and the Trust.
(a) The Guarantor and the Trust jointly and severally represent and warrant to,
and agree with, each of the Underwriters that:
<PAGE>
(i) A registration statement on Form S-3 with respect to the
Securities, the Subordinated Debentures and the Guarantee (File
Nos. 333-____ and 333-____) including a prospectus (any preliminary
prospectus included in such registration statement being hereinafter
referred to as a "Preliminary Prospectus"), copies of which have
been delivered to you, has been prepared and filed by the Guarantor
and the Trust with the Securities and Exchange Commission (the
"Commission") and has been declared effective under the Securities
Act of 1933, as amended (the "Act"). No stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or, to the best
knowledge of the Guarantor and the Trust, threatened by the
Commission. Such registration statement (including all documents
filed as part thereof or incorporated by reference therein, but
excluding any Forms T-1, as amended), as amended and supplemented at
the date of this Agreement is hereinafter referred to as to the
"Registration Statement." The Prospectus contained in the
Registration Statement at the time that the Registration Statement
was declared effective is hereinafter referred to as the "Basic
Prospectus."
The prospectus included in the Registration Statement, as amended
and supplemented to the date of this Agreement (including all
documents then incorporated by reference therein and including the
Preliminary Supplemented Prospectus (hereinafter defined) as further
supplemented by the Final Supplemented Prospectus (hereinafter
defined)), is hereinafter referred to as the "Prospectus". Any
reference herein to the Registration Statement, the Prospectus, a
Preliminary Prospectus, the Basic Prospectus, the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein, or deemed to be incorporated by reference
therein, and filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the date of such
Registration Statement, Prospectus, Preliminary Prospectus, the
Basic Prospectus, the Preliminary Supplemented Prospectus or the
Final Supplemented Prospectus. Any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to
and include, without limitation, the filing of any document under
the Exchange Act deemed to be incorporated therein by reference
after the date of such Registration Statement or Prospectus.
A prospectus supplement, dated, subject to completion,
January __, 1997, as supplemented and amended, is hereinafter called
the "Preliminary Supplemented Prospectus". A prospectus supplement,
dated the date hereof, setting forth the terms of the Securities and
of their sale and distribution (the "Final Supplemented Prospectus")
has been prepared and will be filed pursuant to Rule 424(b) under
the Act ("Rule 424(b)").
2
<PAGE>
(ii) On the effective date of the Registration Statement, the
Registration Statement, as amended and supplemented at that time,
conformed in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "TIA"), and the
applicable rules and regulations of the Commission thereunder, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading; on the date of the
Preliminary Supplemented Prospectus, the Preliminary Supplemented
Prospectus conformed in all material respects to the requirements of
the Act and the TIA and the applicable rules and regulations of the
Commission thereunder, and did not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; and on the date of this Agreement, the Registration
Statement and the Prospectus conform, and at the Time of Delivery
(hereinafter defined) they will conform, in all material respects to
the requirements of the Act and the TIA and the applicable rules and
regulations of the Commission thereunder, and on the date of this
Agreement do not, and on the Time of Delivery will not, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading;
(iii) Each document filed or to be filed pursuant to the Exchange Act
and incorporated by reference, or deemed to be incorporated by
reference in the Prospectus (including any document to be filed
pursuant to the Exchange Act which will constitute an amendment to
the Prospectus) conformed or, when so filed, will conform in all
material respects to the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, and
none of such documents included or, when so filed, will include any
untrue statement of a material fact or omitted or, when so filed,
will omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iv) The Trust has been duly created and is validly existing as a
business trust in good standing under the laws of the State of
Delaware, with power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus
and, based on expected operations and law in effect on the date
hereof, the Trust will be classified as a grantor trust and will
not be classified as an association taxable as a corporation for
United States federal income tax purposes;
(v) This Agreement has been duly authorized, executed and delivered by
the Guarantor and the Trust;
(vi) The Securities have been duly authorized by the Trust Agreement,
and, when issued and delivered pursuant to this Agreement, such
3
<PAGE>
Securities will be duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust entitled
to the benefits provided by the Amended and Restated Trust Agreement
(the "Trust Agreement") among the Guarantor and the Trustees named
therein (the "Trustees") (subject to the terms of the Trust
Agreement); provided that the holders of securities ("the
Securityholders") may be obligated, pursuant to the Trust Agreement,
to (a) provide indemnity and/or security in connection with and pay
taxes or governmental charges arising from transfers or exchanges of
Securities certificates and the issuance of replacement Securities
certificates and (b) provide security and indemnity in connection
with requests of or directions to the Property Trustee (as defined
in the Trust Agreement) to exercise its rights and remedies under
the Trust Agreement; and the Securities conform to the description
thereof contained in the Final Supplemented Prospectus;
(vii) The Securityholders will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware;
(viii) The Common Securities of the Trust have been duly authorized
by the Trust Agreement, and upon delivery by the Trust to the
Guarantor against payment therefor as set forth in the Trust
Agreement, will be duly and validly issued and undivided beneficial
interests in the assets of the Trust and conform to the description
thereof contained in the Final Supplemented Prospectus; the issuance
of the Common Securities of the Trust is not subject to preemptive
or other similar rights; and at the Time of Delivery, all of the
issued and outstanding Common Securities of the Trust will be
directly owned by the Guarantor free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(ix) The Guarantee, the Trust Agreement, the Subordinated Debentures,
the Indenture and the Agreement as to Expenses and Liabilities
between the Guarantor and the Trust (the "Expense Agreement") (the
Guarantee, the Trust Agreement, the Subordinated Debentures, the
Indenture and the Expense Agreement being collectively referred to
as the "Guarantor Agreements") have each been duly authorized by the
Guarantor and when validly executed and delivered by the Guarantor
and, in the case of the Guarantee, by the Guarantee Trustee, in the
case of the Trust Agreement, by the Trustees and, in the case of the
Indenture, by the Debenture Trustee, and, in the case of the
Subordinated Debentures, when validly issued by the Guarantor and
duly authenticated and delivered by the Debenture Trustee, will
constitute valid and legally binding obligations of the Guarantor
and the respective trustees, enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or
4
<PAGE>
affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); the Subordinated Debentures when
validly issued by the Guarantor and duly authenticated and delivered
by the Deberture Trustee, will be entitled to the benefits of the
Indenture; and the Guarantor Agreements conform to the descriptions
thereof in the Final Supplemented Prospectus;
(x) The issue and sale of the Securities by the Trust, the compliance
by the Trust with all of the provisions of this Agreement, the
Securities and the Trust Agreement, the purchase of the Subordinated
Debentures by the Trust, the execution, delivery and performance by
the Trust of the Trust Agreement and the consummation of the
transactions contemplated herein and therein will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Trust is a party or by which the Trust is bound or to which any of
the property or assets of the Trust is subject, nor will such action
result in any violation of the provisions of the Trust Agreement or
any existing statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Trust or
any of its properties; the Commission has issued an order under the
Act declaring the Registration Statement effective and qualifying
the Guarantee, the Trust Agreement and the Indenture under the TIA
and no other consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Securities and the
Common Securities by the Trust, the purchase of the Subordinated
Debentures by the Trust or the consummation by the Trust of the
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriters;
(xi) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all of
the provisions of this Agreement, the Guarantee, the Subordinated
Debentures, the Trust Agreement, the Indenture and the Expense
Agreement, the execution, delivery and performance by the Guarantor
of the Guarantor Agreements, and the consummation of the
transactions contemplated herein and therein will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument for borrowed
money to which the Guarantor or any Significant Subsidary ( as
defined by Regulation S-X) is a party or by which the Guarantor or
any Significant Subsidiary is bound or to which any of the property
or assets of the Guarantor or any Significant Subsidiary is subject,
nor will such action result in any violation of the provisions of
the Restated Articles of Incorporation or Amended and Restated By-
laws of the Guarantor or any existing statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Guarantor or any of its or its Significant
Subsidiaries' properties; the Commission has issued an order under
the Act declaring the Registration Statement effective and
qualifying the Guarantee, the Trust Agreement and the Indenture
under the TIA
5
<PAGE>
and no other consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue of the Guarantee or the Subordinated
Debentures or the consummation by the Guarantor of the other
transactions contemplated by this Agreement or the Guarantor
Agreements, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the issuance by the
Guarantor of the Guarantee and the Subordinated Debentures;
(xii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
2. Sale and Delivery. (a) Subject to the terms and conditions
-----------------
herein set forth, the Guarantor and the Trust agree to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Trust, at a purchase price of 100% of the
liquidation amount thereof, the liquidation amount of Securities set forth
opposite the name of such Underwriters in Schedule I hereto.
(b) As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be issued by the Trust to purchase the Subordinated Debentures
of the Guarantor, the Guarantor hereby agrees to pay at the Time of Delivery to
Goldman, Sachs & Co., for the accounts of the several Underwriters, an amount
equal to $[ ] per Security for the Securities to be delivered at the Time of
Delivery by wire transfer of Federal (same-day) funds. The total aggregate
amount of the Underwriters' compensation is $_______________.
(c) Except as set forth in the next paragraph, the Securities to be
purchased by each Underwriter hereunder will be represented by one or more
definitive global Securities in book-entry form which will be deposited by or on
behalf of the Trust with The Depository Trust Company ("DTC") or its designated
custodian. The Trust will deliver the Securities to Goldman, Sachs & Co., for
the account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal (same
day) funds to a commercial bank account located in the United States and
designated in writing at least forty-eight hours prior to the Time of Delivery
by the Guarantor to Goldman, Sachs & Co., by causing DTC to credit the
Securities to the account of Goldman, Sachs & Co. at DTC. The Trust will cause
the global certificates representing the Securities to be made available to
Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on ________ __, 19__ or such other time and date as Goldman,
Sachs & Co. and the Guarantor may agree upon in writing. Such time and date are
herein called the "Time of Delivery".
6
<PAGE>
(d) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 5 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 5(k) hereof, will be delivered at such time and
date at the offices of Dewey Ballantine, 1301 Avenue of the Americas, New York,
New York 10019 or such other location as Goldman Sachs & Co. and the Guarantor
may agree in writing (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 1:00 p.m., New York City time or at such
other time as the Goldman, Sachs & Co. and the Guarnator may agree in writing ,
on the New York Business Day next preceding the Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 2, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
3. Covenants and Agreements. The Guarantor and the Trust jointly
------------------------
and severally covenant and agree with each of the Underwriters:
(a) That the Guarantor will furnish without charge to the
Underwriters a copy of the Registration Statement, including all documents
incorporated by reference therein and exhibits filed with the Registration
Statement (other than exhibits which are incorporated by reference and have
previously been so furnished), and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, the Preliminary Supplemented Prospectus
and the Final Supplemented Prospectus, any documents incorporated by reference
therein at or after the date thereof (including documents from which information
has been so incorporated) and any supplements and amendments thereto as each
Underwriter may reasonably request so long as such Underwriter is required to
deliver a prospectus;
(b) That the Guarantor will cause the Final Supplemented Prospectus
to be filed pursuant to, and in compliance with, Rule 424(b) and will promptly
advise the Underwriters (i) when any amendment to the Registration Statement
shall have been filed; provided, that, with respect to documents filed pursuant
--------
to the Exchange Act and incorporated by reference into the Registration
Statement, such notice shall only be required during such time as the
Underwriters are required in the reasonable opinion of Dewey Ballantine, counsel
for the Underwriters, to deliver a prospectus, (ii) of any request by the
Commission for any amendment of the Registration Statement, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that
7
<PAGE>
purpose, and (iv) of the receipt by the Guarantor or the Trust of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. So long as any Underwriter is required in the
reasonable opinion of Dewey Ballantine to deliver a prospectus, the Guarantor
will not file any amendment to the Registration Statement or supplement to the
Prospectus unless the Guarantor has furnished one copy of such amendment or
supplement to Goldman, Sachs & Co. and to Dewey Ballantine, and, if such
amendment or supplement is to be filed on or prior to the Time of Delivery, or
under circumstances where the Underwriters are required in the reasonable
opinion of Dewey Ballantine, to deliver a Prospectus, the Underwriters or Dewey
Ballantine, shall not reasonably have objected thereto. If the Commission shall
issue a stop order suspending the effectiveness of the Registration Statement,
the Guarantor will take such steps to obtain the lifting of that order as in the
best judgment of the Guarantor are not contrary to the interests of the
Guarantor;
(c) That if, at any time when in the reasonable opinion of Dewey
Ballantine the Prospectus is required by law to be delivered by an Underwriter
or a dealer, any event shall occur as a result of which it is necessary, in the
reasonable opinion of Dewey Ballantine or counsel for the Guarantor, to amend or
supplement the Prospectus or modify the information incorporated by reference
therein in order to make the statements therein, in light of the circumstances
existing when the Prospectus is delivered to a purchaser, not misleading, or if
it shall be necessary in the reasonable opinion of any such counsel, to amend or
supplement the Prospectus or modify such information to comply with law, the
Guarantor will forthwith (i) prepare and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses the Underwriters will
furnish to the Guarantor) to whom Securities may have been sold by the
Underwriters and to any other dealers upon reasonable request, either amendments
or supplements to the Prospectus or (ii) file with the Commission documents
incorporated by reference in the Prospectus, which shall be so supplied to the
Underwriters and such dealers, in either case so that the statements in the
Prospectus as so amended, supplemented or modified will not, in light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;
(d) That the Guarantor will endeavor to qualify, at its expense, the
Securities, and, to the extent required or advisable, the Guarantee and the
Junior Subordinated Notes, for offer and sale under the securities or Blue Sky
laws of such jurisdictions as the Underwriters shall reasonably request and to
pay all filing fees, reasonable expenses and legal fees in connection therewith
and in connection with the determination of the eligibility for investment of
the Securities; provided, that the Guarantor shall not be required to qualify as
--------
a foreign corporation or a dealer in securities or to file any consents to
service of process under the laws of any jurisdiction;
(e) That the Guarantor will make generally available to its security
holders and the Securityholders as soon as practicable an earnings statement of
the Guarantor covering a twelve-month period beginning after the Time of
Delivery which shall satisfy the provisions of Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including Rule 158 under the
Act).
8
<PAGE>
(f) That during the period beginning on the date of this Agreement
and continuing to and including the Time of Delivery, the Guarantor and the
Trust will not offer, sell, contract to sell or otherwise dispose of any
Securities, any security convertible into or exchangeable into or exercisable
for Securities or Subordinated Debentures or any debt securities substantially
similar to the Subordinated Debentures or equity securities substantially
similar to the Securities (except for the Subordinated Debentures and the
Securities issued pursuant to this Agreement), without the prior written consent
of the Underwriters.
(g) That the Guarantor and the Trust will use best efforts to effect
the listing of the Securities on the New York Stock Exchange; if the Securities
are exchanged for Subordinated Debentures, the Guarantor will use its best
efforts to effect the listing of the Subordinated Debentures on any exchange on
which the Securities are then listed.
4. Expenses. The Guarantor and the Trust jointly and severally
--------
covenant and agree with the several Underwriters that the Guarantor and the
Trust will pay or cause to be paid the following: (i) all expenses in connection
with the preparation, printing and filing of the Registration Statement as
originally filed and of each amendment thereto; (ii) the fees, disbursements and
expenses of the Guarantor's or the Trust's counsel and accountants in connection
with the issue of the Securities and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the Prospectus,
the Preliminary Supplemented Prospectus, the Final Supplemented Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (iii) all reasonable expenses in
connection with the qualification of the Securities, the Guarantees and the
Subordinated Debentures issuable upon exchange of the Securities, for offering
and sale under state securities laws as provided in Section 3(d) hereof,
including the reasonable fees and disbursements of counsel for the Underwriters
in connection with such qualification and in connection with the Blue Sky and
legal investment surveys; (iv) any fees charged by securities rating services
for rating the Securities and the Subordinated Debentures; (v) the cost of
preparing the Securities and the Subordinated Debentures; (vi) the fees and
expenses of the Trustees, the Guarantee Trustee and the Debenture Trustee and
any agent of the Trustees, the Guarantee Trustee and the Debenture Trustee and
the fees and disbursements of counsel for the Trustees in connection with the
Trust Agreement and the Securities, counsel for the Guarantee Trustee in
connection with the Guarantee and counsel for the Debenture Trustee in
connection with the Indenture and the Subordinated Debentures; (vii) the fees
and disbursements of Delaware counsel to the Trust; (viii) the fees and expenses
incurred in connection with the listing of the Securities and, if applicable,
the Junior Subordinated Notes on the New York Stock Exchange; and (ix) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 6
and 9 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel and any advertising expenses connected with
any offers they may make.
5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriter hereunder shall be subject to the accuracy, at and (except as
otherwise stated herein) as of the date hereof and at and as of the Time of
Delivery, of the
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representations and warranties made herein by the Guarantor and the Trust, to
compliance at and as of the Time of Delivery by the Guarantor and the Trust with
their covenants and agreements herein contained and the other provisions hereof
to be satisfied at or prior to the Time of Delivery, and to the following
additional conditions:
(a) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose
shall be pending before or threatened by the Commission, and the Underwriters
shall have received on and as of the Time of Delivery, a certificate dated such
date, signed by an executive officer of the Guarantor or an authorized agent of
the Guarantor designated as such by the Board of Directors of the Guarantor to
the foregoing effect, and (ii) there shall have been no material adverse change
in or affecting the business, properties or financial condition of the Guarantor
or the Trust from that set forth in or contemplated by the Registration
Statement at the time it became effective, except as set forth in or
contemplated by the Prospectus, and the Underwriters shall have received on and
as of the Time of Delivery, a certificate dated such date, signed by an
executive officer of the Guarantor or an executive officer of Houston Industries
Incorporated ("Houston Industries") to the foregoing effect. The officers or
agents making such certificates may rely upon the best of his knowledge as to
proceedings pending or threatened.
(b) Dewey Ballantine, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters. In giving such opinion, such counsel may
rely (i) as to matters of Texas law and the exemption of Houston Industries
under the 1935 Act (as defined herein) upon the opinions of Baker & Botts L.L.P.
referred to in (d) below and Hugh Rice Kelly or such other counsel referred to
in (c) below and (ii) as to matters of Delaware law upon the opinion of
Richards, Layton & Finger referred to in (e) below.
(c) Hugh Rice Kelly, Senior Vice President, General Counsel, and
Corporate Secretary for the Guarantor, shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Guarantor has been duly incorporated and is validly existing
in good standing under the laws of the State of Texas and has
corporate power and authority to enter into and perform its
obligations under this Agreement and the Guarantor Agreements;
(ii) No consent, approval, authorization or other order of, or
registration with, any governmental regulatory body (other than
such as may be required under applicable securities laws, as to
which such counsel need not express an opinion) is required for
the issuance and sale of the Securities being delivered at the
Time of Delivery or the issuance of the Guarantee and the
Subordinated Debentures or the consummation by the Trust or the
Guarantor of the transactions contemplated by this Agreement and
the Guarantor Agreements;
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(iii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which
Guarantor is subject, which, individually or in the aggregate,
are expected to have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Guarantor;
(iv) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures and the execution, delivery and
performance by the Guarantor of this Agreement and the
Guarantor Agreements will not result in the breach or violation
of, or constitute a default under, the Restated Articles of
Incorporation or the Amended and Restated Bylaws of the
Guarantor, each as amended to date, any indenture, mortgage,
deed of trust or other agreement or instrument for borrowed
money to which the Guarantor is a party or by which it is bound
or to which its property is subject or any law, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Guarantor or its property, in any manner
which would have a material adverse effect on the business of
the Guarantor; and
(v) The description of statutes and regulations set forth in Part I
of the Guarantor's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 under the captions "Business--
Regulatory Matters -- Rates and Services" and "-- Environmental
Quality" fairly describe in all material respects the portions
of the statutes and regulations addressed thereby.
(d) Baker & Botts L.L.P., counsel for the Guarantor and the
Trust, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) Such counsel does not know of any contracts or documents of a
character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed;
(ii) The statements set forth in the Final Supplemental Prospectus
under the captions "Description of Capital Securities",
"Description of Junior Subordinated Debentures", "Description
of Guarantees", "The Expense Agreement" and "Relationship Among
the Capital Securities, the Corresponding Junior Subordinated
Debentures, the Expense Agreement and the Guarantees",
accurately summarize in all material respects the terms of the
Securities, the Trust Agreement, the Subordinated Debentures,
the Expense Agreement and the Guarantee, and the statements
under the caption "Certain ERISA Considerations" insofar as
they purport to describe the provisions of the laws and
regulations referred to therein are accurate summaries in all
material respects thereof;
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(iii) The Securities, the Subordinated Debentures and the Guarantee
conform as to legal matters in all material respects to the
descriptions thereof contained in the Final Supplemented
Prospectus under the captions "Certain Terms of Series ___
Capital Securities", "Certain Terms of Series ___ Subordinated
Debentures", and "Certain Terms of Series ___ Guarantee" and in
the Basic Prospectus under the captions "Description of Junior
Subordinated Debentures", "Description of Securities",
"Description of Guarantees", and "Relationship Among
Securities, The Corresponding Junior Subordinated Debentures,
The Expense Agreement and The Guarantees", respectively;
(iv) The Subordinated Debentures are in the form prescribed in or
pursuant to the Indenture, have been duly and validly
authorized by all necessary corporate action on the part of the
Guarantor and, when executed and delivered by the Guarantor and
authenticated by the Trustee as specified in or pursuant to the
Indenture, will be valid and binding obligations of the
Guarantor, enforceable in accordance with their terms, except
as such enforceability is subject to the effect of any
applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law); the Guarantee has been duly and validly authorized by all
necessary corporate action on the part of the Guarantor; the
Guarantee has been duly and validly executed and delivered by
the Guarantor and (assuming due authorization, execution and
delivery by the Trustee thereunder) constitutes the valid and
binding obligation of the Guarantor, enforceable in accordance
with its terms, except as such enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization
or other law relating to or affecting creditors' rights
generally and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law); the Trust Agreement, the Indenture and the
Expense Agreement have each been duly authorized, executed and
delivered by the Guarantor and, when executed and delivered by
the other parties thereto, will constitute valid and binding
obligations of the Guarantor, enforceable in accordance with
their respective terms, except as such enforceability is
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting creditors'
rights generally and to general principles of equity
(regardless of whether such enforceability is considered in
proceeding in equity or at law);
(v) The Guarantee, the Trust Agreement and the Indenture have been
duly qualified under the TIA;
(vi) Based upon the timely filing by Houston Industries with the
Commission of an exemption statement pursuant to Rule 2 under
the Public Utility Holding Company Act of 1935 ("1935 Act")
which, to the best of the
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knowledge of such counsel, is not the subject of any
notification provided for in Rule 6 under the 1935 Act, Houston
Industries is exempt from the provisions of the 1935 Act except
Sections 9(a)(2), 32 and 33 thereof;
(vii) The Trust is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or
an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act (in giving such
opinion counsel may reference specified "no-action" letters);
(viii) The Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceedings for that
purpose have been instituted and are pending or are threatened
by the Commission under the Act; the Registration Statement, as
of its effective date, and the Final Supplemented Prospectus,
as of ________ ___, 19__, (except for (A) the operating
statistics, financial statements and financial statement
schedules contained or incorporated by reference therein or
omitted therefrom (including the auditors' reports on the
financial statements and the notes to the financial
statements), (B) the other financial and statistical
information contained or incorporated by reference therein or
omitted therefrom and (C) the exhibits thereto, as to which
such counsel need not express an opinion) complied as to form
in all material respects with the requirements of Form S-3
under the Act and the applicable rules and regulations of the
Commission thereunder, and each document incorporated by
reference therein as originally filed pursuant to the Exchange
Act (except for (A) the operating statistics, financial
statements and financial statement schedules contained or
incorporated by reference therein or omitted therefrom
(including the auditors' reports on the financial statements
and the notes to the financial statements), (B) the other
financial and statistical information contained or incorporated
by reference therein or omitted therefrom and (C) the exhibits
thereto, as to which such counsel need not express an opinion)
when so filed complied as to form in all material respects with
the Exchange Act and the applicable rules and regulations of
the Commission thereunder; and
(ix) The execution, delivery and performance by the Guarantor of
this Agreement have been duly authorized by all necessary
corporate action on the part of the Guarantor, and this
Agreement has been duly executed and delivered by the
Guarantor.
In addition, such counsel shall state that no facts have come to the
attention of such counsel that lead them to believe that the Registration
Statement (except for (A) the operating statistics, financial statements and
financial statement schedules contained or incorporated by reference therein
(including
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the auditors' reports on the financial statements and the notes to the financial
statements, except to the extent that such notes describe legal or governmental
proceedings to which the Company is a party and are incorporated by reference
into one or more items of a report that is incorporated by reference in the
Registration Statement or the Prospectus, other than an item that requires that
financial statements be provided), (B) the other financial and statistical
information contained or incorporated by reference therein and (C) the exhibits
thereto, as to which such counsel need not comment) as of the time such
Registration Statement became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, as amended, supplemented or modified by the filing of a document
incorporated by reference therein if so amended, supplemented or modified
(except for (A) the operating statistics, financial statement and financial
statement schedules contained or incorporated by reference therein (including
the auditors' reports on the financial statements and the notes to the financial
statements, except to the extent that such notes describe legal or governmental
proceedings to which the Guarantor is a party and are incorporated by reference
into one or more items of a report that is incorporated by reference in the
Prospectus, other than an item that requires that financial statements be
provided), (B) the other financial and statistical information contained or
incorporated by reference therein and (C) the exhibits thereto, as to which such
counsel need not comment), as of the date of the Final Supplemented Prospectus
contained, or as of the Time of Delivery contains, any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(e) Richards, Layton & Finger, special Delaware counsel for the
Guarantor and the Trust, shall have furnished to you their written opinion,
dated the Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust
Act, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of
the Trust as a business trust have been made;
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the trust power and authority to own property and
conduct its business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally binding
obligation of the Guarantor and the Trustees, and is
enforceable against the Guarantor and the Trustees, in
accordance with its terms, subject, as to enforcement, to the
effect upon the Trust Agreement of (i) bankruptcy, insolvency,
fraudulent transfer and conveyance, reorganization, moratorium,
receivership, liquidation and similar laws of general
applicability relating to or affecting creditors' rights,
(ii) principles of equity, including applicable law relating to
fiduciary duties,
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and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution;
(iv) Under the Delaware Business Trust Act, the Original Trust
Agreement (as defined in the Trust Agreement) and the Trust
Agreement, the Trust has the trust power and authority to
(a) execute and deliver, and to perform its obligations under
this Agreement and (b) issue and perform its obligations under
the Securities and the Common Securities;
(v) Under the Delaware Business Trust Act, the Original Trust
Agreement and the Trust Agreement, the execution and delivery
by the Trust of this Agreement, and the performance by the
Trust of its obligations hereunder, have been duly authorized
by all necessary trust action on the part of the Trust;
(vi) Under the Delaware Business Trust Act,the Original Trust
Agreement and the Trust Agreement, the Agreement has been duly
executed by the Trust;
(vii) The Securities have been duly authorized by the Trust Agreement
and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and
are entitled to the benefits provided by the Trust Agreement
(subject to the terms of the Trust Agreement); provided that
such counsel may note that the Securityholders may be
obligated, pursuant to the Trust Agreement, to (a) provide
indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of
Capital Securities Certificates and the issuance of replacement
Capital Securities Certificates and (b) provide security and
indemnity in connection with requests of or directions to the
Property Trustee (as defined in the Trust Agreement) to
exercise its rights and remedies under the Trust Agreement. The
Securityholders, as beneficial owners of the Trust, are
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware;
(viii) The Common Securities of the Trust have been duly authorized by
the Trust Agreement and are validly issued and fully paid
undivided beneficial interests in the assets of the Trust;
(ix) Under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Securities and the Common Securities is not
subject to preemptive rights;
(x) The issuance and sale by the Trust of the Securities and the
Common Securities, the execution, delivery and performance by
the Trust of this Agreement, the consummation by the Trust of
the transactions contemplated by this Agreement and the Trust
Agreement and compliance by the Trust with its obligations
thereunder do not violate (a) any of the provisions of the
Certificate of Trust of the Trust or the Trust Agreement, or
(b) any applicable Delaware law or administrative regulation;
(xi) Such counsel has reviewed the statements in the Basic
Prospectus under the caption "The Issuers" and the statements
in the Preliminary
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Supplemented Prospectus and Final Supplemented Prospectus under
the caption "HL&P Capital Trust ___" and, insofar as they
contain statements of Delaware law, such statements are fairly
presented;
(xii) No authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely in connection with
the issuance and sale of the Securities and the Common
Securities. (In rendering the opinion expressed in this
paragraph (xii), such counsel need express no opinion
concerning the securities laws of the State of Delaware.); and
(xiii) Assuming that (i) the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the
filing of documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, and (ii) the
Trust is treated as a grantor trust for federal income tax
purposes, the Securityholders (other than those holders of the
Securities who reside or are domiciled in the State of
Delaware) will have no liability for income taxes imposed by
the State of Delaware solely as a result of their participation
in the Trust, and the Trust will not be liable for any income
tax imposed by the State of Delaware.
(f) Baker & Botts L.L.P., special tax counsel for the Guarantor
and the Trust, shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that such
firm confirms its opinion set forth in the Final Supplemented Prospectus under
the caption "Certain Federal Income Tax Consequences".
(g) At the time of execution of this Agreement, Deloitte & Touche
LLP shall have furnished to you a letter dated the date of such execution,
substantially in the form heretofore supplied and deemed satisfactory to you.
(h) At the Time of Delivery, Deloitte & Touche LLP shall have
furnished you a letter, dated the Time of Delivery, to the effect that such
accountants reaffirm, as of the Time of Delivery and as though made on the Time
of Delivery, the statements made in the letter furnished by such accountants
pursuant to paragraph (g) of this Section 5, except that the specified date
referred to in such letter will be a date not more than five business days prior
to the Time of Delivery.
(i) A Special Event (as defined in the Final Supplemented
Prospectus, except that the reference to effectiveness or announcement on or
after the date of issuance of the Securities shall be deemed a reference to
effectiveness or announcement on or after the date of this Agreement) shall not
have occurred and be continuing.
(j) The Guarantor and the Trust shall have furnished or caused to
be furnished to you at the Time of Delivery certificates of officers of the
Guarantor and of administrators of the Trust satisfactory to you as to the
accuracy of the representations and warranties of the Guarantor and the Trust
herein at and as of the Time of Delivery, as to the performance by the Guarantor
and the Trust of all of their respective obligations hereunder to be performed
at or prior to the Time of Delivery, as to the matters set forth
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in the introductory paragraph to this Section 5 and subsection (a) of this
Section and as to such other matters as you may reasonably request.
6. Indemnification and Contribution. (a) The Guarantor and the
--------------------------------
Trust, jointly and severally, agree to indemnify and hold harmless each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of the Act or the Exchange Act, against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefore and counsel fees incurred in connection
therewith), joint or several, which may be based upon either the Act, or the
Exchange Act, or any other statute or at common law, on the ground or alleged
ground that any Preliminary Supplemented Prospectus, Final Supplemented
Prospectus, Preliminary Prospectus, the Registration Statement, the Basic
Prospectus or the Prospectus (or any such document, as from time to time
amended, or deemed to be amended, supplemented or modified) includes or
allegedly includes an untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Guarantor or the Trust by any Underwriter through Goldman, Sachs & Co.
specifically for use in the preparation thereof; provided that in no case is the
Guarantor or the Trust to be liable with respect to any claims made against any
Underwriter or any such controlling person unless such Underwriter or such
controlling person shall have notified the Guarantor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Underwriter or such controlling person, but failure to notify the Guarantor or
Trust of any such claim shall not relieve it from any liability which it may
have to such Underwriter or such controlling person otherwise than on account of
the indemnity agreement contained in this paragraph; and provided, further, that
the foregoing indemnity with respect to the Preliminary Prospectus, the Basic
Prospectus, the Prospectus, the Preliminary Supplemented Prospectus and the
Final Supplemented Prospectus shall not inure to the benefit of any Underwriter
if a copy of the Preliminary Prospectus, the Basic Prospectus, the Prospectus,
the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus as
amended or supplemented, had not been sent or given by or on behalf of such
Underwriter to the person asserting any such losses, claims, damages or
liabilities concurrently with or prior to delivery of the written confirmation
of the sale of Securities to such person and the untrue statement or omission of
a material fact contained in any such Preliminary Prospectus, Basic Prospectus,
Prospectus, Preliminary Supplemented Prospectus or Final Supplemented Prospectus
was corrected in the Preliminary Prospectus, Basic Prospectus, Prospectus,
Preliminary Supplemented Prospectus or Final Supplemented Prospectus, as amended
or supplemented.
The Guarantor and the Trust will be entitled to participate at their
own expense in the defense, or, if they so elect, to assume the defense of any
suit brought to enforce any such liability, but, if the Guarantor or the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it. In the event that the Guarantor or the Trust elects to assume the
defense of any such suit and retains such counsel, the Underwriter or
Underwriters or controlling person or persons, defendant or defendants in the
suit, may retain additional counsel but shall bear the fees and expenses of such
counsel unless (i) the Guarantor or the Trust shall have specifically
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authorized the retaining of such counsel or (ii) the parties to such suit
include the Underwriter or Underwriters or controlling person or persons and the
Underwriter or Underwriters or controlling person or persons have been advised
by such counsel that one or more legal defenses may be available to it or them
which may not be available to the Guarantor or the Trust, in which case the
Guarantor or the Trust shall not be entitled to assume the defense of such suit
on behalf of such Underwriter or Underwriters or controlling person or persons,
notwithstanding their obligation to bear the reasonable fees and expenses of
such counsel, it being understood, however, that the Guarantor and the Trust
shall not, in connection with any one such suit or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such Underwriters and their controlling persons, which firm shall
be designated in writing by Goldman, Sachs & Co. The Guarantor and the Trust
shall not be liable to indemnify any person for any settlement of any such claim
effected without the Guarantor's or the Trust's consent. This indemnity
agreement will be in addition to any liability which the Guarantor and the Trust
might otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the
Guarantor and the Trust, each of the Guarantor's directors, each of the
Guarantor's officers who have signed the Registration Statement, each of the
Trustees who have signed the Registration Statement and each person, if any, who
controls the Guarantor and the Trust within the meaning of the Act or the
Exchange Act, against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which may be based upon the Act, or any other statute or at common law, on the
ground or alleged ground that any Preliminary Supplemented Prospectus, Final
Supplemented Prospectus, Preliminary Prospectus, the Registration Statement, the
Basic Prospectus or the Prospectus (or any such document, as from time to time
amended, or deemed to be amended, supplemented or modified) includes or
allegedly includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon, and in conformity with, written information
furnished to the Guarantor or the Trust by such Underwriter through Goldman
Sachs & Co. specifically for use in the preparation thereof; provided that in no
case is such Underwriter to be liable with respect to any claims made against
the Guarantor or the Trust or any such director, officer, trustee or controlling
person unless the Guarantor or the Trust or any such director, officer, trustee
or controlling person shall have notified such Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Guarantor
or the Trust or any such director, officer, trustee or controlling person, but
failure to notify such Underwriter of any such claim shall not relieve it from
any liability which it may have to the Guarantor or the Trust or any such
director, officer, trustee or controlling person otherwise than on account of
the indemnity agreement contained in this paragraph. Such Underwriter will be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such defense shall be conducted
by counsel chosen by it. In the event that such Underwriter elects to assume the
defense of any such suit and retain such counsel,
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the Guarantor or the Trust or such director, officer, trustee or controlling
person, defendant or defendants in the suit, may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) such Underwriter
shall have specifically authorized the retaining of such counsel or (ii) the
parties to such suit include the Guarantor or the Trust of any such director,
officer, trustee or controlling person and such Underwriter and the Guarantor or
the Trust of such director, officer, trustee or controlling person have been
advised by such counsel that one or more legal defenses may be available to it
or them which may not be available to such Underwriter, in which case such
Underwriter shall not be entitled to assume the defense of such suit on behalf
of the Guarantor or the Trust of such director, officer, trustee or controlling
person, notwithstanding its obligation to bear the reasonable fees and expenses
of such counsel, it being understood, however, that such Underwriter shall not,
in connection with any one such suit or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any time for
all of the Guarantor or the Trust and any such director, officer, trustee or
controlling person, which firm shall be designated in writing by the Guarantor.
Such Underwriter shall not be liable to indemnify any person for any settlement
of any such claim effected without such Underwriter's consent. This indemnity
agreement will be in addition to any liability which such Underwriter might
otherwise have.
(c) If recovery is not available under Section 6(a) or 6(b) hereof,
for any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution for
liabilities and expenses, except to the extent that contribution is not
permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the offering of the
Securities (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Guarantor and
the Trust and the Underwriters agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose). No
Underwriters or any person controlling such Underwriters shall be obligated to
make contribution hereunder which in the aggregate exceeds the total public
offering price of the Securities purchased by such Underwriters under this
Agreement, less the aggregate amount of any damages which such Underwriters and
its controlling persons have otherwise been required to pay in respect of the
same claim or any substantially similar claim. The Underwriters' obligations to
contribute are several in proportion to their respective underwriting
obligations, and not joint.
7. Substitution of Underwriters. If any Underwriter shall default in
----------------------------
its obligation to purchase the Securities which it has agreed to purchase
hereunder and the aggregate principal amount of such Securities which such
defaulting Underwriter agreed but failed to purchase does not exceed 10% of the
aggregate principal amount of all the Securities, the non-defaulting
Underwriters may make arrangements satisfactory to the Guarantor and Trust for
the purchase of the aggregate principal amount of such Securities by other
persons, including the non-defaulting Underwriters, but if no such
19
<PAGE>
arrangements are made prior to the Time of Delivery, the non-defaulting
Underwriters shall be obligated severally in proportion to their respective
commitments hereunder, to purchase the Securities which such defaulting
Underwriter agreed but failed to purchase. If any Underwriter or Underwriters
shall so default and the aggregate principal amount of such Securities with
respect to which such default or defaults occur is more than 10% of the
aggregate principal amount of all the Securities and arrangements satisfactory
to the non-defaulting Underwriters and the Guarantor and the Trust for the
purchase of such Securities by other persons are not made within 48 hours after
such default, this agreement will terminate.
If the non-defaulting Underwriter or substituted underwriter or
underwriters are required hereby or agree to take up all or part of the
Securities of the defaulting Underwriter as provided in this Section 7, (i) the
Guarantor and the Trust shall have the right to postpone the Time of Delivery
for a period of not more than five full business days, in order that the
Guarantor and the Trust may effect whatever changes may thereby be made
necessary in the Registration Statement or Prospectus or in any other documents
or arrangements, and the Guarantor and the Trust agree to promptly file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective aggregate principal
amount of Securities which the non-defaulting Underwriters or substituted
purchaser or purchasers shall thereafter be obligated to purchase shall be taken
as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Guarantor and the Trust or the non-defaulting Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 7 shall be without liability on the part of
the non-defaulting Underwriters or the Guarantor or the Trust, other than as
provided in Sections 6 and 9.
8. Survival of Indemnities, Representations, Warranties, etc. The
----------------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Guarantor and the Trust and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Guarantor or the Trust, or any officer or director or controlling person of the
Guarantor or the Trust, and shall survive delivery of and payment for the
Securities.
9. Termination. If this Agreement shall be terminated by the
-----------
Underwriters, because of any failure or refusal on the part of the Guarantor or
the Trust to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Guarantor or the Trust shall be unable to
perform its obligations under this Agreement, the respective indemnities shall
remain in full force and effect and the Guarantor or the Trust will reimburse
the Underwriter or such Underwriters as have so terminated this Agreement with
respect to themselves for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by them in connection with
the transactions contemplated by this Agreement.
20
<PAGE>
10. Notices. In all dealings hereunder, you shall act on behalf of
-------
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and (i) if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you in care of Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration Department; (ii) if to
the Guarantor shall be delivered or sent by mail, telex or facsimile
transmission to the Guarantor in care of Houston Industries Incorporated, 1111
Louisiana, Houston, Texas 77002, Attention, Assistant Treasurer; and (iii) if to
the Trust shall be delivered or sent by mail, telex or facsimile transmission to
the Trust, 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
11. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Guarantor and the Trust and their
respective successors and the directors, trustees, officers and controlling
persons referred to in Section 6 of this Agreement. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be, and being, for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Guarantor and the Trust contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of the Act or the Exchange Act, and the representations, warranties,
covenants, agreements and indemnities of the several Underwriters shall also be
for the benefit of each Trustee, each director of the Guarantor, each person who
has signed the Registration Statement and the person or persons, if any, who
control the Guarantor and the Trust within the meaning of the Act.
12. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York.
13. Counterparts. This Agreement may be executed by any one or more
------------
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Guarantor and the Trust. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Guarantor and the Trust for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
HL&P Capital Trust ___
By: Houston Lighting & Power Company, as Depositor
By:__________________________________________________
Name:
Title:
Houston Lighting & Power Company
By:__________________________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By: ___________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
22
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Liquidation
Amount of
Securities
to be
Underwriters Purchased
------------ ---------
<S> <C>
Goldman, Sachs & Co. ......................................... $
Merrill Lynch, Pierce, Fenner & Smith Incorporated............
Total .............................................. [____________]
</TABLE>
23
<PAGE>
Exhibit 4.1
HOUSTON LIGHTING & POWER COMPANY
to
THE BANK OF NEW YORK,
Trustee
----------------------------------------------------
JUNIOR SUBORDINATED INDENTURE
Dated as of ____________ 1, 1997
----------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
SECTION 1.1. Definitions........................................................ 1
SECTION 1.2. Compliance Certificate and
Opinions........................................................... 11
SECTION 1.3. Forms of Documents Delivered to
Trustee............................................................ 12
SECTION 1.4. Acts of Holders.................................................... 13
SECTION 1.5. Notices, Etc. to Trustee and
Company............................................................ 15
SECTION 1.6. Notice to Holders; Waiver.......................................... 16
SECTION 1.7. Conflict with Trust Indenture Act.................................. 16
SECTION 1.8. Effect of Headings and Table of
Contents........................................................... 16
SECTION 1.9. Successors and Assigns............................................. 16
SECTION 1.10. Separability Clause................................................ 16
SECTION 1.11. Benefits of Indenture.............................................. 17
SECTION 1.12. Governing Law...................................................... 17
SECTION 1.13. Non-Business Days.................................................. 17
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.................................................... 17
SECTION 2.2. Form of Face of Security........................................... 18
SECTION 2.3. Form of Reverse of Security........................................ 22
SECTION 2.4. Additional Provisions Required in
Global Security.................................................... 25
SECTION 2.5. Form of Trustee's Certificate of
Authentication..................................................... 26
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.................................................... 26
SECTION 3.2. Denominations...................................................... 29
SECTION 3.3. Execution, Authentication, Delivery
and Dating......................................................... 29
SECTION 3.4. Temporary Securities............................................... 31
SECTION 3.5. Registration, Transfer and Exchange................................ 31
SECTION 3.6. Mutilated, Destroyed, Lost and
Stolen Securities.................................................. 34
SECTION 3.7. Payment of Interest; Interest
Rights Preserved................................................... 35
SECTION 3.8. Persons Deemed Owners.............................................. 37
SECTION 3.9. Cancellation....................................................... 37
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 3.10. Computation of Interest............................................ 37
SECTION 3.11. Deferrals of Interest Payment
Dates.............................................................. 37
SECTION 3.12. Right of Set-Off................................................... 39
SECTION 3.13. Agreed Tax Treatment............................................... 39
SECTION 3.14. Advancing or Extension of Stated
Maturity........................................................... 39
SECTION 3.15. CUSIP Numbers...................................................... 40
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of
Indenture.......................................................... 40
SECTION 4.2. Application of Trust Money......................................... 42
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.................................................. 42
SECTION 5.2. Acceleration of Maturity;
Rescission and Annulment........................................... 43
SECTION 5.3. Collection of Indebtedness and
Suits for Enforcement by Trustee................................... 45
SECTION 5.4. Trustee May File Proofs of Claim................................... 46
SECTION 5.5. Trustee May Enforce Claims Without
Possession of Securities........................................... 47
SECTION 5.6. Application of Money Collected..................................... 47
SECTION 5.7. Limitation on Suits................................................ 48
SECTION 5.8. Unconditional Right of Holders to
Receive Principal, Premium and
Interest; Direct Action by Holders
of Preference Securities........................................... 49
SECTION 5.9. Restoration of Rights and Remedies................................. 49
SECTION 5.10. Rights and Remedies Cumulative..................................... 49
SECTION 5.11. Delay or Omission Not Waiver....................................... 50
SECTION 5.12. Control by Holders................................................. 50
SECTION 5.13. Waiver of Past Defaults............................................ 50
SECTION 5.14. Undertaking for Costs.............................................. 51
SECTION 5.15. Waiver of Usury, Stay or Extension
Laws............................................................... 51
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and
Responsibilities................................................... 52
SECTION 6.2. Notice of Defaults................................................. 53
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 6.3. Certain Rights of Trustee.......................................... 54
SECTION 6.4. Not Responsible for Recitals or
Issuance of Securities............................................. 55
SECTION 6.5. May Hold Securities................................................ 55
SECTION 6.6. Money Held in Trust................................................ 55
SECTION 6.7. Compensation and Reimbursement..................................... 55
SECTION 6.8. Disqualification; Conflicting
Interests.......................................................... 56
SECTION 6.9. Corporate Trustee Required;
Eligibility........................................................ 56
SECTION 6.10. Resignation and Removal;
Appointment of Successor........................................... 57
SECTION 6.11. Acceptance of Appointment by
Successor.......................................................... 59
SECTION 6.12. Merger, Conversion, Consolidation
or Succession to Business.......................................... 60
SECTION 6.13. Preferential Collection of Claims
Against Company.................................................... 61
SECTION 6.14. Appointment of Authenticating
Agent.............................................................. 61
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names
and Addresses of Holders........................................... 63
SECTION 7.2. Preservation of Information,
Communications to Holders.......................................... 63
SECTION 7.3. Reports by Trustee................................................. 64
SECTION 7.4. Reports by Company................................................. 64
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only
on Certain Terms................................................... 65
SECTION 8.2. Successor Corporation Substituted.................................. 66
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without
Consent of Holders................................................. 67
SECTION 9.2. Supplemental Indentures with
Consent of Holders................................................. 68
SECTION 9.3. Execution of Supplemental
Indentures......................................................... 70
SECTION 9.4. Effect of Supplemental Indentures.................................. 70
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 9.5. Conformity with Trust Indenture
Act................................................................ 70
SECTION 9.6. Reference in Securities to
Supplemental Indentures............................................ 70
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and
Interest........................................................... 71
SECTION 10.2. Maintenance of Office or Agency.................................... 71
SECTION 10.3. Money for Security Payments to be
Held in Trust...................................................... 72
SECTION 10.4. Statement as to Compliance......................................... 73
SECTION 10.5. Waiver of Certain Covenants........................................ 74
SECTION 10.6. Additional Sums.................................................... 74
SECTION 10.7. Additional Covenants............................................... 75
SECTION 10.8. Calculation of Original Issue Discount............................. 75
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article...................................... 76
SECTION 11.2. Election to Redeem; Notice to
Trustee............................................................ 76
SECTION 11.3. Selection of Securities to be
Redeemed........................................................... 77
SECTION 11.4. Notice of Redemption............................................... 77
SECTION 11.5. Deposit of Redemption Price........................................ 78
SECTION 11.6. Payment of Securities Called for
Redemption......................................................... 78
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article........................................... 79
SECTION 12.2. Satisfaction of Sinking Fund
Payments with Securities........................................... 80
SECTION 12.3. Redemption of Securities for
Sinking Fund....................................................... 80
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior
Debt............................................................... 82
SECTION 13.2. Payment Over of Proceeds Upon
Dissolution, Etc................................................... 82
</TABLE>
iv
<PAGE>
Page
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration of
Securities.................................................. 84
SECTION 13.4. No Payment When Senior Debt in Default...................... 85
SECTION 13.5. Obligations of Company Unconditional........................ 86
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt............. 87
SECTION 13.7. Provisions Solely to Define Relative Rights................. 88
SECTION 13.8. Trustee to Effectuate Subordination......................... 88
SECTION 13.9. No Waiver of Subordination Provisions....................... 88
SECTION 13.10. Notice to Trustee........................................... 89
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................... 90
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt............ 90
SECTION 13.13. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights......................................... 90
SECTION 13.14. Article Applicable to Paying Agents......................... 91
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment............. 91
v
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture whether
or not physically contained therein) and the Junior Subordinated Indenture,
dated as of __________ 1, 1997.
Trust Indenture
Act Section Section
- ----------------- ---------------
(S) 310 (a)(1), (2) and (5).................................... 6.9
(a)(3)................................................. Not Applicable
(a)(4)................................................. Not Applicable
(b).................................................... 6.8, 6.10
(c).................................................... Not Applicable
(S) 311 (a).................................................... 6.13
(b)(4)................................................. 6.13(a)
(b)(6)................................................. 6.13(b)
(S) 312 (a).................................................... 7.1, 7.2(a)
(b).................................................... 7.2(b)
(c).................................................... 7.2(c)
(S) 313 (a).................................................... 7.3(a), 7.3(b)
(c).................................................... 7.3(a)
(d).................................................... 7.3(c)
(S) 314 (a)(1), (2), (3) and (4)............................... 7.4
(b).................................................... Not Applicable
(c)(1) and (2)......................................... 1.2
(c)(3)................................................. Not Applicable
(d).................................................... Not Applicable
(e).................................................... 1.2
(S) 315 (a).................................................... 6.1(a)
(b).................................................... 6.2
(c).................................................... 6.1(b)
(d)(1)................................................. 6.1(c)(1)
(d)(2)................................................. 6.1(c)(2)
(d)(3)................................................. 6.1(c)(3)
(e).................................................... 5.14
(S) 316 (a)(1)(A).............................................. 5.12
(a)(1)(B).............................................. 5.13
(a)(2)................................................. Not Applicable
(b).................................................... 5.8
(c).................................................... 1.4(f)
(S) 317 (a)(1)................................................. 5.3
(a)(2)................................................. 5.4
(b).................................................... 10.3
(S) 318 (a).................................................... 1.7
- ----------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
vi
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of [__________ 1], 1997, between
HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (hereinafter called the
"Company") having its principal office at Houston Industries Plaza, 1111
Louisiana, Houston, Texas 77002, and The Bank of New York, a New York banking
corporation, as Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each an "HL&P Trust,"
and, collectively, the "HL&P Trusts") of beneficial interests in such Trusts
(such interests to be called either "Preferred Securities" or "Capital
Securities" and, collectively, the "Preference Securities") and common interests
in such Trusts (the "Common Securities" and, collectively with the Preference
Securities, the "Trust Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE>
(1) The terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate
per annum specified or determined as specified in such Security. Additional
Interest will accrue under the circumstances contemplated under this Indenture,
to the extent permitted by applicable law.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which an HL&P Trust has become subject from time
to time as a result of a Tax Event.
"Administrative Trustee" means, in respect of any HL&P Trust, each Person
identified as an "Administrative Trustee" in the related Trust Agreement, solely
in such Person's capacity as Administrative Trustee of such HL&P Trust under
such Trust Agreement and not in such Person's individual capacity, or any
successor administrative trustee appointed as therein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified
2
<PAGE>
Person; provided, however, no HL&P Trust to which Securities have been issued
shall be deemed to be an Affiliate of the Company. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series initially issued to an HL&P Trust, the principal corporate trust office
of the Property Trustee under the related Trust Agreement, is closed for
business.
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock of the Company.
3
<PAGE>
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Agent" means any officer of Houston Industries, the parent
company of the Company, who is authorized and empowered pursuant to one or more
Board Resolutions to negotiate, execute and deliver on behalf of the Company
instruments, certificates and documents in connection with the Company's
financing activities including, without limitation, the President, any Vice
President, the Treasurer, the Secretary, and Assistant Secretary or any
Assistant Treasurer of Houston Industries.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary of the Company or a Company Agent, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which at the date hereof is 101 Barclay Street, Floor 21 West, New York, New
York 10286. Attention: Corporate Trust Trustee Administrator.
"corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) every
obligation of such Person for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options, swaps and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 3.1 with
respect to such series (or any successor thereto).
4
<PAGE>
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by an HL&P
Trust, means amounts payable in respect of such Trust Securities as provided in
the related Trust Agreement and referred to therein as "Distributions."
"Dollar" means the currency of the United States of America that, as at
the time of payment, is legal tender for the payment of public and private
debts.
"Event of Default" unless otherwise specified in the supplemental
indenture creating a series of Securities has the meaning specified in
Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(f).
"Extension Period" has the meaning specified in Section 3.11.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depository or
its nominee for such series, and registered in the name of such Depository or
its nominee.
"Guarantee Agreement," with respect to an HL&P Trust, means the Guarantee
Agreement substantially in the form attached hereto as Annex D or Annex E, or
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from time
to time.
"HL&P Guarantee," with respect to an HL&P Trust, means the guarantee by
the Company of Distributions on the Preference Securities of such HL&P Trust to
the extent provided in the Guarantee Agreement with respect to such HL&P Trust.
"HL&P Trust" has the meaning specified in the first recital of this
Indenture.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
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"Houston Industries" means Houston Industries Incorporated, a Texas
corporation.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Investment Company Act Event" means the receipt by an HL&P Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that such HL&P Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which change becomes effective on or after the Original Issue
Date.
"Junior Subordinated Payment" has the meaning specified in Section 13.2.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (and who may be an employee of the Company), and who
shall be acceptable to the Trustee.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities
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theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent in trust for the
Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or which have been paid
pursuant to Section 3.6, unless proof satisfactory to the Trustee is presented
that any such Securities are held by Holders in whose hands such Securities are
valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or such
other obligor. Upon the written request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Securities or any Affiliate
of the Company or such obligor, and, subject to the provisions of Section 6.1,
the Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Securities not
listed therein are Outstanding for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the Company
to pay the principal (and premium, if any) of or interest on any Securities on
behalf of the Company.
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"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Sections 3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Securities" has the meaning specified in the first recital of
this Indenture.
"Preference Securities" means the Preferred Securities and the Capital
Securities.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any HL&P Trust, the commercial
bank or trust company identified as the "Property Trustee" in the related Trust
Agreement, solely in its capacity as Property Trustee of such HL&P Trust under
such Trust Agreement and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as
therein provided.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, (i) in the case
of Securities of a series represented by one or more Global Securities, the
Business Day next preceding such Interest Payment Date and (ii) in the case of
Securities of a series not represented by one or more Global Securities, the
date which is fifteen days next preceding such Interest Payment Date (whether or
not a Business Day).
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"Responsible Officer" means, with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, or any other officer of the Corporate Trust Office of
the Trustee and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Rights Plan" means a plan of the Company providing for the issuance by
the Company to all holders of its Common Stock of rights entitling the holders
thereof to subscribe for or purchase shares of Common Stock or any class or
series of preferred stock or preference stock of the Company, which rights
(i) are deemed to be transferred with such shares of Common Stock, (ii) are not
currently exercisable and (iii) are also issued in respect of future issuances
of Common Stock, in each case until the occurrence of a specified event or
events.
"S&P" means Standard & Poor's Ratings Services.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or to other
Debt which is pari passu with, or subordinated to, the Securities, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which, when incurred and without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the
Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any
employee of the Company, (d) Debt that by its terms is subordinated to trade
accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of the Securities as a result of the subordination provisions of this
Indenture would be greater than such payments otherwise would have been (absent
giving effect to this clause (d)) as a result of any obligation of such holders
of such Debt to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, and (e) any Securities;
provided further, however, with respect to Securities of a series initially
issued to an HL&P Trust which has a series of outstanding Preferred Securities,
Senior Debt shall include all Debt of the Company to any of its Subsidiaries.
"Special Event" means an Investment Company Act Event or a Tax Event.
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"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Security as the date on which the principal of
such Security or such installment of interest is due and payable, in the case of
such principal, as such date may be advanced or extended as provided pursuant to
the terms of such Security and this Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Tax Event" means the receipt by an HL&P Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which proposed
change, pronouncement or decision is announced on or after the date of issuance
of the Preference Securities of such HL&P Trust, there is more than an
insubstantial risk that (i) such HL&P Trust is, or will be within 90 days of the
date of such Opinion of Counsel, subject to United States Federal income tax
with respect to income received or accrued on the corresponding series of
Securities issued by the Company to such HL&P Trust, (ii) interest payable by
the Company on such corresponding series of Securities is not, or within 90 days
of the date of such Opinion of Counsel, will not be, deductible by the Company,
in whole or in part, for United States Federal income tax purposes or (iii) such
HL&P Trust is, or will be within 90 days of the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Trust Agreement," with respect to an HL&P Trust, means a Trust Agreement
substantially in the form attached hereto as Annex A, as amended by the form of
Amended and Restated Trust Agreement substantially in the form attached hereto
as Annex B or Annex C, or substantially in such form as may be
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specified as contemplated by Section 3.1 with respect to the Securities of any
series, in each case as amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder and, if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of this
Indenture.
"Vice President" when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than the certificates provided
pursuant to Section 10.5) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
or caused to be made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer or counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual 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.
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SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent,
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waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders of Securities of such series, provided that the Company may
not set a record date for, and the provisions of this paragraph shall not apply
with respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date, provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action
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taken by Holders of the requisite principal amount of Outstanding Securities of
the relevant series on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities of the relevant series in the manner set forth in
Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 10.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the party hereto which set such record date shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Preference Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee, any Holder or any holder of Preference
Securities shall be sufficient for every purpose (except as otherwise provided
in Section 5.1) hereunder if in writing and mailed, first class, postage
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prepaid, to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Securities and, to the
extent provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1, 9.2, 10.6, 13.5,
13.6 and 13.7, the holders of Preference Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 1.13. Non-Business Days.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day (and no interest shall accrue for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day) except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (in each case with the same force
and effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with applicable tax laws or the rules of any
securities exchange or automated quotation system on which the Securities may be
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listed or traded as may, consistently herewith, be determined by the officers
executing such Securities, as conclusively evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 with respect to the authentication and
delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
The definitive Securities shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, if required by any
securities exchange or automated quotation system on which the Securities may be
listed or traded, on a steel engraved border or steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
or automated quotation system on which the Securities may be listed or traded,
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
SECTION 2.2. Form of Face of Security.
HOUSTON LIGHTING & POWER COMPANY
(Title of Security)
No. $ CUSIP No.____________
HOUSTON LIGHTING & POWER COMPANY, a corporation organized and existing
under the laws of Texas (hereinafter called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ______________, or registered assigns,
the principal sum of __________ Dollars on _____________, __; provided that the
Company may, subject to certain conditions specified in Section 3.14 of the
Indenture, (i) advance the Stated Maturity of the principal of this Security to
a date not earlier than _________, ________ and (ii) extend the Stated Maturity
of the principal of this Security at any time on one or more occasions, but in
no event to a date later than _______, ____. The Company further promises to
pay interest on said principal sum from _________, ________ or from the most
recent interest payment date (each such date, an "Interest Payment Date") on
which interest has been paid or duly provided for, __________ (subject to
deferral as set forth herein) in arrears on [specify Interest Payment Dates] of
each year, commencing ____________________, _____, at the rate of _____% per
annum, until the principal
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hereof shall have become due and payable, plus Additional Interest, to the
extent permitted by applicable law, if any, until the principal hereof is paid
or duly provided for or made available for payment and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
rate of ____% per annum, compounding _____. The amount of interest payable for
any period shall be computed on the basis of twelve 30-day months and a 360-day
year. The amount of interest payable for any partial period shall be computed on
the basis of a 360-day year of twelve 30-day months and the days elapsed in any
partial month. In the event that any date on which interest is payable on this
Security is not a Business Day, then a payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date the payment was originally payable.
A "Business Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of
this series initially issued to an HL&P Trust, the principal corporate trust
office of the Property Trustee under the Trust Agreement hereinafter referred to
for HL&P Capital Trust [ ] is closed for business. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest installment, which shall
be the [specify Regular Record Dates] next preceding the applicable Interest
Payment Date. Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange or automated quotation system on which the Securities of
this series may be listed or traded, and upon such notice as may be required by
such exchange or automated quotation system, all as more fully provided in said
Indenture.
[If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Company shall have the right at any time during the term of
this Security to
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defer payment of interest on this Security, at any time or from time to time,
for up to ____ consecutive ____ interest payment periods with respect to each
deferral period (each an "Extension Period"), during which Extension Periods
the Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest thereon to
the extent permitted by applicable law); provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Security; provided, further, that during any such Extension Period, the Company
shall not, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt security of the
Company that, in either case, ranks pari passu with or junior in interest to
this Security or make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to this Security (other
than (a) dividends or distributions in capital stock of the Company, (b) any
declaration of a dividend under a Rights Plan or in connection with the
implementation of a Rights Plan, the issuance of capital stock of the Company
under a Rights Plan or the redemption or repurchase of any rights distributed
pursuant to a Rights Plan,(c) payments under any HL&P Guarantee, and (d)
purchases of Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors, officers or
employees, related to the issuance of Common Stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of Common Stock
(or securities convertible into or exchangeable for Common Stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period shall exceed _____ consecutive ______ or
extend beyond the Stated Maturity of the principal of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period except at the end thereof.
The Company shall give the Holder of this Security and the Trustee notice of its
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election to begin any Extension Period at least one Business Day prior to the
next succeeding Interest Payment Date on which interest on this Security would
be payable but for such deferral or, with respect to the Securities issued to an
HL&P Trust, so long as such Securities are held by such HL&P Trust, prior to the
earlier of (i) the next succeeding date on which Distributions on the Preference
Securities would be payable but for such deferral or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or other applicable self-regulatory organization or to holders of such
Preference Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Securities Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated in writing by the Person entitled thereto as specified in the
Securities Register.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to
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any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
HOUSTON LIGHTING & POWER COMPANY
By:
----------------------------
[Authorized Officer]
Attest:
- ---------------------------
Secretary
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued under a Junior
Subordinated Indenture, dated as of _________, 199__ (herein called the
"Indenture"), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $________________.
All terms used in this Security that are defined in the Indenture or in
the Amended and Restated Trust Agreement, dated as of _____________________,
______, as amended (the "Trust Agreement"), for HL&P Capital Trust [ ], among
Houston Lighting & Power Company, as Depositor, and the Trustees named therein,
shall have the meanings assigned to them in the Indenture or the Trust
Agreement, as the case may be.
The redemption provisions for each series of Securities shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case in accordance with the provisions of this
Indenture.
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In the event of redemption of this Security in part only, a new Security
or Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of all series to be affected by such supplemental indenture and,
under certain circumstances, in the case of Securities of a Series issued to an
HL&P Trust, the consent of holders of at least a majority in Aggregate
Liquidation Amount of Preference Securities then Outstanding. The Indenture also
contains provisions permitting Holders of specified percentages in principal
amount of the Securities of all series at the time Outstanding, on behalf of the
Holders of all Securities of such series, and in the case of Securities of a
Series issued to an HL&P Trust, the Holders of Preference Securities issued by
such HL&P Trust to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
[If the Security is not a Discount Security,--As provided in and subject
to the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
principal amount (and premium, if any) of all the Securities of this series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, in the case of the Securities
of this series issued to an HL&P Trust, if upon an Event of Default, the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of this series fails to declare the principal (and premium, if any)
of all the Securities of this series to be immediately due and payable, the
holders of at least 25% in aggregate Liquidation Amount of the Preference
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration the principal amount (and
premium, if any) of and the accrued interest (including any Additional Interest)
on all the Securities of this series shall become immediately due and payable,
provided that the payment of principal (and premium, if any) and interest
(including any
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Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII of the Indenture.]
[If the Security is a Discount Security,--As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal amount as may be specified in the terms of this series may
declare an amount of principal of (and premium, if any) the Securities of this
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), provided that, in the case of the
Securities of this series issued to an HL&P Trust, if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of this series fails to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the Preference Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee. Upon any such declaration, such amount of the principal of (and
premium, if any) and the accrued interest (including any Additional Interest) on
all the Securities of this series shall become immediately due and payable,
provided that the payment of principal (and premium, if any) and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on any
overdue principal (and premium, if any) and overdue interest (in each case to
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
interest, if any, on this Security shall terminate.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized
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denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $___ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities of this series are exchangeable for a like aggregate principal
amount of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 2.4. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 2.2 and 2.3, bear a legend in substantially the following
form:
"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Security is exchangeable for Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture and may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary."
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SECTION 2.5. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
The Bank of New York,
as Trustee
By:
----------------------------
Authorized Signatory
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:
(a) the title of the Securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6 and except for any
Securities which, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof and
the right, pursuant to Section 3.14 or as otherwise set forth therein, of the
Company to advance or extend the Stated Maturity of a series of Securities;
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(d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable in respect of any Securities of such series,
the Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.11 or as otherwise set forth therein, of the Company to
defer or extend an Interest Payment Date, and the Regular Record Date for the
interest payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;
(f) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company;
(g) the obligation or the right, if any, of the Company to redeem, repay
or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof, and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple thereof;
(i) if other than Dollars, the currency or currencies (including currency
unit or units) in which the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
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(l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(n) whether the Securities of the series, or any portion thereof, shall
initially be issuable in the form of a temporary Global Security representing
all or such portion of the Securities of such series and provisions for the
exchange of such temporary Global Security for definitive Securities of such
series;
(o) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such case,
the respective Depositaries for such Global Securities, the form of any legend
or legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 2.4 and any circumstances in addition to or in
lieu of those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer of
such Global Security in whole or in part may be registered, in the name or names
of Persons other than the Depositary for such Global Security or a nominee
thereof;
(p) the appointment of any Paying Agent or Agents for the Securities of
such series;
(q) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(r) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
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<PAGE>
(s) any other terms of the Securities of such series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided herein or in or
pursuant to such Board Resolution and set forth in such Officers' Certificate or
in any such indenture supplemental hereto.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior Debt
as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations as contemplated by Section 3.1.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
President or one of its Vice Presidents under its corporate seal reproduced or
impressed thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and make available for delivery such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such
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Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in conclusively relying upon,
an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 3.1, that such terms have been
established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding paragraph,
if all Securities of a series are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be
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conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.9, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations having
the same Original Issue Date and Stated Maturity and having the same terms as
such temporary Securities. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
SECTION 3.5. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided. If any indenture supplemental hereto refers to any
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transfer agents (in addition to the Securities Registrar) initially designated
by the Company with respect to any series of Securities, the Company may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, provided that the
Company maintains a transfer agent in each place of payment for such series.
The Company may at any time designate additional transfer agents with respect to
any series of Securities.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated for that purpose the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series of any
authorized denominations, of a like aggregate principal amount, of the same
Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary
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designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
has ceased to be a clearing agency registered under the Exchange Act at a time
when the Depositary is required to be so registered to act as depositary, in
each case unless the Company has approved a successor Depositary within 90 days,
(B) there shall have occurred and be continuing an Event of Default with respect
to such Global Security, (C) the Company in its sole discretion determines that
such Global Security will be so exchangeable or transferable or (D) there shall
exist such circumstances, if any, in addition to or in lieu of the foregoing as
have been specified for this purpose as contemplated by Section 3.1.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.6 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of mailing of notice of redemption pursuant to Article XI and
ending at the close of business on the day of mailing of such notice of
redemption or (b) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.
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SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a new Security
of the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity, and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same issue and series of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity as such destroyed, lost or stolen
Security, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
fees and expenses of counsel to the Company and fees and expenses of the
Trustee, its agents and counsel) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
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SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date, shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable on the
Stated Maturity of the principal of a Security shall be paid to the Person to
whom principal is paid. The initial payment of interest on any Security of any
series which is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Security or in the Board
Resolution pursuant to Section 3.1 with respect to the related series of
Securities. Except in the case of a Global Security, at the option of the
Company, interest on any series of Securities may be paid (i) by check mailed to
the address of the Person entitled thereto as it shall appear on the Securities
Register of such series or (ii) by wire transfer in immediately available funds
at such place and to such account as designated in writing by the Person
entitled thereto as specified in the Securities Register of such series.
Any paying agents will be identified in a supplemental indenture hereto.
The Company may at any time designate additional paying agents or rescind the
designation of any paying agent; however, the Company at all times will be
required to maintain a paying agent in each place of payment for each series of
Securities.
Except as described in Section 3.11, any interest on any Security which
is payable, but is not timely paid or duly provided for, on any Interest Payment
Date for Securities of such series (herein called "Defaulted Interest"), shall
forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall
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deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first class, postage prepaid, to each Holder of a Security of such
series at the address of such Holder as it appears in the Securities Register
not less than 10 days prior to such Special Record Date. Unless all of the
Securities of a series are held by an HL&P Trust, The Trustee shall, in the name
and at the expense of the Company, cause a similar notice to be published at
least once in a newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities)
are registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
or automated quotation system on which the Securities of the series in respect
of which interest is in default may be listed or traded and, upon such notice as
may be required by such exchange (or by the Trustee if the Securities are not
listed), if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
Any interest on any Security which is deferred or extended pursuant to
Section 3.11 shall not be Defaulted Interest for the purposes of this Section
3.7.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
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SECTION 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered on the applicable
record date as the owner of such Security for the purpose of receiving payment
of principal of and (subject to Section 3.7) any interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities shall be returned by the
Trustee to the Company.
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and interest on the Securities of each series for any partial period shall be
computed on the basis of a 360-day year of twelve 30-day months and the number
of days elapsed in any partial month.
SECTION 3.11. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 3.1 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At
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the end of any such Extension Period the Company shall pay all interest then
accrued and unpaid on the Securities (together with Additional Interest thereon,
if any, at the rate specified for the Securities of such series to the extent
permitted by applicable law) to the Persons in whose names that Securities are
registered at the close of business on the Regular Record Date with respect to
the Interest Payment Date at the end of such Extension Period; provided,
however, that no Extension Period shall extend beyond the Stated Maturity of the
principal of the Securities of such series; provided further, that during any
such Extension Period, the Company shall not, (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock, or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt security of the Company that, in either case, ranks pari passu with or
junior in interest to the Securities of such series or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any Subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the securities of such series (other than (a) dividends or
distributions in the capital stock of the Company, (b) any declaration of a
dividend under a Rights Plan or in connection with the implementation of a
Rights Plan, the issuance of capital stock of the Company under a Rights Plan or
the redemption or repurchase of any rights distributed pursuant to a Rights
Plan, (c) payments under any HL&P Guarantee, and (d) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers or employees, related to the issuance
of Common Stock or rights under a dividend reinvestment and stock purchase plan,
or related to the issuance of Common Stock (or securities convertible into or
exchangeable for Common Stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Extension Period shall exceed the
period or periods specified in such Securities or extend beyond the Stated
Maturity of the principal of such Securities. Upon termination of any Extension
Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company shall give the Holders
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of the Securities of such series and the Trustee notice of its election to begin
any such Extension Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on Securities of such series would be
payable but for such deferral or, with respect to the Securities of a series
issued to an HL&P Trust, so long as such Securities are held by such HL&P Trust,
prior to the earlier of (i) the next succeeding date on which Distributions on
the Preference Securities of such HL&P Trust would be payable but for such
deferral or (ii) the date the Administrative Trustees of such HL&P Trust are
required to give notice to any securities exchange or other applicable self-
regulatory organization or to holders of such Preference Securities of the
record date or the date such Distributions are payable, but in any event not
less than one Business Day prior to such record date.
The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the Holders of the Outstanding Securities of such
series.
SECTION 3.12. Right of Set-Off.
With respect to the Securities of a series issued to an HL&P Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the HL&P Guarantee relating to such Security or under Section 5.8.
SECTION 3.13. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by its
acceptance of a Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Security agree that for
United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.
SECTION 3.14. Advancing or Extending of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, the Company shall have the right to
(i) advance the Stated Maturity of the principal of the Securities of such
series at any time to any date not earlier than the first date on which the
Company has the right to redeem the Securities of such series, and (ii) extend
the Stated Maturity of the principal of the Securities of such series at any
time at its election for one or more periods, but in no event to a date
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later than the 49th anniversary of the first Interest Payment Date following the
Original Issue Date of the Securities of such series; provided that, if the
Company elects to exercise its right to extend the Stated Maturity of the
principal of the Securities of such series pursuant to clause (ii), above, at
the time such election is made and at the time of extension (A) the Company is
not in bankruptcy, otherwise insolvent or in liquidation, (B) the Company is not
in default in the payment of any interest or principal on such Securities, (C)
in the case of any series of Securities issued to an HL&P Trust, such HL&P Trust
is not in arrears on payments of Distributions on the Preference Securities
issued by such HL&P Trust and no deferred Distributions are accumulated and (D)
if any of such Securities are held by any Person other than an HL&P Trust such
Securities are rated not less than BBB- by S&P or Baa3 by Moody's or the
equivalent by any other nationally recognized statistical rating organization.
In the event the Company elects to advance or extend the Stated Maturity of the
Securities, it shall give notice to the Trustee, and the Trustee shall give
notice of such advancing or extension to the Holders, no less than 30 and no
more than 60 days prior to the effectiveness thereof.
SECTION 3.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee in writing of any change in CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
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(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of Clause (B) (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies in which the
Securities of such series are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and interest
(including any Additional Interest) to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Company
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under Section 4.2 and the last paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest (including any Additional Interest) for the payment of which
such money or obligations have been deposited with or received by the Trustee.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any interest payment date in the case of an
Extension Period); or
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or
(3) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Company in this Indenture with respect to that
series (other than a covenant or warranty a default in the performance of which
or the breach of which is elsewhere in this Section specifically dealt with),
and continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series
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a written notice specifying such default or breach and requiring it to be
remedied; or
(4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit for creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate action
by the Company in furtherance of any such action; or
(6) any other Event of Default provided with respect to Securities of
that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the Securities of a series issued to an HL&P Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the
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Outstanding Securities of that series fail to declare the principal amount (or,
if the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the corresponding series of
Preference Securities then outstanding shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal amount (or specified portion thereof) of and the accrued interest
(including any Additional Interest to the extent permitted under applicable law)
on all, the Securities of such series shall become immediately due and payable.
Payment of principal and interest (including any Additional Interest to the
extent permitted under applicable law) on such Securities shall remain
subordinated to the extent provided in Article XIII notwithstanding that such
amount shall become immediately due and payable as herein provided.
If an Event of Default specified in Section 5.1(4) or 5.1(5) with respect
to Securities of any series at the time Outstanding occurs, the principal amount
of all the Securities of that series (or, if the Securities of that series are
Discount Securities, such portion of the principal amount of such Securities as
may be specified by the terms of that series) shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(A) all overdue installments of interest (including any Additional
Interest) on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; and
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(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series which
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.13.
In the case of Securities of a series issued to an HL&P Trust, the
holders of a majority in aggregate Liquidation Amount (as defined in the Trust
Agreement under which such HL&P Trust is formed) of the related series of
Preference Securities issued by such HL&P Trust shall also have the right to
rescind and annul such declaration and its consequences by written notice to the
Company and the Trustee, subject to the satisfaction of the conditions set forth
in Clauses (1) and (2) above of this Section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the holders of such Securities, the whole amount then due and payable
on such Securities for principal, including any sinking fund payment or
analogous obligations (and premium, if any) and interest (including any
Additional Interest); and, in addition thereto, all amounts owing the Trustee,
its agents and counsel under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
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If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration of acceleration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
(and premium, if any) or interest (including any Additional Interest)) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(or, if the Securities of that series are Discount Securities, such portion
of the principal amount as may be due and payable pursuant to a declaration
in accordance with Section 5.2) (and premium, if any) and interest
(including any Additional Interest) owing and unpaid in respect to the
Securities and to file such other papers or documents as may be necessary
or advisable and to take any and all actions as are authorized under the
Trust Indenture Act in order to have the claims of the Holders and any
predecessor to the Trustee under Section 6.7 allowed in any such judicial
proceedings; and
(ii) in particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such
claims and to distribute the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee for distribution in
accordance with Section 5.6, and in the event that the Trustee shall consent to
the making of such payments directly to the
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Holders, to pay to the Trustee any amount due to it and any predecessor Trustee
under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee, its agents and
counsel and any predecessor Trustee, its agents and counsel under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon such series of Securities for principal (and premium, if any),
interest (including any Additional Interest) and Additional Taxes, in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such series of Securities
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for principal (and premium, if any) and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits.
No Holder of any Securities of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of security or indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
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SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Preference Securities.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.11)
interest (including any Additional Interest) on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder. In the case of Securities of a series issued to an HL&P Trust, any
holder of the corresponding series of Preference Securities issued by such HL&P
Trust shall have the right, upon the occurrence of an Event of Default described
in Section 5.1(1) or 5.1(2), to institute a suit directly against the Company
for enforcement of payment to such holder of principal of (premium, if any) and
(subject to Section 3.11) interest (including any Additional Interest) on the
Securities having a principal amount equal to the aggregate Liquidation Amount
(as defined in the Trust Agreement under which such HL&P Trust is formed) of
such Preference Securities of the corresponding series held by such holder and
such right shall not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Preference Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preference Securities, then and in every such case the Company, the Trustee, the
Holders and such holder of Preference Securities shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, the Holders and the holders of Preference Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or
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otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of any Preference Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or
to the Holders and the right and remedy given to the holders of Preference
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of
Preference Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have the
right to decline to follow such direction if a Responsible Officer or Officers
of the Trustee shall, in good faith, determine that the proceeding so directed
would involve the Trustee in personal liability or would otherwise be contrary
to applicable law.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series and, in the case of any Securities of a
series issued to an HL&P Trust, the holders of Preference Securities issued by
such HL&P Trust may waive any past default hereunder and its consequences with
respect to such series except a default:
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(1) in the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all the
Securities of such series or, in the case of a waiver by holders of Preference
Securities issued by such HL&P Trust, by all holders of Preference Securities
issued by such HL&P Trust.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for my action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest) on any Security on or after the respective Stated
Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and
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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 VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform on their face to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible
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Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of Holders pursuant to Section 5.12 relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be fully protected
in withholding such notice if and so long as a committee of Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders of Securities of such series; and provided,
further, that, in the case of any default of the character specified in Section
5.1(3), no such notice to Holders of Securities of such series shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
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SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, Security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company, upon
reasonable notice to the Company, during business hours, personally or by agent
or attorney;
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture; and
(i) the Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Securities
Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder in such amounts as the Company and the
Trustee shall agree from time to time (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred
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or made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors, shareholders,
employees and agents for, and to hold it harmless against, any and all loss,
damage, claim, liability or expense (including the reasonable compensation and
the expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination of this
Indenture.
This Section 6.7 shall survive the termination of this Indenture or the
earlier resignation or removal of the Trustee.
To secure the Company's payment obligations in this Section, the Company
and the Holders agree that the Trustee shall have a lien prior to the Securities
on all money or property held or collected by the Trustee. Such lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States of America or of any State
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or Territory or the District of Columbia, authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority, or
(b) a corporation or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees, in either case having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Company nor any Person directly or indirectly controlling, controlled by or
under common control with the Company shall serve as Trustee for the Securities
of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of removal or
resignation, the Trustee being removed or resigning may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to all Securities, or (ii)
subject to Section 5.14, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to the Securities of such series and
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Security
for at least six months may, subject to Section 5.14, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
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(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities of such series as their names and addresses appear in
the Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring 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
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herein or in such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 6.12. Merger, Conversion, Consolidation 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 of 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, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which
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it is provided anywhere in the Securities or in this Indenture that the
certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor). For purposes of Section 311(b)(4) and
(6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of the
goods or securities in currency or in checks or other orders drawn upon banks
and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security; provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company
(or any such obligor) arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation.
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State or Territory or
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the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
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If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:
The Bank of New York,
As Trustee
By:
As Authenticating Agent
By:
Authorized Officer
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after [____________ 15] in
each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such [_____________ 15,] and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.
SECTION 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the
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Trustee as provided in Section 7.1 and the names and addresses of Holders
received by the Trustee in its capacity as Securities Registrar. The Trustee
may destroy any list furnished to it as provided in Section 7.1 upon receipt of
a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than March 31 in each calendar
year, commencing with the first March 31 after the first issuance of Securities
under this Indenture.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed and also with the Commission. The Company will
promptly notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided in the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act shall be filed with
the Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall continue to file with the Commission and provide
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the Trustee with the annual reports and the information, documents and other
reports which are specified in Sections 13 and 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of Trust Indenture Act
Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America or any State or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series issued to an HL&P
Trust, such consolidation, merger, conveyance, transfer or lease is permitted
under the related Trust Agreement and HL&P Guarantee and does not give rise to
any breach or violation of the related Trust Agreement or HL&P Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating
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that such consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with; and the Trustee, subject to Section 6.1, may rely upon such Officers'
Certificate and Opinion of Counsel as conclusive evidence that such transaction
complies with this Section 8.1.
SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; and in the event of any such conveyance,
transfer or lease the Company shall be discharged from all obligations and
covenants under the Indenture and the Securities and may be dissolved and
liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee or to surrender any right or power herein conferred upon the
Company; or
(3) to establish the form or terms of Securities of any series as
permitted by Section 2.1 or 3.1; or
(4) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(5) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events of
Default are to be for the benefit of less than all series of Securities, stating
that such additional Events of Default are expressly being included solely for
the benefit of such series); or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (7)
shall not adversely affect the interest of the
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Holders of Securities of any series in any material respect or, in the case of
the Securities of a series issued to an HL&P Trust and for so long as any of the
corresponding series of Preference Securities issued by such HL&P Trust shall
remain outstanding, the holders of such Preference Securities; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section 6.11
(b); or
(9) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 2.1 or Section 3.1 with respect to the
deferral of the payment of interest on the Securities of any series and except
to the extent permitted by Section 3.14 or as otherwise specified as
contemplated by Section 2.1 or Section 3.1 with respect to the advancing or
extension of Stated Maturity of the Securities of any Series, change the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest) on, any Security, or reduce the principal amount thereof or
the rate of interest thereon or reduce any premium payable upon the redemption
thereof, or reduce the amount of principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change the place of payment where, or the coin or
currency in which, any Security or interest thereon is payable, or impair the
right to institute suit for
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the enforcement of any such payment on or after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby; or
(4) modify the provisions in Article XIII of this Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
adverse to the Holders thereof;
provided, further, that, in the case of the Securities of a series issued to an
HL&P Trust, so long as any of the corresponding series of Preference Securities
issued by such HL&P Trust remains outstanding, (i) no such amendment shall be
made that adversely affects the holders of such Preference Securities in any
material respect, and no termination of this Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant under this
Indenture shall be effective, without the prior consent of the holders of at
least a majority of the aggregate Liquidation Amount (as defined in the Trust
Agreement under which such HL&P Trust is organized) of such Preference
Securities then outstanding unless and until the principal (and premium, if any)
of the Securities of such series and all accrued and, subject to Section 3.7,
unpaid interest (including any Additional Interest) thereon have been paid in
full and (ii) no such amendment shall be made where a consent under this
Indenture would require the consent of each holder of Securities, unless each
holder of Preference Securities, which corresponds to such series of Securities,
also consents to such amendment, unless and until the principal (and premium, if
any) of the Securities of such series and all accrued and (subject to Section
3.7) unpaid interest (including any Additional Interest) thereon have been paid
in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or Preference
Securities, or which modifies the rights of the Holders of Securities or
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holders of Preference Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Securities or holders of Preference Securities of any other
series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in conclusively relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture, and that all conditions precedent have been complied with. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company, to any such supplemental indenture may be prepared and executed by the
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Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including Additional Interest) on the Securities of that
series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities, an office or agency where Securities of that series may be presented
or surrendered for payment and an office or agency where Securities of that
series may be surrendered for transfer or exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
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SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest (and any Additional Interest) on
any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest (and any Additional Interest) so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 11:00 a.m. New York City time on each due date of the principal of or
interest (and any Additional Interest) on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest
(and any Additional Interest) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal and premium (if any) or
interest (and any Additional Interest), and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest (including Additional Interest) on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of principal
(and premium, if any) or interest (including Additional Interest);
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest (including Additional Interest) on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be paid
on Company Request to the Company, or (if then held by the Company) shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee, its
officers, directors, shareholders employees and agents or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the
end of each calendar year of the Company ending after the date hereof, an
Officers' Certificate covering the preceding calendar year, stating whether or
not to the best knowledge of the signers thereof the Company, are of the signers
of which shall be the principal executive, principal accounting or principal
financial officer of the Company, is in default in the performance, observance
or fulfillment of or compliance with any of the terms, provisions, covenants and
conditions of this Indenture, and if the Company shall be in default, specifying
all such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be determined
without regard to
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any grace period or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 10.5. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with
respect to the Securities of any series, if before or after the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series issued to an HL&P Trust, so
long as no Event of Default has occurred and is continuing and except as
otherwise specified as contemplated by Section 2.1 or Section 3.1, in the event
that (i) an HL&P Trust is the Holder of all of the Outstanding Securities of
such series, (ii) a Tax Event or an Investment Company Act Event in respect of
such HL&P Trust shall have occurred and be continuing and (iii) the Company
shall not have (A) redeemed the Securities of such series pursuant to Section 11
and the applicable supplemental indenture or (B) terminated such HL&P Trust
pursuant to Section 9.2(b) of the related Trust Agreement, the Company shall pay
to such HL&P Trust (and its permitted successors or assigns under the related
Trust Agreement) for so long as such HL&P Trust (or its permitted successor or
assignee) is the registered holder of any Securities of such series, such
additional amounts as may be necessary in order that the amount of Distributions
(including any Additional Amounts (as defined in such Trust Agreement)) then due
and payable by such HL&P Trust on the related Preference Securities and Common
Securities that at any time remain outstanding in accordance with the terms
thereof shall not be reduced as a result of any Additional Taxes (the
"Additional Sums"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those
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provisions hereof where such express mention is not made; provided, however,
that the deferral of the payment of interest pursuant to Section 3.11 on the
Securities shall not defer the payment of any Additional Sums that may be due
and payable.
SECTION 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of
each series that it shall not, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt security
(including other series of the Securities) of the Company that, in either case,
ranks pari passu with or junior in interest to the Securities of such series or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee ranks pari
passu with or junior in interest to the Securities (other than (a) dividends or
distributions in capital stock of the Company, (b) any declaration of a dividend
under a Rights Plan or in connection with the implementation of a Rights Plan,
the issuance of capital stock of the Company under a Rights Plan or the
redemption or repurchase of any rights distributed pursuant to a Rights Plan,
(c) payments under any HL&P Guarantee, and (d) purchases of Common Stock related
to the issuance of Common Stock or rights under any of the Company's benefit
plans for its directors, officers or employees, related to the issuance of
Common Stock or rights under a dividend reinvestment and stock purchase plan or
related to the issuance of Common Stock (or securities convertible into or
exchangeable for Common Stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period) if at
such time (i) an Event of Default with respect to the Securities of such series
shall have occurred and be continuing, (ii) if the Securities of such series are
held by an HL&P Trust, the Company shall be in default with respect to its
payment of any obligations under the HL&P Guarantee relating to the Preference
Securities issued by such HL&P Trust or (iii) the Company shall have given
notice of its election to begin an Extension Period with respect to the
Securities of such series as provided herein and shall not
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have rescinded such notice, or such Extension Period, or any extension thereof,
shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to an HL&P Trust (i) to maintain directly or indirectly 100% ownership of
the Common Securities of such HL&P Trust; provided, however, that any permitted
successor of the Company hereunder may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
such HL&P Trust, except (a) in connection with a distribution of the Securities
of such series to the holders of the Trust Securities in liquidation of such
HL&P Trust or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the related Trust Agreement and (iii) to use its
reasonable efforts, consistent with the terms and provisions of such Trust
Agreement, to cause such HL&P Trust to remain classified as a grantor trust and
not an association taxable as a corporation for United States federal income tax
purposes.
Section 10.8. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series (whether by operation of a
sinking fund or otherwise) as permitted or required by any form of Security
issued pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern. Each Security of such series
shall be subject to partial redemption only as set forth in the form of Security
for such series.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the Company of any Securities of a series, the Company shall, not
less than 30 nor more than 60 days prior to the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
date and of the principal amount of Securities of that series to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities, the
Company shall furnish the Trustee with an
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Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of each series to be redeemed, each notice
of redemption shall identify the Securities to be redeemed (including CUSIP
numbers) and shall state:
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(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of such particular series
and having the same terms are to be redeemed, the identification (and, in the
case of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price; and
(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 11:00 a.m. New York City time on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Company will deposit with the Trustee or with one or more Paying Agents (or if
the Company is acting as its own Paying Agent, the Company will segregate and
hold in trust as provided in Section 10.3) an amount of money sufficient to pay
the Redemption Price of, and any accrued interest (including Additional
Interest) on, all the Securities which are to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section
11.4, the Securities or portion of Securities with respect to which such notice
has been given shall become due and payable on the date and at the place or
places stated in such notice at the applicable Redemption
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Price. On presentation and surrender of such Securities at a Place of Payment
in said notice specified, the said securities or the specified portions thereof
shall be paid and redeemed by the Company at the applicable Redemption Price,
together with accrued interest (including any Additional Interest) to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates According to their terms and the
provisions of Section 3.7.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations, in aggregate principal amount equal to the
unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If a Global Security is so surrendered,
such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
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SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Company may at its
option, at any time no more than 16 months and no less than 30 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Securities of such series that have been redeemed through the
application of mandatory or optional sinking fund payments pursuant to the terms
of the Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that the Securities to be so credited have not
been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the redemption price for such
Securities, as specified in the Securities so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery the Company shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the
succeeding sinking fund payment date. In the case of the failure of the Company
to deliver such Officers' Certificate (or, as required by this Indenture, the
Securities and coupons, if any, specified in such Officers' Certificate), the
sinking fund payment due on the succeeding sinking fund payment date for such
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of the Securities of such series subject to a mandatory sinking
fund payment without the right to deliver or credit securities as provided in
Section 12.2 and without the right to make the
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optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Securities of any particular series shall be applied by the Trustee (or
by the Company if the Company is acting as its own Paying Agent) on the sinking
fund payment date on which such payment is made (or, if such payment is made
before a sinking fund payment date, on the sinking fund payment date immediately
following the date of such payment) to the redemption of Securities of such
series at the Redemption Price specified in such Securities with respect to the
sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or, if the Company is acting as its own Paying Agent, segregated and
held in trust by the Company as provided in Section 10.3) for such series and
together with such payment (or such amount so segregated) shall be applied in
accordance with the provisions of this Section 12.3. Any and all sinking fund
moneys with respect to the Securities of any particular series held by the
Trustee (or if the Company is acting as its own Paying Agent, segregated and
held in trust as provided in Section 10.3) on the last sinking fund payment date
with respect to Securities of such series and not held for the payment or
redemption of particular Securities of such series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent),
together with other moneys, if necessary, to be deposited (or segregated)
sufficient for the purpose, to the payment of the principal of the Securities of
such series at Maturity. The Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 11.3 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 11.4. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Section 11.6. On or before each sinking fund
payment date, the Company shall pay to the Trustee (or, if the Company is acting
as its own Paying Agent, the Company shall segregate and hold in trust as
provided in Section 10.3) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.1) equal to
the principal and any interest accrued to the Redemption Date for Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.3.
Neither the Trustee nor the Company shall redeem any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
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such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Company, if the
Company is then acting as its own Paying Agent) shall redeem such Securities if
cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Company) for that purpose in accordance with the terms of this
Article XII. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall occur and any
moneys thereafter paid into such sinking fund shall, during the continuance of
such default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.3.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Debt.
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Company (each such event, if any,
herein sometimes referred to as a "Proceeding"), then the holders of Senior Debt
shall be entitled to receive payment in full of all amounts due or to become due
on such Senior Debt, or provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior Debt,
before the Holders of the Securities are entitled to receive or retain any
payment or distribution
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of any kind or character, whether in cash, property or Securities (including any
payment or distribution which may be payable or deliverable by reason of the
payment of any other Debt of the Company (including any series of the
Securities) subordinated to the payment of the Securities, such payment or
distribution being hereinafter referred to as a "Junior Subordinated Payment"),
on account of principal of (or premium, if any) or interest (including any
Additional Interest) on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary and to that end the
holders of Senior Debt shall be entitled to receive, for application to the
payment thereof, any payment or distribution of any kind or character, whether
in cash, property or securities, including any Junior Subordinated Payment,
which may be payable or deliverable in respect of the Securities in any such
Proceeding; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with this Indenture or as
otherwise specified as contemplated by Section 3.1 for the Securities of any
series by delivering and crediting pursuant to Section 12.2 or as otherwise
specified as contemplated by Section 3.1 for the Securities of any series of
Securities which have been acquired (upon redemption or otherwise) prior to such
Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment or any sinking fund payment (except as described in the immediately
preceding paragraph), before all amounts due or to become due on all Senior Debt
are paid in full or payment thereof is provided for in cash or cash equivalents
or otherwise in a manner satisfactory to the holders of Senior Debt, then and in
such event such payment or distribution shall be received in trust and paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
amounts due or to become due on all Senior Debt remaining unpaid, to the extent
necessary to pay all amounts due or to become due on all Senior Debt in full,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
For purposes of this Article only, the words "any payment or distribution
of any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment which securities are subordinated in right of
payment to all then
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outstanding Senior Debt to substantially the same extent as the Securities are
so subordinated as provided in this Article. The consolidation of the Company
with, or the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the sale of all or substantially all of its
properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article VIII shall not be deemed a Proceeding for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by sale such properties
and assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, or sale comply with the conditions set forth in Article
VIII.
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration of
Securities.
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment or, except as provided below, any sinking fund payment) by the Company
on account of the principal of (or premium, if any) or interest (including any
Additional Interest) on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary; provided, however,
that nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with this Indenture or as otherwise specified as
contemplated by Section 3.1 for the Securities of any series by delivering and
crediting pursuant to Section 12.2 or as otherwise specified as contemplated by
Section 3.1 for the Securities of any series Securities which have been acquired
(upon redemption or otherwise) prior to such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions
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of this Section, and if such fact shall, at or prior to the time of such
payment, have been made actually known to a Responsible Officer of the Trustee
or, as the case may be, such Holder, then and in such event such payment shall
be paid over and delivered forthwith to the holders of Senior Debt or their
representatives or agents.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.4. No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior Debt, or
in the event that any event of default with respect to any Senior Debt shall
have occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or in the event any judicial
proceeding shall be pending with respect to any such default in payment or such
event of default, then no payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment or any sinking fund payment, except as provided below) shall be made by
the Company on account of principal of (or premium, if any) or interest
(including any Additional Interest), if any, on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary, in each case unless and until all amounts due or to become due on
such Senior Debt are paid in full.
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Nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with this Indenture or as otherwise specified as
contemplated by Section 3.1 for the Securities of any series by delivering and
crediting pursuant to Section 12.2 or as otherwise specified as contemplated by
Section 3.1 for the Securities of any series Securities which have been acquired
(upon redemption or otherwise) prior to such default in payment or event of
default.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, have been made
actually known to a Responsible Officer of the Trustee or, as the case may be,
such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the holders of Senior Debt or their representatives or
agents.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.5. Obligations of Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any Proceeding referred to in Section 13.2 or under the
conditions described in Sections 13.3 and 13.4, from making payments at any time
of principal of (and premium, if any) or interest (including Additional
Interest) on the Securities, or (b) the application by the Trustee of any money
deposited with it
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hereunder to the payment of or on account of the principal of (and premium, if
any) or interest (including any Additional Interest) on the Securities or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, a Responsible Officer of the Trustee did not have actual knowledge
that such payment would have been prohibited by the provisions of this Article.
Notwithstanding the foregoing, the failure of the Company to make a payment on
account of principal of (or premium, if any) or interest on (including any
Additional Interest) the Securities by reason of any provision of this Article
XIII shall not prevent the occurrence of an Event of Default under Article V, or
prevent the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon the occurrence of an Event of Default, subject
to the rights, if any, under this Article XIII of the holders of Senior Debt in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on all
Senior Debt to the extent provided herein, or the provision for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Debt pursuant
to the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to Senior
Debt of the Company to substantially the same extent as the Securities are
subordinated to the Senior Debt and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior Debt) to
the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest (including Additional
Interest) on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt. A release of any claim by any holder of Senior Debt
shall not limit the Rights of the Holders of Securities under this Section 13.6.
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SECTION 13.7. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as between the Company and the Holders of the Securities,
the obligations of the Company, which are absolute and unconditional, to pay to
the Holders of the Securities the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the holders of
Senior Debt; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture including, without limitation, filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
SECTION 13.8. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
SECTION 13.9. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Debt may, at any time and from to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the
88
<PAGE>
Securities and without impairing or releasing the subordination provided in this
Article or the obligations hereunder of the Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 13.10. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor; provided, however, that if the Trustee shall not have received the
notice provided for in this Section at least two Business Days prior to the date
upon which by the terms hereof any monies may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest (including any Additional Interest) on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall be
entitled to assume conclusively that such facts do not exist and the Trustee
shall have full power and authority to receive such monies and to apply the same
to the purpose for which they were received and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to conclusively rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the
89
<PAGE>
Trustee as to the amount of Senior Debt held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent of
the foregoing or other Person making such payment or distribution, delivered to
the Trustee or to the Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not
be liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 13.13. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
90
<PAGE>
SECTION 13.14. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment.
For the purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities shall not be deemed
to constitute a payment or distribution on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on Securities
or on account of the purchase or other acquisition of Securities, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
91
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
Houston Lighting & Power Company
By
------------------------------
Name:
---------------------------
Title: Vice President
The Bank of New York,
as trustee
By:
-----------------------------
Name:
Title:
92
<PAGE>
Exhibit 4.2-A
================================================================
HOUSTON LIGHTING & POWER COMPANY
to
THE BANK OF NEW YORK, as Trustee
--------------------------
SUPPLEMENTAL INDENTURE No. [ ]
Dated as of _________ __, 1997
--------------------------
____% Junior Subordinated Deferrable Interest Debentures
Series __
$__________________
[CAPITAL SECURITIES]
================================================================
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
SUPPLEMENTAL INDENTURE No. [ ]
$_________________
____% Junior Subordinated Deferrable Interest Debentures
Series __
SUPPLEMENTAL INDENTURE No. __, dated as of ________ __, 1997, between
HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the "Company"), and THE
BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee").
Recitals
--------
The Company has heretofore executed and delivered to the Trustee a
Junior Subordinated Indenture, dated as of ______________ __, 1997 (the
"Indenture"), providing for the issuance from time to time of series of the
Company's Securities.
Section 3.1 of the Indenture provides that various matters with
respect to any series of Securities issued under the Indenture may be
established in an indenture supplemental to the Indenture.
Section 9.1(3) of the Indenture provides that the Company and the
Trustee may enter into an indenture supplemental to the Indenture to establish
the form or terms of Securities of any series as permitted by Section 2.1 or 3.1
of the Indenture.
For and in consideration of the premises and the issuance of the
series of Securities provided for herein, it is mutually covenanted and agreed,
for the equal and proportionate benefit of the Holders of the Securities of such
series, as follows:
ARTICLE 1
Relation to Indenture; Definitions
Section 1.1. This Supplemental Indenture No. [ ] constitutes an
integral part of the Indenture.
Section 1.2. For all purposes of this Supplemental Indenture No. [ ]:
(1) Capitalized terms used herein shall have the meanings specified
herein or in the Indenture or in the
<PAGE>
Amended and Restated Trust Agreement, dated as of ___________ __, 1997,
among the Company, as Depositor, The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, and the
Administrative Trustees named therein, as the case may be.
(2) "Securities Trust" means HL&P Capital Trust [ ], a statutory
business trust formed by the Company under Delaware law to issue Preference
Securities, the proceeds of which will be used to purchase the Securities.
(3) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. [ ]; and
(4) The terms "herein", "hereof", "hereunder" and other words of
similar import refer to this Supplemental Indenture No. [ ].
ARTICLE 2
The Series of Securities
Section 2.1. Title of the Securities. There shall be a series of
-----------------------
Securities designated the "____% Junior Subordinated Deferrable Interest
Debentures, Series __" (the "Series __ Securities").
Section 2.2. Limitation on Aggregate Principal Amount; Date of
-------------------------------------------------
Series __ Securities. The aggregate principal amount of the Series __
- --------------------
Securities shall be limited to $____________; provided, however, that the
-------- -------
authorized aggregate principal amount of the Series __ Securities may be
increased above such amount by a Board Resolution to such effect. Each Series
__ Security shall be dated the date of its authentication.
Section 2.3. Stated Maturity. The Stated Maturity of the Series __
---------------
Securities shall be ____________; _____; provided, if a Tax Event occurs, then
--------
the Company will have the right (a) prior to the dissolution of the Securities
Trust, to advance the Stated Maturity of the Series __ Securities to the minimum
extent required, but not less than 19 and one-half years from the date of the
Original Issue Date, or (b) to dissolve the Securities Trust (if not previously
dissolved) and advance the Stated Maturity of the Series __ Securities to the
minimum extent required, but not less than 19 and one-half years from the date
of the Original Issue Date, in each case such that in the opinion of counsel to
the Company, after advancing the Stated Maturity, interest
2
<PAGE>
paid on the Series __ Securities will be deductible for federal income tax
purposes.
Section 2.4. Interest and Interest Rates. The rate of interest on
---------------------------
each Series __ Security shall be ____% per annum, accruing from _____________
__, 199__ and, subject to Section 2.5, interest shall be payable, semi-annually
in arrears, on __________ 1 and __________ 1 of each year (each such date, an
"Interest Payment Date"), commencing __________, 199__. The rate of any
Additional Interest that shall accrue on each Series __ Security shall be at the
same rate per annum as the interest rate on such Series __ Security. The amount
of interest payable for any period shall be computed on the basis of a 360-day
year of twelve 30-day months. The amount of interest payable for any partial
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the number of days elapsed in a partial month. In the event that any date on
which interest is payable on a Series __ Security is not a Business Day, then a
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name such Series __ Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest installment. In the event interest payable
on any Series __ Security is not punctually paid or duly provided for on any
Interest Payment Date, such interest shall forthwith cease to be payable to the
Holder on the applicable Regular Record Date and shall either (i) be paid to the
Person in whose name such Series __ Security (or one or more Predecessor
Securities) is registered at the close of business on the Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Series __ Securities not less than 10
days prior to such Special Record Date, or (ii) be paid to the Holder at such
time in such lawful manner not inconsistent with the requirements of any
securities exchange, the Nasdaq National Market or other applicable interdealer
quotation system or self-regulatory organization on which the Series __
Securities may be listed, and upon such notice as may be required by such
exchange or other self-regulatory organization, all as more fully provided in
the Indenture.
3
<PAGE>
Section 2.5. Extension of Interest Payment Period. (a) So long as
------------------------------------
no Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of the Series __
Securities, from time to time, to defer the payment of interest on the Series __
Securities for up to 10 consecutive semi-annual periods with respect to each,
during which Extension Periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date; provided however that no
Extension Period may extend beyond the Stated Maturity of the Series __
Securities. At the end of any such Extension Period the Company shall pay all
interest then accrued and unpaid on the Securities (together with Additional
Interest thereon, if any, to the extent permitted by applicable law), provided,
--------
that during any such Extension Period, the Company will not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal or of interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
---- -----
with or junior in interest to the Series __ Securities or make any guarantee
payments with respect to any guarantee by the Company or the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
---- -----
in interest to the Securities (other than (a) dividends or distributions in
capital stock of the Company, (b) any declaration of a dividend under a Rights
Plan or in connection with the implementation of a Rights Plan, the issuance of
capital stock of the Company under a Rights Plan or the redemption or repurchase
of any such rights distributed pursuant to a Rights Plan, (c) payments under the
HL&P Guarantee and (d) purchases of Common Stock or rights related to the
issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees, related to the issuance of Common Stock or
rights under a dividend reinvestment and stock purchase plan or related to the
issuance of Common Stock (or securities convertible into or exchangeable for
common stock) as consideration in an acquisition transaction that was entered
into prior to the commencement of such Extension Period). Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest on the Series __ Securities, provided that no Extension
--------
Period shall exceed 10 consecutive semi-annual periods or extend beyond the
Stated Maturity of the Series __ Securities. Upon termination of any such
Extension Period and upon the payment of all accrued and unpaid, including
Additional Interest, if any, then due, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
shall give the Property Trustee, the Administrative Trustees and the
4
<PAGE>
Trustee notice of its election to begin any such Extension Period at least one
Business Day prior to the earliest of (i) the date the Distributions on the
Capital Securities would have been payable except for the election to begin such
Extension Period, (ii) the date the Administrative Trustees are required to give
notice to any securities exchange, the Nasdaq National Market or other
applicable stock exchange or automated quotation system or to holders of such
Capital Securities of the record date for such Distributions or (iii) the date
such Distributions are payable, but in any event not less than one Business Day
prior to such record date. The Trustee shall promptly give notice of the
Company's election to begin any such Extension Period to the holders of the
outstanding Capital Securities.
Section 2.6. Place of Payment. The Place of Payment where the
----------------
Securities may be presented or surrendered for payment, where the Securities may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Series __ Securities and the
Indenture may be served shall be the Corporate Trust Office of the Trustee.
Section 2.7. Redemption. The Company has the right to redeem the
----------
Series __ Securities (i) on or after __, 20__, in whole at any time or
in part from time to time, or (ii) prior to _______ 1, 20__, in whole (but not
in part) within 90 days following the occurrence of a Special Event, in each
case subject to the provisions of Article XI of the Indenture.
The Redemption Price, in the case of a redemption under (i) above,
shall equal the following prices expressed in percentages of the principal
amount hereof, plus accrued and unpaid interest, including Additional Interest,
if any, to the Redemption Date. If redeemed during the 12 month period
beginning 1:
Year Percentage
---- ----------
and at 100% on or after _______ 1, 20__.
The Redemption Price, in the case of a redemption following a Special
Event as described under (ii) above, shall equal the Make-Whole Amount plus
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date. The "Make-Whole Amount" shall be equal to the greater of (i)
100% of the principal amount of the Series Securities or (ii) as determined by
a Quotation Agent (as defined below), the sum of the present values of the
principal amount and premium payable as part of the
5
<PAGE>
Redemption Price with respect to an optional redemption of such Series __
Security on _______ __, 20__, together with scheduled payments of interest from
the Redemption Date to _______ __, 20__ (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined below).
"Adjusted Treasury Rate" means with respect to any Redemption Date,
the Treasury Rate (as defined below) plus (i) __________ if such Redemption Date
occurs on or before ____________________ or (ii) _________ if such Redemption
Date occurs after ____________, ____.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life (if
no maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue (as defined below), calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price (as defined below) for such Redemption
Date. The Treasury Rate shall be calculated on the third Business Day preceding
the Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption
Date, the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after _______ __, 20__,
the two most closely corresponding United States Treasury securities shall be
used as the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated
6
<PAGE>
or extrapolated on a straight-line basis, rounding to the nearest month using
such securities.
"Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations (as defined below) for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(ii) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Quotation Agent" means Goldman, Sachs & Co. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
- -------- -------
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Section 2.8. Distribution of Series __ Securities. At any time, the
----------------------
Company may terminate the Securities Trust and cause the Series __ Securities to
be distributed to Holders of the Trust Securities in liquidation of the
Securities Trust.
Section 2.9. Denomination. The Series __ Securities shall be in
------------
registered form without coupons and shall be issuable in denominations of $1,000
and integral multiples thereof.
Section 2.10. Currency. Principal and interest on the Series __
--------
Securities shall be payable in Dollars.
Section 2.11. Form of Securities. The Series __ Securities shall be
------------------
substantially in the form attached as Exhibit A hereto.
Section 2.12. Securities Registrar and Paying Agent. The Trustee
-------------------------------------
shall initially serve as Series __ Securities Registrar and Paying Agent.
7
<PAGE>
Section 2.13. Sinking Fund Obligations. The Company has no
------------------------
obligation to redeem or purchase any Securities pursuant to any sinking fund or
analogous requirement or upon the happening of a specified event or at the
option of a Holder thereof.
ARTICLE 3
Miscellaneous Provisions
Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No. [ ], is in all respects hereby adopted, ratified and
confirmed.
Section 3.2. This Supplemental Indenture No. [ ] may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 3.3. THIS SUPPLEMENTAL INDENTURE NO. [ ] AND EACH SERIES __
SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 1 to be duly executed, as of the day and year first written above.
HOUSTON LIGHTING & POWER COMPANY
By: ______________________________
Name:
Title:
Attest: ______________________________
THE BANK OF NEW YORK,
as Trustee
By: ______________________________
Name:
Title:
9
<PAGE>
Exhibit A
---------
[FORM OF FACE OF SECURITY]
IF THE SECURITY IS TO BE A GLOBAL SECURITY - This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in limited
circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Houston Lighting &
Power Company or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
HOUSTON LIGHTING & POWER COMPANY
____% Junior Subordinated Deferrable Interest Debentures
Series __
No. _______________ $_____________
CUSIP ________
HOUSTON LIGHTING & POWER COMPANY, a corporation organized and existing
under the laws of Texas (hereinafter called the "Company"), which term includes
-------
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________, or registered assigns,
the principal sum of _____________ Dollars on __________, _______; provided, if
--------
a Tax Event occurs, then the Company will have the right (a) prior to the
dissolution of the Securities Trust, to advance the
A-1
<PAGE>
Stated Maturity of the Securities to the minimum extent required, but not less
than 19 and one-half years from the date of Original Issue Date, or (b) to
dissolve the Securities Trust (if not previously dissolved) and advance the
Stated Maturity of the Securities to the minimum extent required, but not less
than 19 and one-half years from the date of Original Issue Date, in each case
such that in the opinion of counsel to the Company, after advancing the maturity
date, interest paid on the Securities will be deductible for federal income tax
purposes. The Company further promises to pay interest on said principal sum
from ____________ __, 199_ or from the most recent interest payment date (each
such date, an "Interest Payment Date") on which interest has been paid or duly
---------------------
provided for, semi-annually (subject to deferral as set forth herein) in arrears
on _______ 1 and _______ 1 of each year, commencing ___________, 199__, at the
rate of ____% per annum, until the principal hereof shall have become due and
payable, plus Additional Interest, if any, until the principal hereof is paid or
duly provided for or made available for payment and on any overdue principal and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
rate of ____% per annum, compounded semi-annually. The amount of interest
payable for any period will be computed on the basis of twelve 30-day months and
a 360-day year. The amount of interest payable for any partial period shall be
computed on the basis of a 360-day year of twelve 30-day months and the days
elapsed in any partial month. In the event that any date on which interest is
payable on this Security is not a Business Day, then a payment of the interest
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on the date the payment was
originally payable. A "Business Day" shall mean any day other than (i) a
------------
Saturday or Sunday, (ii) a day on which banking institutions in the City of New
York are authorized or required by law or executive order to remain closed or
(iii) a day on which the Corporate Trust Office of the Trustee or with respect
to the Securities of this series initially issued to any HL&P Trust the
principal office of the Property Trustee under the Trust Agreement is closed for
business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
close of business on the Business Day next preceding such Interest Payment Date.
Any such interest installment not so punctually paid or duly provided for
A-2
<PAGE>
shall forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, the Nasdaq National Market or other applicable interdealer
quotation system or self-regulatory organization on which the Securities of this
series may be listed or traded, and upon such notice as may be required by such
exchange or other self-regulatory organization, all as more fully provided in
said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Security, from
time to time, to defer the payment of interest on such Security for up to 10
consecutive semi-annual periods with respect to each deferral period (each an
"Extension Period"); provided, however that no Extension Period may extend the
- -----------------
Stated Maturity of the Security. During such Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to the extent
permitted by applicable law); provided that during any such Extension Period,
--------
the Company will not, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock or (ii) make any payment of principal or of interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to this Security or make
---- -----
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
---- -----
with or junior in interest to the Securities (other than (a) dividends or
distributions in Capital Stock of the Company, (b) any declaration of a dividend
under a Rights Plan or in connection with the implementation of a Rights Plan,
the issuance of capital stock of the Company under a Rights Plan or the
redemption or repurchase of any such rights distributed pursuant to a Rights
Plan, (c) payments under any HL&P Guarantee and (d) purchases of Common Stock
related to the issuance of Common Stock under any of the Company's benefit plans
for its directors, officers or employees, related to the issuance of Common
Stock or rights under a dividend reinvestment and stock purchase plan or related
to the issuance of Common Stock (or securities convertible into or exchangeable
for common stock) as consideration in an acquisition transaction
A-3
<PAGE>
that was entered into prior to the commencement of such Extension Period).
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that no Extension Period shall
--------
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of this Security. Upon the termination of any such Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest then due,
the Company may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period
except at the end thereof. The Company shall give the Property Trustee, the
Administrative Trustees and the Trustee notice of its election to begin an
Extension Period at least one Business Day prior to the earliest of (i) the date
the Distributions on the Capital Securities would have been payable except for
the election to begin such Extension Period, (ii) the date the Administrative
Trustees are required to give notice to any securities exchange, the Nasdaq
National Market or other applicable stock exchange or automated quotation system
or self-regulatory organization or to holders of such Capital Securities of the
record date for such Distributions or (iii) the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that except in the case of a Glodal Security
-------- -------
at the option of the Company payment of interest may be made (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register or (ii) by wire transfer in immediately available funds
at such place and to such account as may be designated in writing by the Person
entitled thereto as specified in the Securities Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in
A-4
<PAGE>
the Indenture by each holder of Senior Debt, whether not outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
HOUSTON LIGHTING & POWER COMPANY
By:
------------------------------
Authorized Officer
Attest:
- ------------------------------
[Secretary]
Dated:
This is one of the Securities referred to in the within mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------
Authorized Signatory
A-5
<PAGE>
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
----------
more series under a Junior Subordinated Indenture, dated as of _________ __,
1997 (herein called the "Indenture"), between the Company and The Bank of New
---------
York, as Trustee (herein called the "Trustee", which term includes any successor
-------
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $__________________.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of ___________ __, 199__
(the "Trust Agreement"), for the Securities Trust among Houston Lighting & Power
---------------
Company, as Depositor, and the Trustees named therein, shall have the meanings
assigned to them in the Indenture or the Trust Agreement, as the case may be.
The Company has the right to redeem this Security (i) on or after
____________ __, 20__, in whole at any time or in part from time to time, or
(ii) prior to ___________ 1, 20__, in whole (but not in part) within 90 days
following the occurrence of a Special Event, in each case subject to the
provisions of Article XI of the Indenture.
The Redemption Price, in the case of a redemption under (i) above,
shall equal the following prices expressed in percentages of the principal
amount hereof, plus accrued and unpaid interest, including Additional Interest,
if any, to the Redemption Date. If redeemed during the 12 month period
beginning _________ 1:
Year Percentage
---- ----------
and at 100% on or after ____________ 1, 20__.
The Redemption Price, in the case of a redemption following a Special
Event, as described under (ii) above, shall equal the Make-Whole Amount plus
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date. The "Make-Whole Amount" shall be equal to
A-6
<PAGE>
the greater of (i) 100% of the principal amount hereof or (ii) as determined by
a Quotation Agent (as defined below), the sum of the present values of the
principal amount and premium payable as part of the Redemption Price with
respect to an optional redemption hereof on _______ __, 20__, together with
scheduled payments of interest from the Redemption Date to _______ __, 20__ (the
"Remaining Life"), in each case discounted to the Redemption Date on a semi-
annual basis (assuming a 360-day year consisting of 30-day months) at the
Adjusted Treasury Rate (as defined below).
"Adjusted Treasury Rate" means with respect to any Redemption Date,
the Treasury Rate (as defined below) plus (i) ______ if such Redemption Date
occurs on or before ___________________ or (ii) _____ if such Redemption Date
occurs after ____________________.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life (if
no maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue (as defined below), calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price (as defined below) for such Redemption
Date. The Treasury Rate shall be calculated on the third Business Day preceding
the Redemption Date.
"Comparable Treasury Issue" means, with respect to any Redemption
Date, the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after _______ __, 20__,
the two most closely corresponding United
A-7
<PAGE>
States Treasury securities shall be used as the Comparable Treasury Issue, and
the Treasury Rate shall be interpolated or extrapolated on a straight-line
basis, rounding to the nearest month using such securities.
"Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations (as defined below) for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(ii) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Quotation Agent" means Goldman, Sachs & Co. and their successors;
provided however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Each Security of this series that shall be subject to a partial
redemption shall be redeemable only in the amount of $1000 or, in the case the
Securities of this Series are issued to the Securities Trust, $1000, or integral
multiples thereof.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security
A-8
<PAGE>
upon compliance by the Company with certain conditions set forth in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
--------
the Securities of a series issued to the Securities Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series fail to declare the principal amount
(or, if the Securities of that series are Discount Securities, such portion of
the principal amount as may be specified in the terms of that series) of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration such principal amount (or
specified amount) of and the accrued interest (including any Additional
Interest) on all the Securities of such series shall become immediately due and
payable, provided that the payment of principal and interest (including any
--------
A-9
<PAGE>
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article Thirteen of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
A-10
<PAGE>
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
A-11
<PAGE>
Exhibit 4.2(B)
================================================================================
HOUSTON LIGHTING & POWER COMPANY
to
THE BANK OF NEW YORK, as Trustee
--------------------------
SUPPLEMENTAL INDENTURE No. [ ]
Dated as of ______________ __, 1997
--------------------------
____% Junior Subordinated Deferrable Interest Debentures
Series __
$________________
[PREFERRED SECURITIES]
================================================================================
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
SUPPLEMENTAL INDENTURE No. [ ]
$_______________
____% Junior Subordinated Deferrable Interest Debentures
Series __
SUPPLEMENTAL INDENTURE No. 1, dated as of ____________ __, 1997,
between HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the "Company"),
and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the
"Trustee").
Recitals
--------
The Company has heretofore executed and delivered to the Trustee a
Junior Subordinated Indenture, dated as of _____________ __, 1997 (the
"Indenture"), providing for the issuance from time to time of series of the
Company's Securities.
Section 3.1 of the Indenture provides that various matters with
respect to any series of Securities issued under the Indenture may be
established in an indenture supplemental to the Indenture.
Section 9.1(3) of the Indenture provides that the Company and the
Trustee may enter into an indenture supplemental to the Indenture to establish
the form or terms of Securities of any series as permitted by Section 2.1 or 3.1
of the Indenture.
For and in consideration of the premises and the issuance of the
series of Securities provided for herein, it is mutually covenanted and agreed,
for the equal and proportionate benefit of the Holders of the Securities of such
series, as follows:
ARTICLE 1
Relation to Indenture; Definitions
Section 1.1. This Supplemental Indenture No. [__] constitutes an
integral part of the Indenture.
Section 1.2. For all purposes of this Supplemental Indenture
No. [__]:
<PAGE>
(1) Capitalized terms used herein shall have the meanings specified
herein or in the Indenture or in the Amended and Restated Trust Agreement,
dated as of ____________ __, 1997, among the Company, as Depositor, The
Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, and the Administrative Trustees named therein, as the
case may be.
(2) "Securities Trust" means HL&P Capital Trust [__], a statutory
business trust formed by the Company under Delaware law to issue Preference
Securities, the proceeds of which will be used to purchase the Securities.
(3) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. [_]; and
(4) The terms "herein", "hereof", "hereunder" and other words of
similar import refer to this Supplemental Indenture No. [__].
ARTICLE 2
The Series of Securities
Section 2.1. Title of the Securities. There shall be a series of
-----------------------
Securities designated the "____% Junior Subordinated Deferrable Interest
Debentures, Series __" (the "Series __ Securities").
Section 2.2. Limitation on Aggregate Principal Amount; Date of
-------------------------------------------------
Series __ Securities. The aggregate principal amount of the Series __
- --------------------
Securities shall be limited to $___________; provided, however, that the
-------- -------
authorized aggregate principal amount of the Series __ Securities may be
increased above such amount by a Board Resolution to such effect. Each Series
__ Security shall be dated the date of its authentication.
Section 2.3. Stated Maturity. The Stated Maturity of the Series __
---------------
Securities shall be __________, _____; provided, if a Tax Event occurs, then the
--------
Company will have the right (a) prior to the dissolution of the Securities
Trust, to advance the Stated Maturity of the Securities to the minimum extent
required, but not less than 19 and one-half years from the date of the Original
Issue Date, or (b) to dissolve the Series ___ Securities Trust (if not
previously dissolved) and advance the Stated Maturity of the Securities to the
minimum extent required, but not less than 19 and one-half years from the date
of the Original Issue Date, in
2
<PAGE>
each case such that in the opinion of counsel to the Company, after advancing
the Stated Maturity, interest paid on the Series __ Securities will be
deductible for federal income tax purposes.
Section 2.4. Interest and Interest Rates. The rate of interest on
---------------------------
each Series __ Security shall be ____% per annum, accruing from ____________
__, 199_ and, subject to Section 2.5, interest shall be payable, quarterly in
arrears, on ________, _______, ____________ and ___________ of each year (each
such date, an "Interest Payment Date"), commencing __________, 199_. The rate
of any Additional Interest that shall accrue on each Series __ Security shall be
at the same rate per annum as the interest rate on such Series __ Security. The
amount of interest payable for any period shall be computed on the basis of a
360-day year of twelve 30-day months. The amount of interest payable for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the number of days elapsed in a partial month. In the event that any
date on which interest is payable on a Series __ Security is not a Business Day,
then a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name such Series __ Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest installment. In the event interest payable
on any Series __ Security is not punctually paid or duly provided for on any
Interest Payment Date, such interest shall forthwith cease to be payable to the
Holder on the applicable Regular Record Date and shall either (i) be paid to the
Person in whose name such Series __ Security (or one or more Predecessor
Securities) is registered at the close of business on the Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Series __ Securities not less than 10
days prior to such Special Record Date, or (ii) be paid to the Holder at such
time in such lawful manner not inconsistent with the requirements of any
securities exchange, the Nasdaq National Market or other applicable interdealer
quotation system or self-regulatory organization on which the Series __
Securities may be listed, and upon such notice as may be required by such
exchange or other self-regulatory organization, all as more fully provided in
the Indenture.
3
<PAGE>
Section 2.5. Extension of Interest Payment Period. (a) So long as
------------------------------------
no Event of Default has occurred and is continuing, the Company shall have the
right, at any time and from time to time during the term of the Series __
Securities to defer the payment of interest on the Securities for up to 20
consecutive quarterly periods with respect to each Extension Period, during
which Extension Periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date; provided, however that no
Extension Period may extend beyond the Stated Maturity of the Series __
Securities. At the end of any such Extension Period, the Company shall pay all
interest then accrued and unpaid on the Series __ Securities (together with
Additional Interest thereon, if any, to the extent permitted by applicable law);
provided, that during any such Extension Period, the Company will not, (i)
- --------
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock or (ii) make any payment of principal or of interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu with or junior in interest to the Series __ Securities or make any
- ---- -----
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company, if such guarantee ranks pari passu
---- -----
with or junior in interest to the Series __ Securities (other than (a) dividends
or distributions in capital stock of the Company, (b) any declaration of a
dividend under a Rights Plan or in connection with the implementation of a
Rights Plan, the issuance of capital stock of the Company under a Rights Plan or
the redemption or repurchase of any such rights distributed pursuant to a Rights
Plan, (c) payments under the HL&P Guarantee and (d) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers or employees, related to the issuance
of Common Stock or rights under a dividend reinvestment and stock purchase plan
or related to the issuance of Common Stock (or securities convertible into or
exchangeable for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension Period). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest on the Series __ Securities, provided that no Extension
--------
Period shall exceed 20 consecutive quarters or extend beyond the Stated Maturity
of the Series __ Securities. Upon termination of any such Extension Period and
upon the payment of all interest then accrued and unpaid, including Additional
Interest, if any, then due, the Company may elect to begin a new 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
4
<PAGE>
Trustee, the Administrative Trustees and the Trustee notice of its election to
begin any such Extension Period at least one Business Day prior to the earliest
of (i) the date the Distributions on the Preferred Securities would have been
payable except for the election to begin such Extension Period, (ii) the date
the Administrative Trustees are required to give notice to any securities
exchange, the Nasdaq National Market or other applicable stock exchange or
automated quotation system or to holders of such Series __ Securities of the
record date for such Distributions or (iii) the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date. The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the holders of the outstanding Preferred
Securities.
Section 2.6. Place of Payment. The Place of Payment where the
----------------
Securities may be presented or surrendered for payment, where the Securities may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Series __ Securities and the
Indenture may be served shall be the Corporate Trust Office of the Trustee.
Section 2.7. Redemption. At any time on or after ,
----------
the Company may, at its option, subject to the terms and conditions of Article
XI of the Indenture, redeem the Series __ Securities in whole at any time or in
part from time to time, without premium or penalty, at a redemption price equal
to 100% of the principal amount thereof plus the accrued and unpaid interest,
including Additional Interest, if any, to the Redemption Date; provided that in
the event partial redemption of the Series __ Securities would result in the
delisting of the Preference Securities issued by the Securities Trust, the
Company may only redeem the Series __ Securities in whole.
If a Special Event in respect of the Securities Trust shall occur and
be continuing, the Company may, at its option, redeem the Series __ Securities
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of Article XI of the Indenture. The redemption
price for any Series __ Security so redeemed shall be equal to 100% of the
principal amount thereof plus accrued and unpaid interest, including Additional
Interest, if any, to the Redemption Date.
Section 2.8. Distribution of Series __ Securities. At any time, the
----------------------
Company may terminate the Securities Trust and cause the Series __ Securities to
be distributed to Holders of the Trust Securities in liquidation of the
Securities Trust.
Section 2.9. Denomination. The Series __ Securities shall be in
------------
registered form without coupons and shall be issuable in denominations of $25
and integral multiples thereof.
5
<PAGE>
Section 2.10. Currency. Principal and interest on the Series __
--------
Securities shall be payable in Dollars.
Section 2.11. Form of Securities. The Series __ Securities shall be
------------------
substantially in the form attached as Exhibit A hereto.
Section 2.12. Securities Registrar and Paying Agent. The Trustee
-------------------------------------
shall initially serve as Securities Registrar and Paying Agent.
Section 2.13. Sinking Fund Obligations. The Company has no
------------------------
obligation to redeem or purchase any Series __ Securities pursuant to any
sinking fund or analogous requirement or upon the happening of a specified event
or at the option of a Holder thereof.
ARTICLE 3
Miscellaneous Provisions
Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No. [__], is in all respects hereby adopted, ratified and
confirmed.
Section 3.2. This Supplemental Indenture No. [__] may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 3.3. THIS SUPPLEMENTAL INDENTURE NO. [__] AND EACH SERIES __
SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. [__] to be duly executed, as of the day and year first written
above.
HOUSTON LIGHTING & POWER COMPANY
By: ______________________________
Name:
Title:
Attest: ______________________________
THE BANK OF NEW YORK,
as Trustee
By: ______________________________
Name:
Title:
7
<PAGE>
Exhibit A
---------
[FORM OF FACE OF SECURITY]
IF THE SECURITY IS TO BE A GLOBAL SECURITY - This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in limited
circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Houston Lighting &
Power Company or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
HOUSTON LIGHTING & POWER COMPANY
____% Junior Subordinated Deferrable Interest Debentures
Series __
No. _______________ $_____________
CUSIP ________
HOUSTON LIGHTING & POWER COMPANY, a corporation organized and existing
under the laws of Texas (hereinafter called the "Company"), which term includes
-------
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________, or registered assigns,
the principal sum of _____________ Dollars on __________, ______; provided, if a
--------
Tax Event occurs, then the Company will have the right (a) prior to the
dissolution of the Securities Trust, to advance the
A-1
<PAGE>
Stated Maturity of the Securities to the minimum extent required, but not less
than 19 and one-half years from the date of Original Issue Date, or (b) to
dissolve the Securities Trust (if not previously dissolved) and advance the
Stated Maturity of the Securities to the minimum extent required, but not less
than 19 and one-half years from the Original Issue Date, in each case such that
in the opinion of counsel to the Company, after advancing the maturity date,
interest paid on the Securities will be deductible for federal income tax
purposes. The Company further promises to pay interest on said principal sum
from __________ __, 199_ or from the most recent interest payment date (each
such date, an "Interest Payment Date") on which interest has been paid or duly
---------------------
providing for, quarterly (subject to deferral as set forth herein) in arrears on
________,________, ________ and ________ of each year, commencing ___________,
199_, at the rate of ____% per annum, until the principal hereof shall have
become due and payable, plus Additional Interest, if any, until the principal
hereof is paid or duly provided for or made available for payment and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of ____% per annum, compounded quarterly. The amount of
interest payable for any period will be computed on the basis of twelve 30-day
months and a 360-day year. The amount of interest payable for any partial period
shall be computed on the basis of a 360-day year of twelve 30-day months and the
number of days elapsed in a partial month. In the event that any date on which
interest is payable on this Security is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than
------------
(i) a Saturday or Sunday, (ii) a day on which banking institutions in the City
of New York are authorized or required by law or executive order to remain
closed or (iii) a day on which the Corporate Trust Office of the Trustee or,
with respect to the Securities of this series initially issued to an HL&P Trust,
the principal office of the Property Trustee under the Trust Agreement is closed
for business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
close of business on the Business Day next preceding such Interest Payment Date.
Any such interest installment not so punctually paid or duly provided for
A-2
<PAGE>
shall forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, the Nasdaq National Market or other applicable interdealer
quotation system or self-regulatory organization on which the Securities of this
series may be listed or traded, and upon such notice as may be required by such
exchange or other self-regulatory organization, all as more fully provided in
said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Security, from
time to time, to defer the payment of interest on such Security for up to 20
consecutive quarterly periods with respect to each deferral period (each an
"Extension Period"), provided, however that no Extension Period may extend the
----------------
Stated Maturity of the Security. During such Extension Periods the Company shall
have the right to make partial payments of interest on any Interest Payment
Date, and at the end of which the Company shall pay all interest then accrued
and unpaid (together with Additional Interest thereon to the extent permitted
by applicable law); provided that during any such Extension Period, the Company
--------
will not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment of principal or of interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to this Security or make
---- -----
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
---- -----
with or junior in interest to the Securities (other than (a) dividends or
distributions in capital stock of the Company, (b) any declaration of a dividend
under a Rights Plan in connection with the implementation of a Rights Plan, the
issuance of capital stock of the Company under a Rights Plan or the redemption
or repurchase of any such rights distributed pursuant to a Rights Plan, (c)
payments under any HL&P Guarantee and (d) purchases of Common Stock related to
the issuance of Common Stock or rights under any of the Company's benefit plans
for its directors, officers or employees, related to the issuance of Common
Stock or rights under a dividend reinvestment and stock purchase plan or related
to the issuance of Common Stock (or securities convertible into or exchangeable
for common stock) as consideration in an acquisition transaction
A-3
<PAGE>
that was entered into prior to the commencement of such Extension Period). Prior
to the termination of any such Extension Period, the Company may further extend
the interest payment period, provided that no Extension Period shall exceed 20
--------
consecutive quarters or extend beyond the Maturity of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period except at the end thereof.
The Company shall give the Property Trustee, the Administrative Trustees and the
Trustee notice of its election to begin an Extension Period at least one
Business Day prior to the earliest of (i) the date the Distributions on the
Preferred Securities would have been payable except for the election to begin
such Extension Period, (ii) the date the Administrative Trustees are required to
give notice to any securities exchange, the Nasdaq National Market or other
applicable stock exchange as automated quotation system or self-regulatory
organization or to holders of such Preferred Securities of the record date for
such Distributions or (iii) the date such Distributions are payable, but in any
event not less than one Business Day prior to such record date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that except in the case of a Glodal Security
-------- -------
at the option of the Company payment of interest may be made (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register or (ii) by wire transfer in immediately available funds
at such place and to such account as may be designated by the Person entitled
thereto as specified in the Securities Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in
A-4
<PAGE>
the Indenture by each holder of Senior Debt, whether not outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
HOUSTON LIGHTING & POWER COMPANY
By:
------------------------------
Authorized Officer
Attest:
- ------------------------------
[Secretary]
This is one of the Securities referred to in the within mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
A-5
<PAGE>
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (hereinafter called the "Securities"), issued and to be issued in one or
----------
more series under a Junior Subordinated Indenture, dated as of ___________ __,
1997 (herein called the "Indenture"), between the Company and The Bank of New
---------
York, as Trustee (herein called the "Trustee", which term includes any successor
-------
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $___________________.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of _________________ __,
199_ (the "Trust Agreement"), for the Securities Trust among Houston Lighting &
---------------
Power Company, as Depositor, and the Trustees named therein, shall have the
meanings assigned to them in the Indenture or the Trust Agreement, as the case
may be.
On or after ____________ __, 20__, the Company may at any time, at its
option, subject to the terms and conditions of Article XI of the Indenture,
redeem this Security in whole at any time or in part from time to time, without
premium or penalty, at a redemption price equal to 100% of the principal amount
thereof plus the accrued and unpaid interest, including Additional Interest,if
any, to the Redemption Date; provided that in the event partial redemption of
the Securities would result in the delisting of the Preferred Securities issued
by the Securities Trust, the Company may only redeem the Securities in whole.
If a Special Event in respect of the Securities Trust shall occur and
be continuing, the Company may, at its option, redeem this Security within 90
days of the occurrence of such Special Event, in whole but not in part, subject
to the provisions of Article XI of the Indenture. The redemption price for any
Security so redeemed shall be equal to 100% of the principal amount thereof plus
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date.
Each Security of this series that shall be subject to a partial
redemption, shall be redeemable only in the amount of $25 or, in the case the
Securities of this Series are issued to the Securities Trust, $25, or integral
multiples thereof.
A-6
<PAGE>
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
--------
the Securities of a series issued to the Securities Trust, if, upon an Event of
Default, the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities
A-7
<PAGE>
of that series fail to declare the principal amount (or, if the Securities of
that series are Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all the Securities of that series
to be immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the corresponding series of Preferred Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee; and upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Interest) on all
the Securities of such series shall become immediately due and payable, provided
--------
that the payment of principal and interest (including any Additional Interest)
on such Securities shall remain subordinated to the extent provided in Article
Thirteen of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
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,
A-8
<PAGE>
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
A-9
<PAGE>
Exhibit 4.3-A
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST I
THIS CERTIFICATE OF TRUST of HL&P Capital Trust I (the "Trust"), dated
January 10, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. (S)3801 et seq.).
------ -- ---
1. Name. The name of the business trust being formed hereby is
----
HL&P Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
--------------
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
-----------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
Exhibit 4.3-B
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST II
THIS CERTIFICATE OF TRUST of HL&P Capital Trust II (the "Trust"),
dated January 10, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. (S) 3801 et seq.).
--------- ------
1. Name. The name of the business trust being formed hereby is
----
HL&P Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
--------------
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
Exhibit 4.3-C
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST III
THIS CERTIFICATE OF TRUST of HL&P Capital Trust III (the "Trust"),
dated January 10, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. (S) 3801 et seq.).
--------- ------
1. Name. The name of the business trust being formed hereby is
----
HL&P Capital Trust III.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
--------------
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
--------------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
Exhibit 4.3-D
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST IV
THIS CERTIFICATE OF TRUST of HL&P Capital Trust IV (the "Trust"),
dated January 10, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. (S) 3801 et seq.).
------ ------
1. Name. The name of the business trust being formed hereby is
----
HL&P Capital Trust IV.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
--------------
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
-------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
Exhibit 4.4-A
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of January 10, 1997, between Houston
Lighting & Power Company, a Texas corporation, as "Depositor" and The Bank of
New York (Delaware), a Delaware banking corporation, as "Trustee." The
Depositor and the Trustee hereby agree as follows:
1. The Delaware business trust created hereby shall be known as
HL&P Capital Trust I, in which name the Trustee, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustee hereby declares that it 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. (S) 3801 et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustee is 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 Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as Exhibit 4.5-A or 4.5-B to the 1933 Act Registration
Statement (as defined 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 Trustee shall not have any duty or
obligation hereunder or with respect to 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. If such amended and restated Trust Agreement has
not been executed and delivered by the date which is 90 days after the date
hereof, the Trust shall automatically terminate on such date.
4. The Depositor, as the sponsor of the Trust, is hereby authorized
(i) to file with the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration Statement on
Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or
post-effective amendments to such 1933 Act Registration Statement (including any
prospectus, any prospectus supplement(s) and the exhibits contained therein),
relating to the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Preferred Securities of the Trust and certain other
securities and (b) if the Depositor shall deem it desirable, 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 of the
Securities Exchange Act of 1934, as amended; (ii) if the Depositor shall deem it
desirable, to file with one or more national securities exchange (each, an
1
<PAGE>
"Exchange") or the National Association of Securities Dealers, Inc. ("NASD") and
execute on behalf of the Trust a listing application or applications 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 any such Exchange or the NASD's Nasdaq National Market ("NASDAQ");
(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 the Depositor, on behalf of the Trust,
may deem necessary or desirable to register the Preferred Securities under state
securities or "Blue Sky" laws; (iv) to execute on behalf of the Trust such
Underwriting Agreements with one or more underwriters relating to the offering
of the Preferred Securities as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to in clauses
(i), (ii) or (iii) above is required by the rules and regulations of the
Commission, any Exchange, NASDAQ, the NASD or state securities or Blue Sky laws,
to be executed on behalf of the Trust by a Trustee, the Depositor and any
Trustee appointed pursuant to Section 6 hereof are hereby authorized to join in
any such filing and to execute on behalf of the Trust any and all of the
foregoing.
5. This Trust Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. The number of Trustees initially shall be one (1) 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. Any Trustee may resign upon thirty days' prior notice to the Depositor.
7. The Depositor agrees:
(a) to pay to each Trustee from time to time such reasonable
compensation for all services rendered by such Trustee hereunder as may be
agreed by the Depositor and such Trustee from time to time (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse each
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by such Trustee in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of such Trustee's agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence, bad
faith or willful misconduct; and
2
<PAGE>
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate (as defined below) of any
Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence, bad faith or misconduct with respect to such acts or omissions.
The term "Affiliate" shall have the meaning ascribed to such term in
Rule 405 promulgated under the Securities Act, in effect on the date hereof.
The provisions of this Section 7 shall survive the termination of the
Trust or the earlier termination or removal of any Trustee.
8. 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.
HOUSTON LIGHTING & POWER COMPANY,
as Depositor
By: /s/ Linda Geiger
-----------------------------------
Name: Linda Geiger
Title: Designated Agent
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
-----------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
3
<PAGE>
Exhibit 4.4-B
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of January 10, 1997, between Houston
Lighting & Power Company, a Texas corporation, as "Depositor" and The Bank of
New York (Delaware), a Delaware banking corporation, as "Trustee." The
Depositor and the Trustee hereby agree as follows:
1. The Delaware business trust created hereby shall be known as
HL&P Capital Trust II, in which name the Trustee, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustee hereby declares that it 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. (S) 3801 et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustee is 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 Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as Exhibit 4.5-A or 4.5-B to the 1933 Act Registration
Statement (as defined 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 Trustee shall not have any duty or
obligation hereunder or with respect to 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. If such amended and restated Trust Agreement has
not been executed and delivered by the date which is 90 days after the date
hereof, the Trust shall automatically terminate on such date.
4. The Depositor, as the sponsor of the Trust, is hereby authorized
(i) to file with the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration Statement on
Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or
post-effective amendments to such 1933 Act Registration Statement (including any
prospectus, any prospectus supplement(s) and the exhibits contained therein),
relating to the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Preferred Securities of the Trust and certain other
securities and (b) if the Depositor shall deem it desirable, 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 of the
Securities Exchange Act of 1934, as amended; (ii) if the Depositor shall deem it
desirable, to file with one or more national securities exchange (each, an
1
<PAGE>
"Exchange") or the National Association of Securities Dealers, Inc. ("NASD") and
execute on behalf of the Trust a listing application or applications 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 any such Exchange or the NASD's Nasdaq National Market ("NASDAQ");
(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 the Depositor, on behalf of the Trust,
may deem necessary or desirable to register the Preferred Securities under state
securities or "Blue Sky" laws; (iv) to execute on behalf of the Trust such
Underwriting Agreements with one or more underwriters relating to the offering
of the Preferred Securities as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to in clauses
(i), (ii) or (iii) above is required by the rules and regulations of the
Commission, any Exchange, NASDAQ, the NASD or state securities or Blue Sky laws,
to be executed on behalf of the Trust by a Trustee, the Depositor and any
Trustee appointed pursuant to Section 6 hereof are hereby authorized to join in
any such filing and to execute on behalf of the Trust any and all of the
foregoing.
5. This Trust Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. The number of Trustees initially shall be one (1) 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. Any Trustee may resign upon thirty days' prior notice to the Depositor.
7. The Depositor agrees:
(a) to pay to each Trustee from time to time such reasonable
compensation for all services rendered by such Trustee hereunder as may be
agreed by the Depositor and such Trustee from time to time (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse each
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by such Trustee in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of such Trustee's agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence, bad
faith or willful misconduct; and
2
<PAGE>
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate (as defined below) of any
Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence, bad faith or misconduct with respect to such acts or omissions.
The term "Affiliate" shall have the meaning ascribed to such term in
Rule 405 promulgated under the Securities Act, in effect on the date hereof.
The provisions of this Section 7 shall survive the termination of the
Trust or the earlier termination or removal of any Trustee.
8. 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.
HOUSTON LIGHTING & POWER COMPANY,
as Depositor
By: /s/ Linda Geiger
--------------------------------
Name: Linda Geiger
Title: Designated Agent
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
--------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
3
<PAGE>
Exhibit 4.4-C
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of January 10, 1997, between Houston
Lighting & Power Company, a Texas corporation, as "Depositor" and The Bank of
New York (Delaware), a Delaware banking corporation, as "Trustee." The
Depositor and the Trustee hereby agree as follows:
1. The Delaware business trust created hereby shall be known as
HL&P Capital Trust III, in which name the Trustee, or the Depositor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustee hereby declares that it 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. (S) 3801 et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the Trust. The
Trustee is 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 Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as Exhibit 4.5-A or 4.5-B to the 1933 Act Registration
Statement (as defined 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 Trustee shall not have any duty or
obligation hereunder or with respect to 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. If such amended and restated Trust Agreement has
not been executed and delivered by the date which is 90 days after the date
hereof, the Trust shall automatically terminate on such date.
4. The Depositor, as the sponsor of the Trust, is hereby authorized
(i) to file with the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration Statement on
Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or
post-effective amendments to such 1933 Act Registration Statement (including any
prospectus, any prospectus supplement(s) and the exhibits contained therein),
relating to the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Preferred Securities of the Trust and certain other
securities and (b) if the Depositor shall deem it desirable, 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 of the
Securities Exchange Act of 1934, as amended; (ii) if the Depositor shall deem it
desirable, to file with one or more national securities exchange (each, an
1
<PAGE>
"Exchange") or the National Association of Securities Dealers, Inc. ("NASD") and
execute on behalf of the Trust a listing application or applications 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 any such Exchange or the NASD's Nasdaq National Market ("NASDAQ");
(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 the Depositor, on behalf of the Trust,
may deem necessary or desirable to register the Preferred Securities under state
securities or "Blue Sky" laws; (iv) to execute on behalf of the Trust such
Underwriting Agreements with one or more underwriters relating to the offering
of the Preferred Securities as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to in clauses
(i), (ii) or (iii) above is required by the rules and regulations of the
Commission, any Exchange, NASDAQ, the NASD or state securities or Blue Sky laws,
to be executed on behalf of the Trust by a Trustee, the Depositor and any
Trustee appointed pursuant to Section 6 hereof are hereby authorized to join in
any such filing and to execute on behalf of the Trust any and all of the
foregoing.
5. This Trust Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. The number of Trustees initially shall be one (1) 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. Any Trustee may resign upon thirty days' prior notice to the Depositor.
7. The Depositor agrees:
(a) to pay to each Trustee from time to time such reasonable
compensation for all services rendered by such Trustee hereunder as may be
agreed by the Depositor and such Trustee from time to time (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse each
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by such Trustee in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of such Trustee's agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence, bad
faith or willful misconduct; and
2
<PAGE>
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate (as defined below) of any
Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence, bad faith or misconduct with respect to such acts or omissions.
The term "Affiliate" shall have the meaning ascribed to such term in
Rule 405 promulgated under the Securities Act, in effect on the date hereof.
The provisions of this Section 7 shall survive the termination of the
Trust or the earlier termination or removal of any Trustee.
8. 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.
HOUSTON LIGHTING & POWER COMPANY,
as Depositor
By: /s/ Linda Geiger
--------------------------------
Name: Linda Geiger
Title: Designated Agent
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
--------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
3
<PAGE>
Exhibit 4.4-D
TRUST AGREEMENT
---------------
This TRUST AGREEMENT, dated as of January 10, 1997, between Houston
Lighting & Power Company, a Texas corporation, as "Depositor" and The Bank of
New York (Delaware), a Delaware banking corporation, as "Trustee." The
Depositor and the Trustee hereby agree as follows:
1. The Delaware business trust created hereby shall be known as
HL&P Capital Trust IV, in which name the Trustee, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustee hereby declares that it 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. (S)3801 et seq. (the "Business Trust Act"), and
------ -- ---
that this document constitutes the governing instrument of the Trust. The
Trustee is 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 Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as Exhibit 4.5-A or 4.5-B to the 1933 Act Registration
Statement (as defined 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 Trustee shall not have any duty or
obligation hereunder or with respect to 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. If such amended and restated Trust Agreement has
not been executed and delivered by the date which is 90 days after the date
hereof, the Trust shall automatically terminate on such date.
4. The Depositor, as the sponsor of the Trust, is hereby authorized
(i) to file with the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration Statement on
Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or
post-effective amendments to such 1933 Act Registration Statement (including any
prospectus, any prospectus supplement(s) and the exhibits contained therein),
relating to the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the Preferred Securities of the Trust and certain other
securities and (b) if the Depositor shall deem it desirable, 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 of the
Securities Exchange Act of 1934, as amended; (ii) if the Depositor shall deem it
desirable, to file with one or more national securities exchange (each, an
1
<PAGE>
"Exchange") or the National Association of Securities Dealers, Inc. ("NASD") and
execute on behalf of the Trust a listing application or applications 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 any such Exchange or the NASD's Nasdaq National Market ("NASDAQ");
(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 the Depositor, on behalf of the Trust,
may deem necessary or desirable to register the Preferred Securities under state
securities or "Blue Sky" laws; (iv) to execute on behalf of the Trust such
Underwriting Agreements with one or more underwriters relating to the offering
of the Preferred Securities as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to in clauses
(i), (ii) or (iii) above is required by the rules and regulations of the
Commission, any Exchange, NASDAQ, the NASD or state securities or Blue Sky laws,
to be executed on behalf of the Trust by a Trustee, the Depositor and any
Trustee appointed pursuant to Section 6 hereof are hereby authorized to join in
any such filing and to execute on behalf of the Trust any and all of the
foregoing.
5. This Trust Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
6. The number of Trustees initially shall be one (1) 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. Any Trustee may resign upon thirty days' prior notice to the Depositor.
7. The Depositor agrees:
(a) to pay to each Trustee from time to time such reasonable
compensation for all services rendered by such Trustee hereunder as may be
agreed by the Depositor and such Trustee from time to time (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse each
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by such Trustee in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of such Trustee's agents and counsel), except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence, bad
faith or willful misconduct; and
2
<PAGE>
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate (as defined below) of any
Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence, bad faith or misconduct with respect to such acts or omissions.
The term "Affiliate" shall have the meaning ascribed to such term in
Rule 405 promulgated under the Securities Act, in effect on the date hereof.
The provisions of this Section 7 shall survive the termination of the
Trust or the earlier termination or removal of any Trustee.
8. 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.
HOUSTON LIGHTING & POWER COMPANY,
as Depositor
By: /s/ Linda Geiger
--------------------------------
Name: Linda Geiger
Title: Designated Agent
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By: /s/ Joseph G. Ernst
----------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
3
<PAGE>
Exhibit 4.5-A
[Form Relating to Capital Securities]
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
HOUSTON LIGHTING & POWER COMPANY, as Depositor,
THE BANK OF NEW YORK,
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of January __, 1997
HL&P CAPITAL TRUST _
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I. Defined Terms.................................................... 1
SECTION 1.1. Definitions.................................................. 1
ARTICLE II. Establishment of the Trust.......................................10
SECTION 2.1. Name.........................................................10
SECTION 2.2. Office of the Delaware Trustee;
Principal Place of Business; Agents for Service of Process...10
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses......................................10
SECTION 2.4. Issuance of the Preferred Securities.........................11
SECTION 2.5. Issuance of the Common Securities;
Subscription and Purchase of Debentures......................11
SECTION 2.6. Declaration of Trust.........................................11
SECTION 2.7. Authorization to Enter into Certain Transactions.............12
SECTION 2.8. Assets of Trust..............................................17
SECTION 2.9. Title to Trust Property......................................17
ARTICLE III. Payment Account..................................................18
SECTION 3.1. Payment Account..............................................18
ARTICLE IV. Distributions; Redemption........................................18
SECTION 4.1. Distributions................................................18
SECTION 4.2. Redemption...................................................19
SECTION 4.3. Subordination of Common Securities...........................21
SECTION 4.4. Payment Procedures...........................................22
SECTION 4.5. Tax Returns and Reports......................................22
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust..................22
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.......23
ARTICLE V. Trust Securities Certificates....................................23
SECTION 5.1. Initial Ownership............................................23
SECTION 5.2. The Trust Securities Certificates............................23
SECTION 5.3. Execution and Delivery of Trust Securities Certificates......23
SECTION 5.4. Registration of Transfer and Exchange of
Preferred Securities Certificates............................24
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates................................24
SECTION 5.6. Persons Deemed Securityholders...............................25
SECTION 5.7. Access to List of Securityholders' Names and Addresses.......25
SECTION 5.8. Maintenance of Office or Agency..............................26
SECTION 5.9. Appointment of Paying Agent..................................26
SECTION 5.10. Ownership of Common Securities by Depositor..................26
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 5.11. Book-Entry Preferred Securities Certificates;
Common Securities Certificate..................................27
SECTION 5.12. Notices to Clearing Agency.....................................28
SECTION 5.13. Definitive Preferred Securities Certificates...................28
SECTION 5.14. Rights of Securityholders......................................29
SECTION 5.15. CUSIP Numbers..................................................31
ARTICLE VI. Acts of Securityholders; Meetings; Voting...........................31
SECTION 6.1. Limitations on Voting Rights...................................31
SECTION 6.2. Notice of Meetings.............................................32
SECTION 6.3. Meetings of Preferred Securityholders..........................32
SECTION 6.4. Voting Rights..................................................33
SECTION 6.5. Proxies, Etc...................................................33
SECTION 6.6. Securityholder Action by Written Consent.......................33
SECTION 6.7. Record Date for Voting and Other Purposes......................33
SECTION 6.8. Acts of Securityholders........................................34
SECTION 6.9. Inspection of Records..........................................35
ARTICLE VII. Representations and Warranties......................................35
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.......................................35
SECTION 7.2. Representations and Warranties of Depositor....................36
ARTICLE VIII. The Trustees........................................................37
SECTION 8.1. Certain Duties and Responsibilities............................37
SECTION 8.2. Certain Notices................................................39
SECTION 8.3. Certain Rights of Property Trustee.............................40
SECTION 8.4. Not Responsible for Recitals or Use of Proceeds................42
SECTION 8.5. May Hold Securities............................................42
SECTION 8.6. Compensation; Indemnity; Fees..................................42
SECTION 8.7. Corporate Property Trustee Required;
Eligibility of Trustees........................................43
SECTION 8.8. Conflicting Interests..........................................44
SECTION 8.9. Co-Trustees and Separate Trustee...............................44
SECTION 8.10. Resignation and Removal; Appointment of Successor..............45
SECTION 8.11. Acceptance of Appointment by Successor.........................47
SECTION 8.12. Merger, Conversion, Consolidation
or Succession to Business......................................47
SECTION 8.13. Preferential Collection of Claims Against
Depositor or Trust.............................................48
SECTION 8.14. Trustee May File Proofs of Claim...............................48
SECTION 8.15. Reports by Property Trustee....................................49
SECTION 8.16. Reports to the Property Trustee................................49
SECTION 8.17. Evidence of Compliance with Conditions Precedent...............49
SECTION 8.18. Number of Trustees.............................................50
SECTION 8.19. Delegation of Power............................................50
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE IX. Termination, Liquidation and Merger.................................51
SECTION 9.1. Termination Upon Expiration Date...............................51
SECTION 9.2. Early Termination..............................................51
SECTION 9.3. Termination....................................................51
SECTION 9.4. Liquidation....................................................51
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Trust......................................53
ARTICLE X. Miscellaneous Provisions............................................54
SECTION 10.1. Limitation of Rights of Securityholders........................54
SECTION 10.2. Liability of Holder of Common Securities.......................54
SECTION 10.3. Amendment......................................................54
SECTION 10.4. Separability...................................................56
SECTION 10.5. Governing Law..................................................56
SECTION 10.6. No Recourse....................................................56
SECTION 10.7. Payments Due on Non-Business Day...............................56
SECTION 10.8. Successors.....................................................56
SECTION 10.9. Headings.......................................................57
SECTION 10.10. Reports, Notices and Demands...................................57
SECTION 10.11. Agreement Not to Petition......................................57
SECTION 10.12. Trust Indenture Act; Conflict with Trust Indenture Act.........58
SECTION 10.13. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture........................................58
</TABLE>
EXHIBIT A Certificate of Trust
EXHIBIT B Certificate Depository Agreement
EXHIBIT C Common Securities Certificate
EXHIBIT D Expense Agreement
EXHIBIT E Preferred Securities Certificate
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<PAGE>
HL&P CAPITAL TRUST _
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- ----------------- ------------------
<S> <C>
((S)) 310 (a)(1)........................... 8.7
(a)(2)........................... 8.7
(a)(3)........................... 8.9
(a)(4)........................... 2.7(a)(ii)
(b).............................. 8.8
((S)) 311 (a).............................. 8.13
(b).............................. 8.13
((S)) 312 (a).............................. 5.7
(b).............................. 5.7
(c).............................. 5.7
((S)) 313 (a).............................. 8.15(a)
(a)(8)........................... 8.15(b)
(b).............................. 8.15(b)
(c).............................. 10.10
(d).............................. 8.15(c)
((S)) 314 (a).............................. 8.16
(b).............................. Not Applicable
(c)(1)........................... 8.17
(c)(2)........................... 8.17
(c)(3)........................... Not Applicable
(d).............................. Not Applicable
(e).............................. 1.1, 8.17
((S)) 315 (a).............................. 8.1(a), 8.3(a)
(b).............................. 8.2, 10.10
(c).............................. 8.1(d)
(d).............................. 8.1, 8.3
(e).............................. Not Applicable
((S)) 316 (a).............................. Not Applicable
(a)(1)(A)........................ Not Applicable
(a)(1)(B)........................ Not Applicable
(a)(2)........................... Not Applicable
(b).............................. 5.14
(c).............................. 6.7
((S)) 317 (a)(1)........................... Not Applicable
(a)(2)........................... Not Applicable
(b).............................. 5.9
((S)) 318 (a).............................. 10.12
- ----------
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
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<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of January __, 1997, among
(a) Houston Lighting & Power Company, a Texas corporation (including any
successors or assigns, the "Depositor"), (b) The Bank of New York, a New York
banking corporation, as property trustee (in each such capacity, the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), (c) The Bank of New York (Delaware), a Delaware
banking corporation, as Delaware trustee (the "Delaware Trustee"), (d)
_________________, an individual, and _________________, an individual, each of
whose address is 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899
(each an "Administrative Trustee" and collectively the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee and the Administrative
Trustees referred to collectively as the "Trustees") and (v) the several
Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and created a business trust pursuant to the Delaware Business Trust
Act by entering into that certain Trust Agreement, dated as of January 10, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on January 10, 1997, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (a) the issuance of the Common Securities by the Trust to
the Depositor, (b) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (c) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(d) the appointment of the Property Trustee and the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
Defined Terms
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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<PAGE>
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on Debentures having a principal
amount equal to such Liquidation Amount for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any
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<PAGE>
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
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.11.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
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<PAGE>
"Closing Date" means the Time of Delivery, as defined in the Underwriting
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 Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means, (a) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located at
101 Barclay Street, New York, New York 10286, and, (b) when used with respect to
the Debenture Trustee, the principal corporate trust office of the Debenture
Trustee located in New York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's ____%
Junior Subordinated Deferrable Interest Debentures, Series __, or any debentures
or other indebtedness of the Depositor issued in exchange for such ____% Junior
Subordinated Deferrable Interest Debentures, Series __, in either case as issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificates as provided in Section 5.11(a), and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ((S)) 3801, et seq., as it may be amended from time to time.
-4-
<PAGE>
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 5.14(c).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees and to the Depositor by the Holders of at
least 25% in aggregate Liquidation Amount of the Outstanding Preferred
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(e) the occurrence of a Bankruptcy Event with respect to the Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
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<PAGE>
"Expiration Date" has the meaning specified in Section 9. 1.
"Guarantee" means the Guarantee Agreement, dated as of January __, 1997,
between the Depositor, as the holder of all the Common Securities, and The Bank
of New York, a New York banking corporation, as guarantee trustee, for the
benefit of the Holders of the Trust Securities, as amended from time to time.
"Holder" has the meaning specified in the definition of the term
"Securityholder."
"Indenture" means the Junior Subordinated Indenture, dated as of January
__, 1997, between the Depositor and the Debenture Trustee, as trustee, as
amended or supplemented from time to time.
"Legal Action" has the meaning specified in Section 2.7(a)(i)(D).
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution and winding up of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a dissolution and winding up
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.17 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Trust Agreement shall include:
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<PAGE>
(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 or the Depositor, which may be an employee
of the Depositor but not an employee of the Trust or the Property Trustee, and
who shall be reasonably acceptable to the Property Trustee. Any Opinion of
Counsel pertaining to federal income tax matters may rely on published rulings
of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals
hereto.
"Outstanding," when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
(b) Trust Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Property Trustee or any Paying
Agent for the Holders of such Trust Securities; provided that, if such Trust
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of
which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that a Responsible Officer of such Trustee
actually knows to be so owned shall be so disregarded and (b) the foregoing
shall not apply at any time when all of the outstanding Preferred Securities are
owned
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<PAGE>
by the Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Preferred Securities and that the pledgee is not the Depositor or any Affiliate
of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9, and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its Global Trust
Services Office for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit E.
"Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions (including Additional Amounts, if applicable) to the Redemption
Date, plus the
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related amount of the premium, if any, paid by the Depositor upon the concurrent
redemption of a Like Amount of Debentures, allocated on a pro rata basis (based
on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" means, with respect to a Trustee, any Vice President,
any Assistant Vice President, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, or any other officer of the Corporate Trust Office of such
Trustee, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act; provided, however, that in determining whether the Holders
of the requisite amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, then for the purpose of any such
determination, so long as Definitive Preferred Securities Certificates have not
been issued, the term "Securityholders" or "Holders" as used herein shall refer
to the Owners.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (a) all exhibits hereto and (b) for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Property
Trustee under the Expense Agreement, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all proceeds and rights in respect of the foregoing,
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the terms of this Trust Agreement.
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<PAGE>
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means the Persons identified as "Trustees" in the preamble to
this Trust Agreement solely in their capacities as Trustees of the Trust formed
and continued hereunder and not in their individual capacities, or their
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Underwriting Agreement" means the Underwriting Agreement, dated January
__, 1997, among the Trust, the Depositor and the underwriters named therein.
ARTICLE II.
Establishment of the Trust
SECTION 2.1. Name.
The Trust continued hereby shall be known as "HL&P Capital Trust __," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued. The Administrative Trustees may change the name of the Trust from time
to time following written notice to the Holders.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business;
Agents for Service of Process.
The address of the Delaware Trustee in the State of Delaware is The Bank of
New York (Delaware), White Clay Center, Route 273, Newark, Delaware, 19711,
Attention: Corporate Trust Department, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. All agents
for service of process for the Trust shall be located outside the State of
Texas.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
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SECTION 2.4. Issuance of the Preferred Securities.
On January __, 1997, the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Underwriting Agreement.
On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver in accordance with Section
5.11 Preferred Securities Certificates, registered in the name of the nominee of
the initial Clearing Agency, in an aggregate amount of __________ Preferred
Securities having an aggregate Liquidation Amount of $___________, against
receipt of such aggregate purchase price of such Preferred Securities of
$___________, which amount the Administrative Trustee shall promptly deliver to
the Property Trustee.
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of ______ Common Securities having an aggregate Liquidation
Amount of $__________ against payment by the Depositor of such amount, which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee. Contemporaneously therewith, an Administrative Trustee, on behalf of
the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Trust and having an aggregate principal amount
equal to $___________, and, in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $___________ (being the sum of the amounts delivered to the
Property Trustee pursuant to (a) the second sentence of Section 2.4 and (b) the
first sentence of this Section 2.5).
SECTION 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act and for taking such actions as
are required to be taken by a Delaware trustee under the Delaware Business Trust
Act.
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SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, Article VIII and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) to acquire the Debentures with the proceeds of the sale of the Trust
Securities; provided, however, the Administrative Trustees shall cause
legal title to all of the Debentures to be vested in, and the Debentures to
be held of record in the name of, the Property Trustee for the benefit of
the Trust and the Securityholders;
(B) to give the Depositor and the Property Trustee prompt written
notice of the occurrence of any Special Event (as defined in the Indenture)
and to take any ministerial actions in connection therewith; provided, that
the Administrative Trustees shall consult with the Depositor and the
Property Trustee before taking or refraining to take any ministerial action
in relation to a Special Event;
(C) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of (S) 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges, and to issue
relevant notices to the Securityholders as to such actions and applicable
record dates;
(D) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 2.7(a)(ii)(E), the Property
Trustee has the power to bring such Legal Action;
(E) to delegate to or otherwise engage employees and agents of the Trust
(who may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(F) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
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(G) to give the certificate to the Property Trustee required by
(S) 314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Administrative Trustee;
(H) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of this Trust Agreement;
(I) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the
Securityholders or to enable the Trust to effect the purposes for which the
Trust has been created;
(J) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust;
(K) to issue and sell the Trust Securities;
(L) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and the Certificate
Depository Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of the Trust;
(M) to assist in the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or blue sky
laws, and the qualification of this Trust Agreement as a trust indenture
under the Trust Indenture Act;
(N) to assist in the listing, if any, of the Preferred Securities upon
such securities exchange or exchanges or automated quotation system or
systems as shall be determined by the Depositor and the registration of the
Preferred Securities under the Securities Exchange Act of 1934, as amended,
and the preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(O) to send notices (other than notices of default) and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(P) to appoint a Paying Agent, authenticating agent and Securities
Registrar in accordance with this Trust Agreement;
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(Q) to register transfers of the Trust Securities in accordance with
this Trust Agreement;
(R) in connection with the winding up of the affairs of and
liquidation of the Trust, to prepare, execute and file the certificate of
cancellation with the Secretary of State of the State of Delaware;
(S) to execute and deliver any closing certificates pursuant to the
Underwriting Agreement and to make application for a taxpayer
identification number for the Trust;
(T) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by the
Delaware Business Trust Act or the Trust Indenture Act, to execute on
behalf of the Trust (either acting alone or together with any or all of the
Administrative Trustees) any documents that the Administrative Trustees
have the power to execute pursuant to this Trust Agreement; and
(U) to take any action incidental to the foregoing as the Trustees
may from time to time determine is necessary or advisable to give effect to
the terms of this Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the exclusive
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) to engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities to
the extent the Debentures are redeemed or mature;
(B) upon notice of distribution issued by the Administrative Trustees
in accordance with the terms of this Trust Agreement, to engage in such
ministerial activities as shall be necessary or appropriate to effect
promptly the distribution pursuant to terms of this Trust Agreement of
Debentures to Securityholders;
(C) subject to the terms hereof, exercise all of the rights, powers
and privileges of a holder of the Debentures under the Indenture and, if a
Debenture Event of Default occurs and is continuing, shall enforce for the
benefit of, and subject to the rights of, the Securityholders, its rights
as holder of the Debentures under the Indenture;
(D) take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust
Agreement;
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(E) take any Legal Action specifically required of the Property
Trustee pursuant to the terms of this Trust Agreement which arises out of
or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Trust Agreement, the Delaware Business Trust Act
or the Trust Indenture Act;
(F) the establishment and maintenance of the Payment Account;
(G) the receipt of and holding of legal title to the Debentures as
described herein;
(H) the establishment of the Payment Account;
(I) the receipt of the Debentures;
(J) the collection of interest, principal and any other payments
made in respect of the Debentures and the holding of such amounts in the
Payment Account;
(K) the distribution through the Paying Agent of amounts owed to the
Securityholders in respect of the Trust Securities;
(L) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
(M) the sending of notices of default and other information regarding
the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(N) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(O) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the preparation and
execution of the certificate of cancellation with the Secretary of State of
the State of Delaware;
(P) after an Event of Default (other than under paragraph (b), (c),
(d) or (e) of the definition of such term if such Event of Default is by or
with respect to the Property Trustee) the taking of any action incidental
to the foregoing as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust Agreement
and protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder); and
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(P) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to be classified as an association taxable as a corporation or as other
than a grantor trust for United States federal income tax purposes, (iv) incur
any indebtedness for borrowed money or issue any other debt, (v) take or consent
to any action that would result in the placement of a Lien on any of the Trust
Property, (vi) issue any securities other than the Trust Securities, (vii) have
any power to, or agree to any action by the Depositor that would, vary the
investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of
the Trust or of the Securityholders or (viii) on or after the date hereof, enter
into any contract or agreement for or on behalf of the Trust (other than the
Certificate Depository Agreement or any other depositary agreement or any
agreement with any securities exchange or automated quotation system) that does
not expressly provide that the Holders of the Preferred Securities, in their
capacities as such, have limited liability (in accordance with the provisions of
the Delaware Business Trust Act) for the liabilities and obligations of the
Trust, which express provision may be in the following form, "The Holders of the
Preferred Securities, in their capacities as such, shall not be personally
liable for any liabilities or obligations of the Trust arising out of this
Agreement, and the parties hereto hereby agree that the Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware". The Administrative Trustees shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property adverse
to the interest of the Trust or the Securityholders in their capacity as
Securityholders. All actions taken by the Administrative Trustees will be taken
outside the State of Texas.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor or the Trust in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all respects
without any further act, vote or approval of any Person notwithstanding any
other provision of this Agreement, the Delaware Business Trust Act or other
applicable law, rule or regulation):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, the Debentures
and the Guarantee, and certain other securities which could have been
issued in lieu of the Preferred Securities, including any amendments
thereto;
(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such states;
(iii) if deemed desirable by the Depositor, the preparation for filing
by the Trust and execution on behalf of the Trust of an application to the
New York Stock Exchange or
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any other national stock exchange or the Nasdaq National Market or any
other automated quotation system for listing upon notice of issuance of any
Preferred Securities and filing with such exchange or self-regulatory
organization such notifications and documents as may be necessary from time
to time to maintain such listing;
(iv) if required, the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(v) the negotiation of the terms of, the execution and delivery of,
and the performance of its obligations under, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and any Administrative
Trustee determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Preferred Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Trust and the
Securityholders in accordance with this Trust Agreement. The right, title and
interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may thereafter be appointed as Property Trustee in accordance
with the terms hereof. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
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ARTICLE III.
Payment Account
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest (including any Additional
Interest, as defined in the Indenture) or premium or Additional Sums on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
Distributions; Redemption
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the
Trust Property, and Distributions (including any Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including any Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from ________
__, 199_, and, except in the event (and to the extent) that the Depositor
exercises its right to defer the payment of interest on the Debentures
pursuant to the Indenture, shall (assuming that payments of interest on the
Debentures are made when due) be payable semiannually in arrears on
_________ __ and _________ __ of each year, commencing on _________ __,
199_. If any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment
of such Distribution
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shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when due
(and before giving effect to Additional Amounts, if applicable),
Distributions on the Trust Securities shall be payable at a rate of _____%
per annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full Distribution period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of a
360-day year of twelve 30-day months and the number of days elapsed in a
partial month. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities at the close of business on the relevant
record date, which shall be at the close of business on the Business Day
immediately preceding such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the close of business on the [first] [fifteenth]
day of the month [of] [immediately preceding] the relevant Distribution Date
(whether or not such record date is a Business Day).
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
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(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date; and
(vi) if the Preferred Securities are no longer in book-entry-only
form, the place and address where the Holders shall surrender their
Preferred Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price, and an Administrative Trustee or the Property
Trustee will give such Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof. If the Preferred Securities
are no longer in book-entry-only form, the Property Trustee, subject to Section
4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof
upon surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price and any Distribution payable on
or prior to the Redemption Date, but without interest thereon, and such Trust
Securities will cease to be outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business 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,
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Distributions on such Trust Securities will continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities at the close of business on the relevant record date, which
shall be at the close of business on the Business Day immediately preceding the
relevant Redemption Date; provided, however, that in the event that the
Preferred Securities do not remain in book-entry-only form, the relevant record
date shall be the close of business on the date fifteen days prior to the
relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by lot or by such other method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000 or an integral multiple of $1,000 in excess
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $1,000. The Property Trustee shall promptly notify the Security
Registrar in writing of the Preferred Securities selected for redemption and, in
the case of any Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities pursuant to Section 4.2(f); provided,
however, that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price, the full
amount of such Redemption Price on all Outstanding Preferred Securities then
called for redemption, shall have been made or provided for,
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and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable Distribution Dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form and the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees
shall comply with United States federal withholding and backup withholding tax
laws and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority; provided, however, that
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under no circumstances shall the Property Trustee have any liability for such
sums, including non-receipt of any Additional Sums under the Debentures.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 5.8 of
the Indenture or Section 5.14 of this Trust Agreement.
ARTICLE V.
Trust Securities Certificates
SECTION 5.1. Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $1,000 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by manual
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board and
chief executive officer, its president, any executive vice president, any senior
vice
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president or any vice president, treasurer or assistant treasurer or controller
without further corporate action by the Depositor, in authorized denominations.
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. The
Administrative Trustee shall not be required to issue, transfer or exchange any
Preferred Securities that have been called for redemption. At the option of
a Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by an
Administrative Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction,
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loss or theft of any Trust Securities Certificate and (b) there shall be
delivered to the Securities Registrar and the Administrative Trustees such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Trust Securities Certificate shall have
been acquired by a bona fide purchaser, the Administrative Trustees, or any one
of them, on behalf of the Trust, shall execute and make available for delivery,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Securities Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an undivided beneficial interest in the assets
of the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.6. Persons Deemed Securityholders.
The Trustees and the Securities Registrar shall treat the Person in whose
name any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.7. Access to List of Securityholders' Names and Addresses.
The Administrative Trustees or the Depositor shall furnish or cause to be
furnished (a) to the Property Trustee, semiannually, not more than 15 days after
______________ __ and ______________ __ in each year, a list, in such form as
the Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of such ____________ __ and _____________ __ and (b) to the
Property Trustee, promptly after receipt by any Administrative Trustee or the
Depositor of a request therefor from the Property Trustee in order to enable the
Property Trustee, to discharge its obligations under this Trust Agreement, in
each case to the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee, shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee, the
Delaware Trustee or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
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SECTION 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attn.: Corporate Trust Trustee
Administration, as its principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the
Bank and the Securityholders of any change in the location of the Securities
Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent if such Trustees
determine in their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The
Paying Agent shall initially be the Bank, and any co-paying agent chosen by the
Bank, and acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as
Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. The Holder of the Common Securities
may not transfer the Common Securities except (a) in connection with a
consolidation or merger of the Depositor into any other Person, or any
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conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (b) to the Depositor or an Affiliate thereof in compliance with
applicable law (including the Securities Act of 1933, as amended, and applicable
state securities and blue sky laws), and in either case only upon an effective
assignment and delegation by the Holder of the Common Securities to its
transferee of all of its rights and obligations under the Expense Agreement. To
the fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the next preceding sentence shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating substantially "THIS
CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE
DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.10 OF THE TRUST
AGREEMENT AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT
OF THE EXPENSE AGREEMENT REFERRED TO THEREIN."
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.13. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and
the giving of instructions or directions to Owners of Preferred Securities
evidenced by Book-Entry Preferred Securities Certificates) as the sole
Holder of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established
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by law and agreements between such Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Preferred Securities Certificates
are issued pursuant to Section 5.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustees shall notify
the Clearing Agency and the other Trustees and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten
Preferred Securities Certificate or Certificates representing the Book-Entry
Preferred Securities Certificates by the Clearing Agency, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive
Preferred Securities Certificates as Securityholders. The Definitive Preferred
Securities Certificates shall be typewritten, printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees that meets the requirements of any stock exchange or
automated quotation system on which the
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Preferred Securities are then listed or approved for trading, as evidenced by
the execution thereof by the Administrative Trustees or any one of them.
SECTION 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property, giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and, when issued and
delivered to Securityholders against payment of the purchase price therefor,
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable as set
forth in the Indenture, the Holders of at least 25% in Liquidation Amount of the
Preferred Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Depositor and the Debenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Debentures shall become immediately due and payable, provided that
the payment of principal, premium and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee
a sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the
Debentures, and
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(C) all sums paid or advanced by the Debenture Trustee under
the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Debenture Trustee and the
Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the nonpayment of the principal of the Debentures which has become
due solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of any
amounts payable in respect of Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this
Section 5.14(c), the Holders of Preferred Securities shall have no
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right to exercise directly any right or remedy available to the holders of, or
in respect of, the Debentures.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.14, the Holders of at least a majority in aggregate Liquidation Amount
of the Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.15. CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Preferred Securities or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Preferred Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Depositor shall promptly notify to the Property Trustee in writing of any
change in CUSIP numbers.
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, on behalf
of the Trust, the Property Trustee shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or execute any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Preferred Securities, except by a
subsequent vote of the Holders of Preferred Securities. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Trustees shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that such action shall not cause the Trust to be
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classified as an association taxable as a corporation or as other than a grantor
trust for United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution and winding-up of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities. Notwithstanding any other provision of this
Trust Agreement, no amendment to this Trust Agreement may be made if, as a
result of such amendment, it would cause the Trust to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.10 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Preferred
Securityholders to vote on any matter upon the written request of the Preferred
Securityholders of record of at least 25% of the Outstanding Preferred
Securities (based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
Preferred Securityholders to vote on any matters as to which Preferred
Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securities of record present, either in person or by proxy, at
such meeting shall constitute the action of the Preferred Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
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SECTION 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $1,000 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5. Proxies, Etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
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SECTION 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents, each of which may do so pursuant to
such appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
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A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust or any person or entity.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII.
Representations and Warranties
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
(a) the Property Trustee is a New York banking corporation and is in good
standing under the laws of the State of New York;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation duly organized, validly
existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and the Delaware Trustee and constitutes the valid and
legally binding agreement of each of the Property Trustee and the Delaware
Trustee enforceable against each of them in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the
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Delaware Trustee and does not require any approval of stockholders of the
Property Trustee and the Delaware Trustee and such execution, delivery and
performance will not (i) violate the charter or by-laws of the Property Trustee
or the Delaware Trustee, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee or the
Delaware Trustee is a party or by which it is bound or (iii) violate any law,
governmental rule or regulation of the United States or the State of Delaware,
as the case may be, governing the banking or trust powers of the Property
Trustee or the Delaware Trustee (as appropriate in context) or any order,
judgment or decree applicable to the Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing federal
law governing the banking or trust powers of the Property Trustee or the
Delaware Trustee, as the case may be, under the laws of the United States or the
State of Delaware; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement,
and the Securityholders will be, as of each such date, entitled to the benefits
of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
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ARTICLE VIII.
The Trustees
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Trustees
to expend or risk its or their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder, or in the
exercise of any of its or their rights or powers, if it or they shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section
8.1. Nothing in this Trust Agreement shall be construed to release an
Administrative Trustee from liability for his or her own negligent action, his
or her own negligent failure to act, or his or her own willful misconduct. To
the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are agreed by the Depositor and
the Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees, their
officers, directors, shareholders and agents are not personally liable to it for
any amount distributable in respect of any Trust Security or for any other
liability in respect of any Trust Security. This Section 8.1(b) does not limit
the liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the
Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.11), and no
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implied covenants shall be read into this Trust Agreement against the Property
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 5.14), the Property Trustee shall exercise such of the
rights and powers vested in it by this Trust Agreement, and use the same degree
of care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
(including pursuant to Section 10.11), and the Property Trustee shall not
be liable except for the performance of such duties and obligations as
are specifically set forth in this Trust Agreement (including pursuant to
Section 10.11); and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Trust Agreement; but in the case
of any such certificates or opinions that by any provision hereof or of
the Trust Indenture Act are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of
this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
Liquidation Amount of the Trust Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment
Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own
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account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(v) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Depositor; and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.1 and except to
the extent otherwise required by law;
(vi) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor; and
(vii) Subject to Section 8.1(c), no provision of this Trust Agreement
shall require the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Property Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Trust Agreement or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) The Administrative Trustees shall not be responsible for
monitoring the compliance by the other Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall any Administrative
Trustee be liable for the default or misconduct of any other Administrative
Trustee, the other Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.10, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.10, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
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SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
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(f) the Property Trustee may consult with counsel of its selection (which
counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders, pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
provided that, nothing contained in this Section 8.3(g) shall be taken to
relieve the Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Trust
Agreement;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys; provided, that the Property Trustee shall be responsible
for its own negligence or misconduct with respect to the selection of any agent
or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (iii) shall be protected in acting in
accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
(l) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Trust Agreement; and
(m) the Property Trustee shall not be deemed to have notice of any Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Preferred Securities and this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which such Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or
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to exercise any such right, power, duty or obligation. No permissive power or
authority available to any Trustee shall be construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Use of Proceeds.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, and, except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6. Compensation; Indemnity; Fees.
(a) The Depositor agrees:
(1) to pay to the Property Trustee and the Delaware Trustee from time to
time such reasonable compensation for all services rendered by them hereunder as
may be agreed by the Depositor and such Trustees from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Property Trustee and the Delaware Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by such Trustees in
accordance with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of their agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
negligence, bad faith or willful misconduct; and
(3) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) the Property Trustee and the Delaware Trustee, (ii) any
Affiliate of any such Trustee, (iii) any officer, director, shareholder,
employee, representative or agent of any such Trustee and (iv) any employee or
agent of the Trust or its Affiliates, (referred to herein as an "Indemnified
Person") from and against any and all loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Trust Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence, bad faith or misconduct with respect to such
acts or omissions.
(b) The Trust shall:
(1) pay to the Administrative Trustees from time to time compensation for
all services rendered by them hereunder as may be agreed by the Depositor and
the Administrative Trustees from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, reimburse the
Administrative Trustees upon request for all expenses, disbursements and
advances incurred or made by such Trustees (including compensation and the
expenses and disbursements of their agents and counsel); and
(3) to the fullest extent permitted by applicable law, indemnity and hold
harmless (i) each Administrative Trustee, (ii) any Affiliate of each such
Trustee and (iii) any officer, director, shareholder, employee, representative
or agent of each such Trustee to the same extent as the Depositor has agreed
to indemnify an Indemnified Person pursuant to Section 8.6(a)(3) above.
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(c) The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the earlier termination or removal of any Trustee.
No Trustee may claim any Lien on any Trust Property as a result of any
amount due pursuant to this Section 8.6.
When any Trustee incurs expenses or renders services after an Event of
Default specified in clause (e) of the definition of Event of Default occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under the Bankruptcy Reform Act of 1978 or any
successor statute.
The Depositor and any Trustee may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
SECTION 8.7. Corporate Property Trustee Required; Eligibility of
Trustees.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and that has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State
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of Delaware and that otherwise meets the requirements of applicable Delaware law
and that shall act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
(b) The Guarantee and the Indenture shall be deemed to be specifically
described in this Trust Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (a) a natural person who is at least 21 years of age and
a resident of the United States or (b) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
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(a) The Trust Securities shall be executed by one or more of the
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such co-
trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such co-
trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigning or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders
and by appointing a successor Relevant
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Trustee. The Relevant Trustee shall appoint a successor by requesting from at
least three Persons meeting the eligibility requirements its expenses and
charges to serve as the Relevant Trustee on a form provided by the
Administrative Trustees, and selecting the Person who agrees to the lowest
expenses and charges. If the instrument of acceptance by the successor Trustee
required by Section 8.11 shall not have been delivered to the Relevant Trustee
within 60 days after the giving of such notice of resignation, the Relevant
Trustee may petition, at the expense of the Trust, any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Security holder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and, in the case of the Property Trustee, on behalf of the
Trust). An Administrative Trustee may be removed by the Common Security holder
at any time. If the instrument of acceptance by the successor Trustee required
by Section 8.11 shall not have been delivered to the Relevant Trustee within 60
days after such removal, the Relevant Trustee may petition, at the expense of
the Trust, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Security holder, by Act of the Common Security holder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders of a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11. If an
Administrative Trustee shall resign, be removed or become incapable of acting as
Administrative Trustee, at a time when a Debenture Event of Default shall have
occurred and be continuing, the Common Security holder by Act of the Common
Security holder delivered to the Administrative Trustee shall promptly appoint a
successor Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Common Security holder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Security holder who has
been a Security holder of Trust Securities for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders, in the manner provided in Section 10.10 and shall give notice
to the Depositor and to the Administrative Trustees. Each notice shall include
the name of the successor Relevant Trustee and the address of its Corporate
Trust Office if it is the Property Trustee.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Holder of the Common Securities,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of the remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for the Administrative Trustees or the Delaware Trustee,
as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all 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.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
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qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
SECTION 8.14. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Trust Securities
or the property of the Trust or of such other obligor or their creditors, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment of any
past due Distributions) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
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SECTION 8.15. Reports by Property Trustee.
(a) Not later than March 31 of each year commencing with March 31,
199_, the Property Trustee shall transmit to all Securityholders in accordance
with Section 10.10, and to the Depositor such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded, if
any, with the Commission and with the Depositor. The Depositor shall promptly
notify the Property Trustee when the Trust Securities are so listed or traded.
SECTION 8.16. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act. Delivery of such reports, information and documents to the Property Trustee
is for informational purposes only and the Property Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Depositor's
compliance with any of its covenants hereunder (as to which the Property Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION 8.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the Trust
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Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the
form of an Officers' Certificate.
SECTION 8.18. Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.18(a), or if the
number of Administrative Trustees is increased pursuant to Section 8.18(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of this Trust Agreement.
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ARTICLE IX.
Termination, Liquidation and Merger
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2051 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Property Trustee from the Holder of
the Common Securities at any time to dissolve the Trust and, after satisfaction
or the making of reasonable provision for the payment of liabilities to
creditors of the Trust, to distribute Debentures to Securityholders in exchange
for the Preferred Securities (which direction is optional and wholly within the
discretion of the Holder of the Common Securities);
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and
the Trust created and continued hereby shall terminate upon the latest to occur
of the following: (a) the distribution by the Property Trustee to
Securityholders of all amounts required to be distributed hereunder upon the
liquidation of the Trust pursuant to Section 9.4, or upon the redemption of all
of the Trust Securities pursuant to Section 4.2; (b) the payment of any expenses
owed by the Trust; and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be wound up
by the Property Trustee as expeditiously as the Property Trustee determines to
be possible by distributing, after satisfaction or the making of reasonable
provision for the payment of liabilities to creditors of the Trust as provided
by applicable
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law, to each Securityholder a Like Amount of Debentures, subject to Section
9.4(d). Notice of dissolution shall be given by the Property Trustee by first-
class mail, postage prepaid mailed not less than 30 nor more than 60 days prior
to the Liquidation Date to each Holder of Trust Securities at such Holder's
address appearing in the Securities Register. All such notices of dissolution
shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debentures, or if
Section 9.4(d) applies receive a Liquidation Distribution, as the Property
Trustee (after consultation with the Administrative Trustees) shall deem
appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
dissolution and winding-up of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
Administrative Trustees or their agent for exchange, (iii) the Depositor shall
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other stock exchange, interdealer quotation system or self-
regulatory organization as the Preferred Securities are then listed or traded,
if any, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, or if an Early
Termination Event specified in clause (c) of Section 9.2 occurs, the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound-up and
terminated, by
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the Property Trustee in such manner as the Property Trustee determines. In such
event, in connection with the winding-up of the Trust, Securityholders, will be
entitled to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution and winding-up, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution and winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities as
provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to Section 9.4 or this Section 9.5. At the request of the Holder of Common
Securities, with the consent of the Administrative Trustees and without the
consent of the Holders of the Preferred Securities, the Property Trustee or the
Delaware Trustee, the Trust may merge with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that (a) such successor entity either (i) expressly assumes all
of the obligations of the Trust with respect to the Preferred Securities or (ii)
substitutes for the Preferred Securities other securities having substantially
the same material terms as the Preferred Securities (the "Successor Securities")
so long as the Successor Securities have the same priority as the Preferred
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise; (b) a trustee of such successor entity possessing the
same powers and duties as the Property Trustee is appointed to hold the
Debentures; (c) the Successor Securities are listed or traded, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed or traded, if any; (d) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization; (e) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the material rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect; (f) such successor entity has a purpose substantially identical to that
of the Trust; (g) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Property Trustee has received an
Opinion of Counsel to the effect that (i) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the material rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, and (ii) following such merger, consolidation,
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amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor
such successor entity will be required to register as an investment company
under the 1940 Act; and (h) the Depositor or its permitted transferee owns all
of the common securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of Holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes.
ARTICLE X.
Miscellaneous Provisions
SECTION 10.1. Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim, to the fullest extent permitted by law, an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
SECTION 10.2. Liability of Holder of Common Securities.
Pursuant to Section 3803 of the Delaware Business Trust Act, the Depositor
as the Holder of Common Securities, shall be liable for the debts and
obligations of the Trust as set forth in the Expense Agreement, which is made a
part hereof.
SECTION 10.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and the Depositor, without the consent of
any Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will not be classified for United States federal income tax purposes as an
association taxable as a corporation or as other than a grantor trust at all
times that any Trust Securities are outstanding or to ensure that the Trust will
not be required to register as an investment company under the 1940 Act;
provided however, that in the case of clause
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(i) or (ii), such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.3(c) hereof, any provision of this
Trust Agreement may be amended by the Administrative Trustees and the Depositor
with (i) the consent of Trust Securityholders representing not less than a
majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust or cause the Trust to be an association taxable as a corporation
for United States federal income tax purposes or the Trust's exemption from
status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.3 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or cause the Trust to be
classified as an association taxable as a corporation or not to be a grantor
trust for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or the Administrative Trustees.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Trust Agreement is in compliance with this
Trust Agreement.
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SECTION 10.4. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES, AND THE LIABILITY OF SECURITYHOLDERS FOR OBLIGATIONS
AND LIABILITIES OF THE TRUST SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. THE PROVISIONS OF SECTIONS 3540 AND 3561 OF TITLE 12 THE DELAWARE
CODE ANNOTATED SHALL NOT APPLY TO THE TRUST.
SECTION 10.6. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions (including Additional
Amounts, if applicable) on, and the Redemption Price of, Trust Securities, as
applicable, or for any claim upon the Trust Securities or otherwise in respect
thereof, shall be had against any Securityholder or any Affiliate of a
Securityholder, solely by reason of such person being a Securityholder or an
Affiliate of a Securityholder, it being understood that the Securityholders,
solely by reason of being a Securityholder, have limited liability (in
accordance with the provisions of the Delaware Business Trust Act) for the
liabilities and obligations of the Trust. Nothing contained in this Section
10.6 shall be construed to limit the exercise or enforcement, in accordance with
the terms of this Trust Agreement, the Guarantee and the Indenture, of rights
and remedies against the Trust or the Depositor.
SECTION 10.7. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no Distributions shall
accumulate on such unpaid amount for the period after such date.
SECTION 10.8. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or any Trustee, including any
successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under
-56-
<PAGE>
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.9. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.10. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Houston Lighting &
Power Company, Houston Industries Plaza, 1111 Louisiana Street, Houston, Texas
77002, Attention: Treasurer, facsimile no.: (713) 207-3301, or to such other
address as may be specified in a written notice by the Holder of the Common
Securities or the Depositor, as the case may be, to the Property Trustee. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission. Such notice, demand or other communication
to or upon the Depositor shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Depositor.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Trustee Administration; (b) with respect to the Delaware Trustee, to White Clay
Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust
Department; (c) with respect to the Administrative Trustees, to 200 West 9th
Street Plaza, Box 2105, Wilmington, Delaware 19899, marked "Attention
Administrative Trustees of HL&P Capit al Trust__ ;" and (d) with respect to the
Trust, to its principal office specified in Section 2.2, with a copy to the
Property Trustee. Such notice, demand or other communication to or upon the
Trust or the Property Trustee shall be deemed to have been sufficiently given or
made only upon actual receipt of the writing by the Trust or the Property
Trustee.
SECTION 10.11. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
-57-
<PAGE>
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws" or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.11, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.11 shall survive the
termination of this Trust Agreement.
SECTION 10.12. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.13. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING,
-58-
<PAGE>
OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
-59-
<PAGE>
In Witness Whereof, the parties hereof have entered into this Trust
Agreement as of the date first above written.
Houston Lighting & Power Company
By:
--------------------------------
Name:
Title:
The Bank Of New York,
as Property Trustee
By:
--------------------------------
Name:
Title:
The Bank Of New York (Delaware),
as Delaware Trustee
By:
--------------------------------
Name:
Title:
--------------------------------
------------------,
as Administrative Trustee
--------------------------------
------------------,
as Administrative Trustee
-60-
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST _
THIS CERTIFICATE OF TRUST of HL&P Capital Trust ___ (the "Trust"),
dated January __, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. (S) 3801 et seq.).
------- -- ---
1. Name. The name of the business trust being formed hereby is HL&P
----
Capital Trust _.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
--------------
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By:
-------------------------------
Name:
Title:
A-1
<PAGE>
EXHIBIT B
January __, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099
Attention:________________________
General Counsel's Office
Re: HL&P Capital Trust _ ____ % Capital Securities, Series
------------------------------------------------------
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of the HL&P
Capital Trust _ ___% Capital Securities, Series ___ (the "Preferred
Securities"), of HL&P Capital Trust _, a Delaware business trust (the "Issuer"),
formed pursuant to a Trust Agreement between Houston Lighting & Power Company
(the "Corporation") and The Bank of New York, as Property Trustee, The Bank of
New York (Delaware), as Delaware Trustee, and the Administrative Trustees named
therein. The payment of distributions on the Preferred Securities, and payments
due upon liquidation of the Issuer or redemption of the Preferred Securities, to
the extent the Issuer has funds available for the payment thereof, are
guaranteed by the Corporation to the extent set forth in a Guarantee Agreement,
dated January __, 1997 by the Corporation with respect to the Preferred
Securities. The Corporation and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated January __, 1997 by and among the Underwriters, the
Issuer and the Corporation, and the Underwriters wish to take delivery of the
Preferred Securities through DTC. The Bank of New York is acting as transfer
agent and registrar with respect to the Preferred Securities (the "Transfer
Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about January __, 1997, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the
B-1
<PAGE>
name of DTC's Preferred Securities nominee, Cede & Co., representing an
aggregate of ___________ Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides
for the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on
the Preferred Securities, the Issuer or the Transfer Agent and Registrar will
notify DTC's Dividend Department of such payment 5 business days prior to
payment
B-2
<PAGE>
date. Notices to DTC's Dividend Department by telecopy shall be sent to
(212) 709-1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at
(212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Transfer Agent and Registrar
to DTC by a secure means and in a timely manner as described in paragraph 4.
Notices to DTC pursuant to this paragraph and notices of other corporate actions
(including mandatory tenders, exchanges and capital changes), shall be sent,
unless notification to another department is expressly provided for herein, by
telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094
and receipt of such notice shall be confirmed by telephoning (212) 709-6884, or
by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "HL&P Capital Trust _ ___% Capital Securities, Series __."
B-3
<PAGE>
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in next day funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be
made payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the
Transfer Agent and Registrar to use any other telecopy number or address of DTC
as the number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate number of Preferred Securities deposited with it) and discharging
its responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
B-4
<PAGE>
13. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of HL&P Capital Trust_.
Very truly yours,
HL&P CAPITAL TRUST_
(as Issuer)
By:
--------------------------------
Name:
Administrative Trustee
THE BANK OF NEW YORK
(as Transfer Agent and Registrar)
By:
--------------------------------
Name:
Title:
Received and accepted:
THE DEPOSITORY TRUST COMPANY
By:
-----------------------
Authorized Officer
B-5
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO HOUSTON LIGHTING
& POWER COMPANY OR AN AFFILIATE OF HOUSTON LIGHTING &
POWER COMPANY IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.10 OF THE TRUST AGREEMENT AND ONLY IN CONNECTION
WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE
EXPENSE AGREEMENT REFERRED TO THEREIN
Certificate Number Number of Common Securities
C-1 ------------
Certificate Evidencing Common Securities
of
HL&P Capital Trust_
____% Common Securities
(liquidation amount $1,000 per Common Security)
HL&P Capital Trust _, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Houston
Lighting & Power Company (the "Holder") is the registered owner of
____________________________________________________________ (_______) common
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the ____% Common Securities (liquidation
amount $1,000 per Common Security) (the "Common Securities"). In accordance
with Section 5.10 of the Trust Agreement (as defined below) the Common
Securities are not transferable and any attempted transfer hereof shall be void.
The designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this certificate
and the Common Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of January __, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Common Securities as set forth therein. The Trust will furnish
a copy of the Trust Agreement to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
C-1
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of January, 1997.
HL&P CAPITAL TRUST_
By:
-------------------------------
Name:
Administrative Trustee
C-2
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT, dated as of January __, 1997, between Houston Lighting &
Power Company, a Texas corporation (the "Corporation"), and HL&P Capital
Trust _, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from the Corporation and to issue and
sell its ____% Capital Securities, Series_ (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 January ___,
1997, as the same may be amended from time to time (the "Trust Agreement"); and
WHEREAS, the Corporation will directly or indirectly own all of the
Common Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Corporation, as the holder of the
Common Securities, hereby agrees shall benefit it and which purchase the
Corporation, as the holder of the Common Securities, acknowledges will be made
in reliance upon the execution and delivery of this Agreement, the Corporation,
as the holder of the Common Securities, and the Trust hereby agree as follows:
ARTICLE I.
SECTION 1.1. Agreement and Guarantee by the Corporation.
Subject to the terms and conditions hereof, the Corporation agrees to
pay to the Trust for payment to the Beneficiaries (as hereinafter defined)
amounts equal to the Obligations (as hereinafter defined). In addition, subject
to the terms and conditions hereof, the Corporation, as the holder of the Common
Securities, hereby irrevocably and unconditionally guarantees to each person or
entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
(as hereinafter defined) to such Beneficiaries. As used herein, "Obligations"
means any costs, expenses or liabilities of the Trust, other than obligations of
the Trust to pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be in
respect of principal, interest (including Additional Interest) or Additional
Amounts, on the Preferred Securities. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
D-1
<PAGE>
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement, dated as of the date hereof by the Corporation and The Bank
of New York, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.3. Waiver of Notice.
The Corporation hereby waives notice of acceptance of this Agreement
and of any Obligation to which it applies or may apply, and the Corporation
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of the Corporation
under this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
D-2
<PAGE>
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against the
Corporation and the Corporation waives any right or remedy to require that any
action be brought against the Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.6. Subrogation.
The Corporation shall be subrogated to all (if any) rights of the
Trust in respect of any amounts paid to the Beneficiaries by the Corporation
under this Agreement; provided, however, that the Corporation shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Agreement.
ARTICLE II.
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities
of any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and, if so given, shall be deemed given
when mailed or upon receipt of an answer back, if sent by telex):
HL&P Capital Trust ___
c/o Houston Industries Incorporated
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
D-3
<PAGE>
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
SECTION 2.4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THERETO.
SECTION 2.5. Limited Liability.
The Holders of the Preferred Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Trust
arising out of this Agreement, and the parties hereto hereby agree that the
Holders of the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
THIS AGREEMENT is executed as of the day and year first above
written.
HOUSTON LIGHTING & POWER COMPANY
By:
------------------------------
Name:
Title:
HL&P CAPITAL TRUST ___
By:
-------------------------------
Name:
Administrative Trustee
D-4
<PAGE>
EXHIBIT E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
HL&P Capital Trust ___ or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Certificate Number Number of Preferred Securities
Securities
P- ________
CUSIP No.: ___________
Certificate Evidencing Preferred Securities
of
HL&P Capital Trust ___
____% Capital Securities, Series ___
(liquidation amount $1,000 per Security)
HL&P Capital Trust ___, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of __________ (________)
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the HL&P Capital Trust ___ ____%
Capital Securities, Series ___ (liquidation amount $1,000 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
E-1
<PAGE>
as provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of January __, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Houston Lighting &
Power Company, a Texas corporation, and The Bank of New York, as guarantee
trustee, dated as of January __, 1997 (the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of _______________, 19___.
HL&P CAPITAL TRUST ___
By:
-------------------------------------
Name:
Administrative Trustee
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:__________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:___________________________
Signature:______________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature(s) Guaranteed:
- -------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
E-3
<PAGE>
Exhibit 4.5-B
[Form Relating to Preferred Securities]
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
HOUSTON LIGHTING & POWER COMPANY, as Depositor,
THE BANK OF NEW YORK,
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of January __, 1997
HL&P CAPITAL TRUST _
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I. Defined Terms.................................................... 1
SECTION 1.1. Definitions.................................................. 1
ARTICLE II. Establishment of the Trust.......................................10
SECTION 2.1. Name.........................................................10
SECTION 2.2. Office of the Delaware Trustee;
Principal Place of Business; Agents for Service of Process...10
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses......................................10
SECTION 2.4. Issuance of the Preferred Securities.........................11
SECTION 2.5. Issuance of the Common Securities;
Subscription and Purchase of Debentures......................11
SECTION 2.6. Declaration of Trust.........................................11
SECTION 2.7. Authorization to Enter into Certain Transactions.............12
SECTION 2.8. Assets of Trust..............................................17
SECTION 2.9. Title to Trust Property......................................17
ARTICLE III. Payment Account..................................................18
SECTION 3.1. Payment Account..............................................18
ARTICLE IV. Distributions; Redemption........................................18
SECTION 4.1. Distributions................................................18
SECTION 4.2. Redemption...................................................19
SECTION 4.3. Subordination of Common Securities...........................21
SECTION 4.4. Payment Procedures...........................................22
SECTION 4.5. Tax Returns and Reports......................................22
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust..................22
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.......23
ARTICLE V. Trust Securities Certificates....................................23
SECTION 5.1. Initial Ownership............................................23
SECTION 5.2. The Trust Securities Certificates............................23
SECTION 5.3. Execution and Delivery of Trust Securities Certificates......23
SECTION 5.4. Registration of Transfer and Exchange of
Preferred Securities Certificates............................24
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates................................24
SECTION 5.6. Persons Deemed Securityholders...............................25
SECTION 5.7. Access to List of Securityholders' Names and Addresses.......25
SECTION 5.8. Maintenance of Office or Agency..............................26
SECTION 5.9. Appointment of Paying Agent..................................26
SECTION 5.10. Ownership of Common Securities by Depositor..................26
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 5.11. Book-Entry Preferred Securities Certificates;
Common Securities Certificate..................................27
SECTION 5.12. Notices to Clearing Agency.....................................28
SECTION 5.13. Definitive Preferred Securities Certificates...................28
SECTION 5.14. Rights of Securityholders......................................29
SECTION 5.15. CUSIP Numbers..................................................31
ARTICLE VI. Acts of Securityholders; Meetings; Voting...........................31
SECTION 6.1. Limitations on Voting Rights...................................31
SECTION 6.2. Notice of Meetings.............................................32
SECTION 6.3. Meetings of Preferred Securityholders..........................32
SECTION 6.4. Voting Rights..................................................33
SECTION 6.5. Proxies, Etc...................................................33
SECTION 6.6. Securityholder Action by Written Consent.......................33
SECTION 6.7. Record Date for Voting and Other Purposes......................33
SECTION 6.8. Acts of Securityholders........................................34
SECTION 6.9. Inspection of Records..........................................35
ARTICLE VII. Representations and Warranties......................................35
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.......................................35
SECTION 7.2. Representations and Warranties of Depositor....................36
ARTICLE VIII. The Trustees........................................................37
SECTION 8.1. Certain Duties and Responsibilities............................37
SECTION 8.2. Certain Notices................................................39
SECTION 8.3. Certain Rights of Property Trustee.............................40
SECTION 8.4. Not Responsible for Recitals or Use of Proceeds................42
SECTION 8.5. May Hold Securities............................................42
SECTION 8.6. Compensation; Indemnity; Fees..................................42
SECTION 8.7. Corporate Property Trustee Required;
Eligibility of Trustees........................................43
SECTION 8.8. Conflicting Interests..........................................44
SECTION 8.9. Co-Trustees and Separate Trustee...............................44
SECTION 8.10. Resignation and Removal; Appointment of Successor..............45
SECTION 8.11. Acceptance of Appointment by Successor.........................47
SECTION 8.12. Merger, Conversion, Consolidation
or Succession to Business......................................47
SECTION 8.13. Preferential Collection of Claims Against
Depositor or Trust.............................................48
SECTION 8.14. Trustee May File Proofs of Claim...............................48
SECTION 8.15. Reports by Property Trustee....................................49
SECTION 8.16. Reports to the Property Trustee................................49
SECTION 8.17. Evidence of Compliance with Conditions Precedent...............49
SECTION 8.18. Number of Trustees.............................................50
SECTION 8.19. Delegation of Power............................................50
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE IX. Termination, Liquidation and Merger.................................51
SECTION 9.1. Termination Upon Expiration Date...............................51
SECTION 9.2. Early Termination..............................................51
SECTION 9.3. Termination....................................................51
SECTION 9.4. Liquidation....................................................51
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Trust......................................53
ARTICLE X. Miscellaneous Provisions............................................54
SECTION 10.1. Limitation of Rights of Securityholders........................54
SECTION 10.2. Liability of Holder of Common Securities.......................54
SECTION 10.3. Amendment......................................................54
SECTION 10.4. Separability...................................................56
SECTION 10.5. Governing Law..................................................56
SECTION 10.6. No Recourse....................................................56
SECTION 10.7. Payments Due on Non-Business Day...............................56
SECTION 10.8. Successors.....................................................56
SECTION 10.9. Headings.......................................................57
SECTION 10.10. Reports, Notices and Demands...................................57
SECTION 10.11. Agreement Not to Petition......................................57
SECTION 10.12. Trust Indenture Act; Conflict with Trust Indenture Act.........58
SECTION 10.13. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture........................................58
</TABLE>
EXHIBIT A Certificate of Trust
EXHIBIT B Certificate Depository Agreement
EXHIBIT C Common Securities Certificate
EXHIBIT D Expense Agreement
EXHIBIT E Preferred Securities Certificate
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<PAGE>
HL&P CAPITAL TRUST ___
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- ----------------- ------------------
<S> <C>
((S)) 310 (a)(1)........................... 8.7
(a)(2)........................... 8.7
(a)(3)........................... 8.9
(a)(4)........................... 2.7(a)(ii)
(b).............................. 8.8
((S)) 311 (a).............................. 8.13
(b).............................. 8.13
((S)) 312 (a).............................. 5.7
(b).............................. 5.7
(c).............................. 5.7
((S)) 313 (a).............................. 8.15(a)
(a)(8)........................... 8.15(b)
(b).............................. 8.15(b)
(c).............................. 10.10
(d).............................. 8.15(c)
((S)) 314 (a).............................. 8.16
(b).............................. Not Applicable
(c)(1)........................... 8.17
(c)(2)........................... 8.17
(c)(3)........................... Not Applicable
(d).............................. Not Applicable
(e).............................. 1.1, 8.17
((S)) 315 (a).............................. 8.1(a), 8.3(a)
(b).............................. 8.2, 10.10
(c).............................. 8.1(d)
(d).............................. 8.1, 8.3
(e).............................. Not Applicable
((S)) 316 (a).............................. Not Applicable
(a)(1)(A)........................ Not Applicable
(a)(1)(B)........................ Not Applicable
(a)(2)........................... Not Applicable
(b).............................. 5.14
(c).............................. 6.7
((S)) 317 (a)(1)........................... Not Applicable
(a)(2)........................... Not Applicable
(b).............................. 5.9
((S)) 318 (a).............................. 10.12
- ----------
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
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<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of January __, 1997, among
(a) Houston Lighting & Power Company, a Texas corporation (including any
successors or assigns, the "Depositor"), (b) The Bank of New York, a New York
banking corporation, as property trustee (in each such capacity, the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank"), (c) The Bank of New York (Delaware), a Delaware
banking corporation, as Delaware trustee (the "Delaware Trustee"), (d)
_________________, an individual, and _________________, an individual, each of
whose address is 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware
19899 (each an "Administrative Trustee" and collectively the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee and the Administrative
Trustees referred to collectively as the "Trustees") and (v) the several
Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and created a business trust pursuant to the Delaware Business Trust
Act by entering into that certain Trust Agreement, dated as of January 10, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on January 10, 1997, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (a) the issuance of the Common Securities by the Trust to
the Depositor, (b) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (c) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(d) the appointment of the Property Trustee and the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
Defined Terms
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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<PAGE>
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on Debentures having a principal
amount equal to such Liquidation Amount for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any
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<PAGE>
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
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.11.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
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<PAGE>
"Closing Date" means the Time of Delivery, as defined in the Underwriting
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 Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means, (a) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located at
101 Barclay Street, Floor 21 West, New York, New York 10286, and, (b) when used
with respect to the Debenture Trustee, the principal corporate trust office of
the Debenture Trustee located in New York, New York.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's ____%
Junior Subordinated Deferrable Interest Debentures, Series __, or any debentures
or other indebtedness of the Depositor issued in exchange for such ____% Junior
Subordinated Deferrable Interest Debentures, Series __, in either case as issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificates as provided in Section 5.11(a), and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ((S)) 3801, et seq., as it may be amended from time to time.
-4-
<PAGE>
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 5.14(c).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees and to the Depositor by the Holders of at
least 25% in aggregate Liquidation Amount of the Outstanding Preferred
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(e) the occurrence of a Bankruptcy Event with respect to the Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
-5-
<PAGE>
"Expiration Date" has the meaning specified in Section 9. 1.
"Guarantee" means the Guarantee Agreement, dated as of January __, 1997,
between the Depositor, as the holder of all the Common Securities, and The Bank
of New York, a New York banking corporation, as guarantee trustee, for the
benefit of the Holders of the Trust Securities, as amended from time to time.
"Holder" has the meaning specified in the definition of the term
"Securityholder."
"Indenture" means the Junior Subordinated Indenture, dated as of January
__, 1997, between the Depositor and the Debenture Trustee, as trustee, as
amended or supplemented from time to time.
"Legal Action" has the meaning specified in Section 2.7(a)(i)(D).
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution and winding up of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a disssolution and winding up
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.17 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Trust Agreement shall include:
-6-
<PAGE>
(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 or the Depositor, which may be an employee
of the Depositor but not an employee of the Trust or the Property Trustee, and
who shall be reasonably acceptable to the Property Trustee. Any Opinion of
Counsel pertaining to federal income tax matters may rely on published rulings
of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals
hereto.
"Outstanding," when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed and delivered
under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Securities Registrar or
delivered to the Securities Registrar for cancellation;
(b) Trust Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Property Trustee or any Paying
Agent for the Holders of such Trust Securities; provided that, if such Trust
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of
which other Preferred Securities have been executed and delivered pursuant to
Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that a Responsible Officer of such Trustee
actually knows to be so owned shall be so disregarded and (b) the foregoing
shall not apply at any time when all of the outstanding Preferred Securities are
owned
-7-
<PAGE>
by the Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Preferred Securities and that the pledgee is not the Depositor or any Affiliate
of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9, and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its Global Trust
Services Office for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit E.
"Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement solely in its capacity as Property Trustee
of the Trust heretofore formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions (including Additional Amounts, if applicable) to the Redemption
Date, plus the
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related amount of the premium, if any, paid by the Depositor upon the concurrent
redemption of a Like Amount of Debentures, allocated on a pro rata basis (based
on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" means, with respect to a Trustee, any Vice President,
any Assistant Vice President, any Assistant Secretary, the Treasurer, any
Assistant Treasurer or any other officer of the Corporate Trust Office of such
Trustee, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Trust Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act; provided, however, that in determining whether the Holders
of the requisite amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, then for the purpose of any such
determination, so long as Definitive Preferred Securities Certificates have not
been issued, the term "Securityholders" or "Holders" as used herein shall refer
to the Owners.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including (a) all exhibits hereto and (b) for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Property
Trustee under the Expense Agreement, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all proceeds and rights in respect of the foregoing,
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the terms of this Trust Agreement.
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"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means the Persons identified as "Trustees" in the preamble to
this Trust Agreement solely in their capacities as Trustees of the Trust formed
and continued hereunder and not in their individual capacities, or their
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Underwriting Agreement" means the Underwriting Agreement, dated January
__, 1997, among the Trust, the Depositor and the underwriters named therein.
ARTICLE II.
Establishment of the Trust
SECTION 2.1. Name.
The Trust continued hereby shall be known as "HL&P Capital Trust __," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may conduct the business of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued. The Administrative Trustees may change the name of the Trust from time
to time following written notice to the Holders.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business;
Agents for Service of Process.
The address of the Delaware Trustee in the State of Delaware is The Bank of
New York (Delaware), White Clay Center, Route 273, Newark, Delaware, 19711,
Attention: Corporate Trust Department, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is 200 West 9th Street Plaza, Box 2105, Wilmington, Delaware 19899. All agents
for service of process for the Trust shall be located outside the State of
Texas.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
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SECTION 2.4. Issuance of the Preferred Securities.
On January __, 1997, the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Underwriting Agreement.
On the Closing Date, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver in accordance with Section
5.11 Preferred Securities Certificates, registered in the name of the nominee of
the initial Clearing Agency, in an aggregate amount of __________ Preferred
Securities having an aggregate Liquidation Amount of $___________, against
receipt of such aggregate purchase price of such Preferred Securities of
$___________, which amount the Administrative Trustee shall promptly deliver to
the Property Trustee.
SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase
of Debentures.
On the Closing Date, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of ______ Common Securities having an aggregate Liquidation
Amount of $__________ against payment by the Depositor of such amount, which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee. Contemporaneously therewith, an Administrative Trustee, on behalf of
the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Trust and having an aggregate principal amount
equal to $___________, and, in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $___________ (being the sum of the amounts delivered to the
Property Trustee pursuant to (a) the second sentence of Section 2.4 and (b) the
first sentence of this Section 2.5).
SECTION 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act and for taking such actions as
are required to be taken by a Delaware trustee under the Delaware Business Trust
Act.
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SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, Article VIII and in accordance with the following
provisions (i) and (ii), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) to acquire the Debentures with the proceeds of the sale of the Trust
Securities; provided, however, the Administrative Trustees shall cause
legal title to all of the Debentures to be vested in, and the Debentures to
be held of record in the name of, the Property Trustee for the benefit of
the Trust and the Securityholders;
(B) to give the Depositor and the Property Trustee prompt written
notice of the occurrence of any Special Event (as defined in the Indenture)
and to take any ministerial actions in connection therewith; provided, that
the Administrative Trustees shall consult with the Depositor and the
Property Trustee before taking or refraining to take any ministerial action
in relation to a Special Event;
(C) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of (S) 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges, and to issue
relevant notices to the Securityholders as to such actions and applicable
record dates;
(D) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 2.7(a)(ii)(E), the Property
Trustee has the power to bring such Legal Action;
(E) to delegate to or otherwise engage employees and agents of the Trust
(who may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(F) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
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(G) to give the certificate to the Property Trustee required by
(S) 314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Administrative Trustee;
(H) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of this Trust Agreement;
(I) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the
Securityholders or to enable the Trust to effect the purposes for which the
Trust has been created;
(J) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust;
(K) to issue and sell the Trust Securities;
(L) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and the Certificate
Depository Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of the Trust;
(M) to assist in the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or blue sky
laws, and the qualification of this Trust Agreement as a trust indenture
under the Trust Indenture Act;
(N) to assist in the listing, if any, of the Preferred Securities upon
such securities exchange or exchanges or automated quotation system or
systems as shall be determined by the Depositor and the registration of the
Preferred Securities under the Securities Exchange Act of 1934, as amended,
and the preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(O) to send notices (other than notices of default) and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(P) to appoint a Paying Agent, authenticating agent and Securities
Registrar in accordance with this Trust Agreement;
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(Q) to register transfers of the Trust Securities in accordance with
this Trust Agreement;
(R) in connection with the winding up of the affairs of and
liquidation of the Trust, to prepare, execute and file, together with the
Property Trustee, the certificate of cancellation with the Secretary of
State of the State of Delaware;
(S) to execute and deliver any closing certificates pursuant to the
Underwriting Agreement and to make application for a taxpayer
identification number for the Trust;
(T) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by the
Delaware Business Trust Act or the Trust Indenture Act, to execute on
behalf of the Trust (either acting alone or together with any or all of the
Administrative Trustees) any documents that the Administrative Trustees
have the power to execute pursuant to this Trust Agreement; and
(U) to take any action incidental to the foregoing as the Trustees
may from time to time determine is necessary or advisable to give effect to
the terms of this Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the exclusive
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) to engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities to
the extent the Debentures are redeemed or mature;
(B) upon notice of distribution issued by the Administrative Trustees
in accordance with the terms of this Trust Agreement, to engage in such
ministerial activities as shall be necessary or appropriate to effect
promptly the distribution pursuant to terms of this Trust Agreement of
Debentures to Securityholders;
(C) subject to the terms hereof, exercise all of the rights, powers
and privileges of a holder of the Debentures under the Indenture and, if a
Debenture Event of Default occurs and is continuing, shall enforce for the
benefit of, and subject to the rights of, the Securityholders, its rights
as holder of the Debentures under the Indenture;
(D) take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust
Agreement;
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(E) take any Legal Action specifically required of the Property
Trustee pursuant to the terms of this Trust Agreement which arises out of
or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Trust Agreement, the Delaware Business Trust Act
or the Trust Indenture Act;
(F) the establishment and maintenance of the Payment Account;
(G) the receipt of and holding of legal title to the Debentures as
described herein;
(H) the establishment of the Payment Account;
(I) the receipt of the Debentures;
(J) the collection of interest, principal and any other payments
made in respect of the Debentures and the holding of such amounts in the
Payment Account;
(K) the distribution through the Paying Agent of amounts owed to the
Securityholders in respect of the Trust Securities;
(L) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
(M) the sending of notices of default and other information regarding
the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(N) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(O) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and, the execution of the
certificate of cancellation with the Secretary of State of the State of
Delaware;
(P) after an Event of Default (other than under paragraph (b), (c),
(d) or (e) of the definition of such term if such Event of Default is by or
with respect to the Property Trustee) the taking of any action incidental
to the foregoing as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust Agreement
and protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder); and
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(P) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to be classified as an association taxable as a corporation or as other
than a grantor trust for United States federal income tax purposes, (iv) incur
any indebtedness for borrowed money or issue any other debt, (v) take or consent
to any action that would result in the placement of a Lien on any of the Trust
Property, (vi) issue any securities other than the Trust Securities, (vii)
have any power to, or agree to any action by the Depositor that would, vary the
investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of
the Trust or of the Securityholders or (viii) on or after the date hereof, enter
into any contract or agreement for or on behalf of the Trust (other that the
Certificate Depository Agreement or any other depository agreement or any
agreement with any securities exchange or automated quotation system) that does
not expressly provide that the Holders of the Preferred Securities, in their
capacities as such, have limited liability (in accordance with the provisions of
the Delaware Business Trust Act) for the liabilities and obligations of the
Trust, which express provision may be in the following form, "The Holders of the
Preferred Securities, in their capacities as such, shall not be personally
liable for any liabilities or obligations of the Trust arising out of this
Agreement, and the parties hereto hereby agree that the Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware". The Administrative Trustees shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property adverse
to the interest of the Trust or the Securityholders in their capacity as
Securityholders. All actions taken by the Administrative Trustees will be taken
outside of the State of Texas.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor or the Trust in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all respects
without any further act, vote or approval of any Person notwithstanding any
other provision of this Agreement, the Delaware Business Trust Act or other
applicable law, rule or regulation):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, the Debentures
and the Guarantee, and certain other securities which could have been
issued in lieu of the Preferred Securities, including any amendments
thereto;
(ii) the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such states;
(iii) if deemed desirable by the Depositor, the preparation for filing
by the Trust and execution on behalf of the Trust of an application to the
New York Stock Exchange or
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any other national stock exchange or the Nasdaq National Market or any
other automated quotation system for listing upon notice of issuance of any
Preferred Securities and filing with such exchange or self-regulatory
organization such notifications and documents as may be necessary from time
to time to maintain such listing;
(iv) if required, the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;
(v) the negotiation of the terms of, the execution and delivery of,
and the performance of its obligations under, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and any Administrative
Trustee determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Preferred Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Trust and the
Securityholders in accordance with this Trust Agreement. The right, title and
interest of the Property Trustee to the Debentures shall vest automatically in
each Person who may thereafter be appointed as Property Trustee in accordance
with the terms hereof. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
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ARTICLE III.
Payment Account
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest (including any Additional
Interest, as defined in the Indenture) or premium or Additional Sums on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
Distributions; Redemption
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the
Trust Property, and Distributions (including any Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including any Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from _______
__, 199_, and, except in the event (and to the extent) that the Depositor
exercises its right to defer the payment of interest on the Debentures
pursuant to the Indenture, shall (assuming that payments of interst on the
Debentures are made when due) be payable quarterly in arrears on ________
__, ___ __, ______ __ and ________ __ of each year, commencing on ________
__, 199_. If any date on which a Distribution is otherwise payable on the
Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, payment of such Distribution
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shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
(ii) Assuming payments of interest on the Debentures are made when due
(and before giving effect to Additional Amounts, if applicable),
Distributions on the Trust Securities shall be payable at a rate of _____%
per annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full Distribution period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of a
360-day year of twelve 30-day months and the number of days elapsed in a
partial month. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities at the close of business on the relevant
record date, which shall be at the close of business on the Business Day
immediately preceding such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the close of business on the [first] [fifteenth]
day of the month [of] [immediately preceding] the relevant Distribution Date
(whether or not such record date is a Business Day).
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Trust Securities to be redeemed, at
such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
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(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date; and
(vi) if the Preferred Securities are no longer in book-entry-only
form, the place and address where the Holders shall surrender their
Preferred Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price, and an Administrative Trustee or the Property
Trustee will give such Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof. If the Preferred Securities are
no longer in book-entry-only form, the Property Trustee, subject to Section
4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof
upon surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price and any Distribution payable on
or prior to the Redemption Date, but without interest thereon, and such Trust
Securities will cease to be outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business 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,
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Distributions on such Trust Securities will continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities at the close of business on the relevant record date, which
shall be at the close of business on the Business Day immediately preceding the
relevant Redemption Date; provided, however, that in the event that the
Preferred Securities do not remain in book-entry-only form, the relevant record
date shall be the close of business on the date fifteen days prior to the
relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by lot or by such other method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and, in the case of
any Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities pursuant to Section 4.2(f); provided,
however, that if on any Distribution Date or Redemption Date any Event of
Default resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price, the full
amount of such Redemption Price on all Outstanding Preferred Securities then
called for redemption, shall have been made or provided for,
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and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from
any Debenture Event of Default, the Holder of Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated.
Until any such Event of Default under this Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the Preferred
Securities and not the Holder of the Common Securities, and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee to
act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable Distribution Dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form and the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees
shall comply with United States federal withholding and backup withholding tax
laws and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority; provided, however, that
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under no circumstances shall the Property Trustee have any liability for such
sums, including non-receipt of any Additional Sums under the Debentures.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 5.8 of
the Indenture or Section 5.14 of this Trust Agreement.
ARTICLE V.
Trust Securities Certificates
SECTION 5.1. Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board and
chief executive officer, its president, any executive vice president, any senior
vice
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president or any vice president, treasurer or assistant treasurer or controller
without further corporate action by the Depositor, in authorized denominations.
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. The
Administrative Trustee shall not be required to issue, transfer or exchange any
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by an
Administrative Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction,
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loss or theft of any Trust Securities Certificate and (b) there shall be
delivered to the Securities Registrar and the Administrative Trustees such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Trust Securities Certificate shall have
been acquired by a bona fide purchaser, the Administrative Trustees, or any one
of them, on behalf of the Trust, shall execute and make available for delivery,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Securities Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an undivided beneficial interest in the assets
of the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.6. Persons Deemed Securityholders.
The Trustees and the Securities Registrar shall treat the Person in whose
name any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.7. Access to List of Securityholders' Names and Addresses. The
Administrative Trustees or the Depositor shall furnish or cause to be furnished
(a) to the Property Trustee, semiannually, not more than 15 days after
_____________ __ and _____________ __ in each year, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of such ______________ __ and ____________ __ and (b) to the
Property Trustee, promptly after receipt by any Administrative Trustee or the
Depositor of a request therefor from the Property Trustee in order to enable the
Property Trustee, to discharge its obligations under this Trust Agreement, in
each case to the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee, shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee, the
Delaware Trustee or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
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SECTION 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attn.: Corporate Trust Trustee
Administration, as its principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the
Bank and the Securityholders of any change in the location of the Securities
Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent if such Trustees
determine in their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The
Paying Agent shall initially be the Bank, and any co-paying agent chosen by the
Bank, and acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as
Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. The Holder of the Common Securities
may not transfer the Common Securities except (a) in connection with a
consolidation or merger of the Depositor into any other Person, or any
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conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (b) to the Depositor or an Affiliate thereof in compliance with
applicable law (including the Securities Act of 1933, as amended, and applicable
state securities and blue sky laws), and in either case only upon an effective
assignment and delegation by the Holder of the Common Securities to its
transferee of all of its rights and obligations under the Expense Agreement. To
the fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the next preceding sentence shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating substantially "THIS
CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE
DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.10 OF THE TRUST
AGREEMENT AND ONLY IN CONNECTION WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT
OF THE EXPENSE AGREEMENT REFERRED TO THEREIN."
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.13. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and
the giving of instructions or directions to Owners of Preferred Securities
evidenced by Book-Entry Preferred Securities Certificates) as the sole
Holder of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established
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by law and agreements between such Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Preferred Securities Certificates
are issued pursuant to Section 5.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustees shall notify
the Clearing Agency and the other Trustees and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten
Preferred Securities Certificate or Certificates representing the Book-Entry
Preferred Securities Certificates by the Clearing Agency, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive
Preferred Securities Certificates as Securityholders. The Definitive Preferred
Securities Certificates shall be typewritten, printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees that meets the requirements of any stock exchange or
automated quotation system on which the
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Preferred Securities are then listed or approved for trading, as evidenced by
the execution thereof by the Administrative Trustees or any one of them.
SECTION 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property, giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and, when issued and
delivered to Securityholders against payment of the purchase price therefor,
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable as set
forth in the Indenture, the Holders of at least 25% in Liquidation Amount of the
Preferred Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Depositor and the Debenture Trustee;
and upon any such declaration such principal amount of and the accrued interest
on all of the Debentures shall become immediately due and payable, provided that
the payment of principal, premium and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee
a sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the
Debentures, and
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(C) all sums paid or advanced by the Debenture Trustee under
the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Debenture Trustee and the
Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the nonpayment of the principal of the Debentures which has become
due solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of any
amounts payable in respect of Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities of such
Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this
Section 5.14(c), the Holders of Preferred Securities shall have no
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right to exercise directly any right or remedy available to the holders of, or
in respect of, the Debentures.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.14, the Holders of at least a majority in aggregate Liquidation Amount
of the Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.15 CUSIP Numbers.
The Trust in issuing the Preferred Securities may use "CUSIP" numbers (if
then generally in use), and if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Preferred Securities or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Preferred Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Depositor shall promptly notify the Property Trustee in writing of any
change in CUSIP numbers.
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, on behalf
of the Trust, the Property Trustee shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or execute any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Preferred Securities, except by a
subsequent vote of the Holders of Preferred Securities. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Trustees shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that such action shall not cause the Trust to be
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classified as an association taxable as a corporation or as other than a grantor
trust for United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution and winding-up of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a majority in Liquidation Amount of the
Outstanding Preferred Securities. Notwithstanding any other provision of this
Trust Agreement, no amendment to this Trust Agreement may be made if, as a
result of such amendment, it would cause the Trust to be classified as an
association taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.10 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Preferred
Securityholders to vote on any matter upon the written request of the Preferred
Securityholders of record of at least 25% of the Outstanding Preferred
Securities (based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
Preferred Securityholders to vote on any matters as to which Preferred
Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securities of record present, either in person or by proxy, at
such meeting shall constitute the action of the Preferred Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
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SECTION 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5. Proxies, Etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
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SECTION 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents, each of which may do so pursuant to
such appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
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A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust or any person or entity.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII.
Representations and Warranties
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
(a) the Property Trustee is a New York banking corporation and is in good
standing under the laws of the State of New York;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation duly organized, validly
existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and the Delaware Trustee and constitutes the valid and
legally binding agreement of each of the Property Trustee and the Delaware
Trustee enforceable against each of them in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the
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Delaware Trustee and does not require any approval of stockholders of the
Property Trustee and the Delaware Trustee and such execution, delivery and
performance will not (i) violate the charter or by-laws of the Property Trustee
or the Delaware Trustee, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee or the
Delaware Trustee is a party or by which it is bound or (iii) violate any law,
governmental rule or regulation of the United States or the State of Delaware,
as the case may be, governing the banking or trust powers of the Property
Trustee or the Delaware Trustee (as appropriate in context) or any order,
judgment or decree applicable to the Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing federal
law governing the banking or trust powers of the Property Trustee or the
Delaware Trustee, as the case may be, under the laws of the United States or the
State of Delaware; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement,
and the Securityholders will be, as of each such date, entitled to the benefits
of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Property Trustee or the Delaware Trustee, as the
case may be, of this Trust Agreement.
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ARTICLE VIII.
The Trustees
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Trustees
to expend or risk its or their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder, or in the
exercise of any of its or their rights or powers, if it or they shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section
8.1. Nothing in this Trust Agreement shall be construed to release an
Administrative Trustee from liability for his or her own negligent action, his
or her own negligent failure to act, or his or her own willful misconduct. To
the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are agreed by the Depositor and
the Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees, their
officers, directors, shareholders and agents are not personally liable to it for
any amount distributable in respect of any Trust Security or for any other
liability in respect of any Trust Security. This Section 8.1(b) does not limit
the liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the
Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.11), and no
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implied covenants shall be read into this Trust Agreement against the Property
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 5.14), the Property Trustee shall exercise such of the
rights and powers vested in it by this Trust Agreement, and use the same degree
of care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
(including pursuant to Section 10.11), and the Property Trustee shall not
be liable except for the performance of such duties and obligations as
are specifically set forth in this Trust Agreement (including pursuant to
Section 10.11); and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Trust Agreement; but in the case
of any such certificates or opinions that by any provision hereof or of
the Trust Indenture Act are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of
this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
Liquidation Amount of the Trust Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment
Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own
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account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(v) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Depositor; and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.1 and except to
the extent otherwise required by law;
(vi) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor; and
(vii) Subject to Section 8.1(c), no provision of this Trust Agreement
shall require the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Property Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Trust Agreement or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) The Administrative Trustees shall not be responsible for
monitoring the compliance by the other Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall any Administrative
Trustee be liable for the default or misconduct of any other Administrative
Trustee, the other Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within ten Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.10, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.10, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
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SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
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(f) the Property Trustee may consult with counsel of its selection (which
counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders, pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
provided that, nothing contained in this Section 8.3(g) shall be taken to
relieve the Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Trust
Agreement;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys; provided, that the Property Trustee shall be responsible
for its own negligence or misconduct with respect to the selection of any agent
or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (iii) shall be protected in acting in
accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
(l) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Trust Agreement; and
(m) the Property Trustee shall not be deemed to have notice of any Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default
is received by the Trustee at the Corporate Trust Office of the Trustee, and
such notice references the Preferred Securities and this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which such Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or
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to exercise any such right, power, duty or obligation. No permissive power or
authority available to any Trustee shall be construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Use of Proceeds.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, and, except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6. Compensation; Indemnity; Fees.
(a) The Depositor agrees:
(1) to pay to the Property Trustee and the Delaware Trustee from time to
time such reasonable compensation for all services rendered by them hereunder as
may be agreed by the Depositor and such Trustees from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Property Trustee and the Delaware Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by such Trustees in
accordance with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of their agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
negligence, bad faith or willful misconduct; and
(3) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) the Property Trustee and the Delaware Trustee, (ii) any
Affiliate of any such Trustee, (iii) any officer, director, shareholder,
employee, representative or agent of any such Trustee and (iv) any employee or
agent of the Trust or its Affiliates, (referred to herein as an "Indemnified
Person") from and against any and all loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Trust Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence, bad faith or misconduct with respect to such
acts or omissions.
(b) The Trust shall:
(1) pay to the Administrative Trustees from time to time compensation for
all services rendered by them hereunder as may be agreed by the Depositor and
the Administrative Trustees from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, reimburse the
Administrative Trustees upon request for all expenses, disbursements and
advances incurred or made by such Trustees (including compensation and the
expenses and disbursements of their agents and counsel); and
(3) to the fullest extent permitted by applicable law, indemnity and hold
harmless (i) each Administrative Trustee, (ii) any Affiliate of each such
Trustee and (iii) any officer, director, shareholder, employee, representative
or agent of each such Trustee to the same extent as the Depositor has agreed
to indemnify an Indemnified Person pursuant to Section 8.6(a)(3) above.
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(c) The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the earlier termination or removal of any Trustee.
No Trustee may claim any Lien on any Trust Property as a result of any
amount due pursuant to this Section 8.6.
When any Trustee incurs expenses or renders services after an Event of
Default specified in clause (e) of the definition of Event of Default occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under the Bankruptcy Reform Act of 1978 or any
successor statute.
The Depositor and any Trustee may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
SECTION 8.7. Corporate Property Trustee Required; Eligibility of
Trustees.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and that has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State
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of Delaware and that otherwise meets the requirements of applicable Delaware law
and that shall act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
(b) The Guarantee and the Indenture shall be deemed to be specifically
described in this Trust Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (a) a natural person who is at least 21 years of age and
a resident of the United States or (b) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
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(a) The Trust Securities shall be executed by one or more of the
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such co-
trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such co-
trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigning or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders
and by appointing a successor Relevant
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Trustee. The Relevant Trustee shall appoint a successor by requesting from at
least three Persons meeting the eligibility requirements its expenses and
charges to serve as the Relevant Trustee on a form provided by the
Administrative Trustees, and selecting the Person who agrees to the lowest
expenses and charges. If the instrument of acceptance by the successor Trustee
required by Section 8.11 shall not have been delivered to the Relevant Trustee
within 60 days after the giving of such notice of resignation, the Relevant
Trustee may petition, at the expense of the Trust, any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and, in the case of the Property Trustee, on behalf of the
Trust). An Administrative Trustee may be removed by the Common Securityholder
at any time. If the instrument of acceptance by the successor Trustee required
by Section 8.11 shall not have been delivered to the Relevant Trustee within 60
days after such removal, the Relevant Trustee may petition, at the expense of
the Trust, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders of a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11. If an
Administrative Trustee shall resign, be removed or become incapable of acting as
Administrative Trustee, at a time when a Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder by Act of the Common
Securityholder delivered to the Administrative Trustee shall promptly appoint a
successor Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Common Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who has
been a Securityholder of Trust Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders, in the manner provided in Section 10.10 and shall give notice
to the Depositor and to the Administrative Trustees. Each notice shall include
the name of the successor Relevant Trustee and the address of its Corporate
Trust Office if it is the Property Trustee.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Holder of the Common Securities,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of the remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for the Administrative Trustees or the Delaware Trustee,
as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all 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.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
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qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
SECTION 8.14. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Trust or any other obligor upon the Trust Securities
or the property of the Trust or of such other obligor or their creditors, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment of any
past due Distributions) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
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SECTION 8.15. Reports by Property Trustee.
(a) Not later than March 31 of each year commencing with March 31,
199_, the Property Trustee shall transmit to all Securityholders in accordance
with Section 10.10, and to the Depositor, such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded, if
any, with the Commission and with the Depositor. The Depositor shall promptly
notify the Property Trustee when the Trust Securities are so listed or traded.
SECTION 8.16. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act. Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Depositor's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 8.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the Trust
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Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the
form of an Officers' Certificate.
SECTION 8.18. Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.18(a), or if the
number of Administrative Trustees is increased pursuant to Section 8.18(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of this Trust Agreement.
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ARTICLE IX.
Termination, Liquidation and Merger
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2051 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of the Common Securities;
(b) the written direction to the Property Trustee from the Holder of
the Common Securities at any time to dissolve the Trust and, after satisfaction
or the making of reasonable provision for the payment of liabilities to
creditors of the Trust, to distribute Debentures to Securityholders in exchange
for the Preferred Securities (which direction is optional and wholly within the
discretion of the Holder of the Common Securities);
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and
the Trust created and continued hereby shall terminate upon the latest to occur
of the following: (a) the distribution by the Property Trustee to
Securityholders of all amounts required to be distributed hereunder upon the
liquidation of the Trust pursuant to Section 9.4, or upon the redemption of all
of the Trust Securities pursuant to Section 4.2; (b) the payment of any expenses
owed by the Trust; and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be wound up
by the Property Trustee as expeditiously as the Property Trustee determines to
be possible by distributing, after satisfaction or the making of reasonable
provision for the payment of liabilities to creditors of the Trust as provided
by applicable
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law, to each Securityholder a Like Amount of Debentures, subject to Section
9.4(d). Notice of dissolution shall be given by the Property Trustee by first-
class mail, postage prepaid mailed not less than 30 nor more than 60 days prior
to the Liquidation Date to each Holder of Trust Securities at such Holder's
address appearing in the Securities Register. All such notices of dissolution
shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debentures, or if
Section 9.4(d) applies receive a Liquidation Distribution, as the Property
Trustee (after consultation with the Administrative Trustees) shall deem
appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
dissolution and winding-up of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
Administrative Trustees or their agent for exchange, (iii) the Depositor shall
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other stock exchange, interdealer quotation system or self-
regulatory organization as the Preferred Securities are then listed or traded,
if any, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, or if an Early
Termination Event specified in clause (c) of Section 9.2 occurs, the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound-up and
terminated, by
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the Property Trustee in such manner as the Property Trustee determines. In such
event, in connection with the winding-up of the Trust, Securityholders, will be
entitled to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution and winding-up, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution and winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities as
provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to Section 9.4 or this Section 9.5. At the request of the Holder of Common
Securities, with the consent of the Administrative Trustees and without the
consent of the Holders of the Preferred Securities, the Property Trustee or the
Delaware Trustee, the Trust may merge with or into, consolidate, amalgamate, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that (a) such successor entity either (i) expressly assumes all
of the obligations of the Trust with respect to the Preferred Securities or (ii)
substitutes for the Preferred Securities other securities having substantially
the same material terms as the Preferred Securities (the "Successor Securities")
so long as the Successor Securities have the same priority as the Preferred
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise; (b) a trustee of such successor entity possessing the
same powers and duties as the Property Trustee is appointed to hold the
Debentures; (c) the Successor Securities are listed or traded, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed or traded, if any; (d) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization; (e) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the material rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect; (f) such successor entity has a purpose substantially identical to that
of the Trust; (g) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Property Trustee has received an
Opinion of Counsel to the effect that (i) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the material rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, and (ii) following such merger, consolidation,
-53-
<PAGE>
amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor
such successor entity will be required to register as an investment company
under the 1940 Act; and (h) the Depositor or its permitted transferee owns all
of the common securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of Holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified as an association taxable as a
corporation or as other than a grantor trust for United States federal income
tax purposes.
ARTICLE X.
Miscellaneous Provisions
SECTION 10.1. Limitation of Rights of Securityholders.
The death, incapacity, liquidation, dissolution, termination or bankruptcy
of any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim, to the fullest extent permitted by law, an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
SECTION 10.2. Liability of Holder of Common Securities.
Pursuant to Section 3803 of the Delaware Business Trust Act, the Depositor
as the Holder of Common Securities, shall be liable for the debts and
obligations of the Trust as set forth in the Expense Agreement, which is made a
part hereof.
SECTION 10.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and the Depositor, without the consent of
any Securityholders, (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will not be classified for United States federal income tax purposes as an
association taxable as a corporation or as other than a grantor trust at all
times that any Trust Securities are outstanding or to ensure that the Trust will
not be required to register as an investment company under the 1940 Act;
provided however, that in the case of clause
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<PAGE>
(i) or (ii), such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.3(c) hereof, any provision of this
Trust Agreement may be amended by the Administrative Trustees and the Depositor
with (i) the consent of Trust Securityholders representing not less than a
majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust or cause the Trust to be an association taxable as a corporation
for United States federal income tax purposes or the Trust's exemption from
status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.3 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or cause the Trust to be
classified as an association taxable as a corporation or not to be a grantor
trust for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or the Administrative Trustees.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Trust Agreement is in compliance with this
Trust Agreement.
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<PAGE>
SECTION 10.4. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 10.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES, AND THE LIABILITY OF SECURITYHOLDERS FOR OBLIGATIONS
AND LIABILITIES OF THE TRUST SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. THE PROVISIONS OF SECTIONS 3540 AND 3561 OF TITLE 12 THE DELAWARE
CODE ANNOTATED SHALL NOT APPLY TO THE TRUST.
SECTION 10.6. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions (including Additional
Amounts, if applicable) on, and the Redemption Price of, Trust Securities, as
applicable, or for any claim upon the Trust Securities or otherwise in respect
thereof, shall be had against any Securityholder or any Affiliate of a
Securityholder, solely by reason of such person being a Securityholder or an
Affiliate of a Securityholder, it being understood that the Securityholders,
solely by reason of being a Securityholder, have limited liability (in
accordance with the provisions of the Delaware Business Trust Act) for the
liabilities and obligations of the Trust. Nothing contained in this Section 10.6
shall be construed to limit the exercise or enforcement, in accordance with the
terms of this Trust Agreement, the Guarantee and the Indenture, of rights and
remedies against the Trust or the Depositor.
SECTION 10.7. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no Distributions shall
accumulate on such unpaid amount for the period after such date.
SECTION 10.8. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or any Trustee, including any
successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under
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<PAGE>
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.9. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.10. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Houston Lighting &
Power Company, Houston Industries Plaza, 1111 Louisiana Street, Houston, Texas
77002, Attention: Treasurer, facsimile no.: (713) 207-3301, or to such other
address as may be specified in a written notice by the Holder of the Common
Securities or the Depositor, as the case may be, to the Property Trustee. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission. Such notice, demand or other communication
to or upon the Depositor shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Depositor.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee to 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Trustee Administration; (b) with respect to the Delaware Trustee, to White Clay
Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust
Department; (c) with respect to the Administrative Trustees, to 200 West 9th
Street Plaza, Box 2105, Wilmington, Delaware 19899, marked "Attention
Administrative Trustees of HL&P Capital Trust__ ;" and (d) with respect to the
Trust, to its principal office specified in Section 2.2, with a copy to the
Property Trustee. Such notice, demand or other communication to or upon the
Trust or the Property Trustee shall be deemed to have been sufficiently given or
made only upon actual receipt of the writing by the Trust or the Property
Trustee.
SECTION 10.11. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
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<PAGE>
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws" or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.11, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.11 shall survive the
termination of this Trust Agreement.
SECTION 10.12. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.13. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING,
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<PAGE>
OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
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<PAGE>
In Witness Whereof, the parties hereof have entered into this Trust
Agreement as of the date first above written.
Houston Lighting & Power Company
By:
--------------------------------
Name:
Title:
The Bank Of New York,
as Property Trustee
By:
--------------------------------
Name:
Title:
The Bank Of New York (Delaware),
as Delaware Trustee
By:
--------------------------------
Name:
Title:
--------------------------------
------------------,
as Administrative Trustee
--------------------------------
------------------,
as Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST
OF
HL&P CAPITAL TRUST _
THIS CERTIFICATE OF TRUST of HL&P Capital Trust ___ (the "Trust"),
dated January __, 1997, is being duly executed and filed by the undersigned as
trustee, to form a business trust under the Delaware Business Trust Act
(12 Del. C. (S) 3801 et seq.).
------- -- ---
1. Name. The name of the business trust being formed hereby is HL&P
----
Capital Trust _.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711.
3. Effective Date. This Certificate of Trust shall be effective at
--------------
the time of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust at the time of filing this Certificate of Trust, has executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By:
-------------------------------
Name:
Title:
A-1
<PAGE>
EXHIBIT B
January __, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099
Attention:________________________
General Counsel's Office
Re: HL&P Capital Trust __ __ % Trust Preferred Securities, Series
-------------------------------------------------------------
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of the HL&P
Capital Trust __ __% Trust Preferred Securities, Series __ (the "Preferred
Securities"), of HL&P Capital Trust __, a Delaware business trust (the
"Issuer"), formed pursuant to a Trust Agreement between Houston Lighting & Power
Company (the "Corporation") and The Bank of New York, as Property Trustee, The
Bank of New York (Delaware), as Delaware Trustee, and the Administrative
Trustees named therein. The payment of distributions on the Preferred
Securities, and payments due upon liquidation of the Issuer or redemption of the
Preferred Securities, to the extent the Issuer has funds available for the
payment thereof, are guaranteed by the Corporation to the extent set forth in a
Guarantee Agreement, dated January __, 1997 by the Corporation with respect to
the Preferred Securities. The Corporation and the Issuer propose to sell the
Preferred Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated January __, 1997 by and among the Underwriters, the
Issuer and the Corporation, and the Underwriters wish to take delivery of the
Preferred Securities through DTC. The Bank of New York is acting as transfer
agent and registrar with respect to the Preferred Securities (the "Transfer
Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about January __, 1997, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the
B-1
<PAGE>
name of DTC's Preferred Securities nominee, Cede & Co., representing an
aggregate of ___________ Preferred Securities and bearing the following legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides
for the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on
the Preferred Securities, the Issuer or the Transfer Agent and Registrar will
notify DTC's Dividend Department of such payment 5 business days prior to
payment
B-2
<PAGE>
date. Notices to DTC's Dividend Department by telecopy shall be sent to
(212) 709-1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at
(212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Transfer Agent and Registrar
to DTC by a secure means and in a timely manner as described in paragraph 4.
Notices to DTC pursuant to this paragraph and notices of other corporate actions
(including mandatory tenders, exchanges and capital changes), shall be sent,
unless notification to another department is expressly provided for herein, by
telecopy to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094
and receipt of such notice shall be confirmed by telephoning (212) 709-6884, or
by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "HL&P Capital Trust __ __% Trust Preferred Securities, Series __."
B-3
<PAGE>
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in next day funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be
made payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the
Transfer Agent and Registrar to use any other telecopy number or address of DTC
as the number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate number of Preferred Securities deposited with it) and discharging
its responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
B-4
<PAGE>
13. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of HL&P Capital Trust_.
Very truly yours,
HL&P CAPITAL TRUST_
(as Issuer)
By:
--------------------------------
Name:
Administrative Trustee
THE BANK OF NEW YORK
(as Transfer Agent and Registrar)
By:
--------------------------------
Name:
Title:
Received and accepted:
THE DEPOSITORY TRUST COMPANY
By:
-----------------------
Authorized Officer
B-5
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO HOUSTON LIGHTING
& POWER COMPANY OR AN AFFILIATE OF HOUSTON LIGHTING &
POWER COMPANY IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.10 OF THE TRUST AGREEMENT AND ONLY IN CONNECTION
WITH A SIMULTANEOUS DELEGATION AND ASSIGNMENT OF THE
EXPENSE AGREEMENT REFERRED TO THEREIN
Certificate Number Number of Common Securities
C-1 ------------
Certificate Evidencing Common Securities
of
HL&P Capital Trust_
____% Common Securities
(liquidation amount $25 per Common Security)
HL&P Capital Trust __, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Houston
Lighting & Power Company (the "Holder") is the registered owner of
____________________________________________________________ (_______) common
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the ____% 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 January __, 1997, as the same may be amended from time
to time (the "Trust Agreement"), including the designation of the terms of the
Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
C-1
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of January, 1997.
HL&P CAPITAL TRUST_
By:
-------------------------------
Name:
Administrative Trustee
C-2
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT, dated as of January __, 1997, between Houston Lighting &
Power Company, a Texas corporation (the "Corporation"), and HL&P Capital
Trust ___ , a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from the Corporation and to issue and
sell its ____% Trust Preferred Securities, Series_ (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
January ___, 1997, as the same may be amended from time to time (the "Trust
Agreement"); and
WHEREAS, the Corporation will directly or indirectly own all of the
Common Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Corporation, as the holder of the
Common Securities, hereby agrees shall benefit it and which purchase the
Corporation, as the holder of the Common Securities, acknowledges will be made
in reliance upon the execution and delivery of this Agreement, the Corporation,
as the holder of the Common Securities, and the Trust hereby agree as follows:
ARTICLE I.
SECTION 1.1. Agreement and Guarantee by the Corporation.
Subject to the terms and conditions hereof, the Corporation agrees to
pay to the Trust for payment to the Beneficiaries (as hereinafter defined)
amounts equal to the Obligations (as hereinafter defined). In addition, subject
to the terms and conditions hereof, the Corporation, as the holder of the Common
Securities, hereby irrevocably and unconditionally guarantees to each person or
entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
(as hereinafter defined) to such Beneficiaries. As used herein, "Obligations"
means any costs, expenses or liabilities of the Trust, other than obligations of
the Trust to pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be in
respect of principal, interest (including Additional Interest) or Additional
Amounts, on the Preferred Securities. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
D-1
<PAGE>
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement, dated as of the date hereof by the Corporation and The Bank
of New York, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.3. Waiver of Notice.
The Corporation hereby waives notice of acceptance of this Agreement
and of any Obligation to which it applies or may apply, and the Corporation
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of the Corporation
under this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
D-2
<PAGE>
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against the
Corporation and the Corporation waives any right or remedy to require that any
action be brought against the Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.6. Subrogation.
The Corporation shall be subrogated to all (if any) rights of the
Trust in respect of any amounts paid to the Beneficiaries by the Corporation
under this Agreement; provided, however, that the Corporation shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Agreement.
ARTICLE II.
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities
of any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and, if so given, shall be deemed given
when mailed or upon receipt of an answer back, if sent by telex):
HL&P Capital Trust ___
c/o Houston Industries Incorporated
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
D-3
<PAGE>
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
SECTION 2.4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THERETO.
SECTION 2.5. Limited Liability.
The Holders of the Preferred Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Trust
arising out of this Agreement, and the parties hereto hereby agree that the
Holders of the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
THIS AGREEMENT is executed as of the day and year first above
written.
HOUSTON LIGHTING & POWER COMPANY
By:
------------------------------
Name:
Title:
HL&P CAPITAL TRUST ___
By:
-------------------------------
Name:
Administrative Trustee
D-4
<PAGE>
EXHIBIT E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
HL&P Capital Trust ___ or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Certificate Number Number of Preferred Securities
Securities
P- ________
CUSIP No.: ___________
Certificate Evidencing Preferred Securities
of
HL&P Capital Trust ___
____% Trust Preferred Securities, Series ___
(liquidation amount $25 per Security)
HL&P Capital Trust ___, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_______________ (the "Holder") is the registered owner of __________ (________)
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the HL&P Capital Trust ___ ____%
Trust Preferred Securities, Series ___ (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
E-1
<PAGE>
as provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of January __, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Guarantee Agreement entered into by Houston Lighting &
Power Company, a Texas corporation, and The Bank of New York, as guarantee
trustee, dated as of January __, 1997 (the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of _______________, 19___.
HL&P CAPITAL TRUST ___
By:
-------------------------------------
Name:
Administrative Trustee
E-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:__________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:___________________________
Signature:______________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature(s) Guaranteed:
- -------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
E-3
<PAGE>
Exhibit 4.8-A
[FORM RELATING TO CAPITAL SECURITIES]
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
Between
HOUSTON LIGHTING & POWER COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
January __, 1997
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE/*/
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
- ------------------- -------------------
<S> <C>
310(a).................................................. 4.1(a)
310(b).................................................. 4.l(c), 2.8
310(c).................................................. Inapplicable
311(a).................................................. 2.2(b)
311(b).................................................. 2.2(b)
31l(c).................................................. Inapplicable
312(a).................................................. 2.2(a)
312(b).................................................. 2.2(b)
313..................................................... 2.3
314(a).................................................. 2.4
314(b).................................................. Inapplicable
314(c).................................................. 2.5
314(d).................................................. Inapplicable
314(e).................................................. 1.1, 2.5, 3.2
314(f).................................................. 2.1, 3.2
315(a).................................................. 3.1(d)
315(b).................................................. 2.7
315(c).................................................. 3.1
315(d).................................................. 3.1(d)
316(a).................................................. 1.1, 2.6, 5.4
316(b).................................................. 5.3
316(c).................................................. 8.2
317(a).................................................. Inapplicable
317(b).................................................. Inapplicable
318(a).................................................. 2.1 (b)
318(b).................................................. 2.1
318(c).................................................. 2.1 (a)
</TABLE>
- -----------------------------
/*/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its
terms or provisions.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS...................................................... 1
SECTION 1.1. Definitions............................................... 1
ARTICLE II. TRUST INDENTURE ACT............................................. 4
SECTION 2.1. Trust Indenture Act; Application.......................... 4
SECTION 2.2. List of Holders........................................... 4
SECTION 2.3. Reports by the Guarantee Trustee.......................... 4
SECTION 2.4. Periodic Reports to the Guarantee Trustee................. 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent.......... 5
SECTION 2.6. Events of Default; Waiver................................. 5
SECTION 2.7. Event of Default; Notice.................................. 5
SECTION 2.8. Conflicting Interests..................................... 5
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE............. 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee................ 6
SECTION 3.2. Certain Rights of Guarantee Trustee....................... 7
SECTION 3.3. Indemnity................................................. 9
SECTION 3.4. Compensation and Reimbursement............................ 9
ARTICLE IV. GUARANTEE TRUSTEE............................................... 9
SECTION 4.1. Guarantee Trustee; Eligibility............................ 9
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee.........................................10
ARTICLE V. GUARANTEE........................................................10
SECTION 5.1. Guarantee.................................................10
SECTION 5.2. Waiver of Notice and Demand...............................11
SECTION 5.3. Obligations Not Affected..................................11
SECTION 5.4. Rights of Holders.........................................12
SECTION 5.5. Guarantee of Payment......................................12
SECTION 5.6. Subrogation...............................................12
SECTION 5.7. Independent Obligations...................................12
ARTICLE VI. COVENANTS AND SUBORDINATION.....................................13
SECTION 6.1. Subordination.............................................13
SECTION 6.2. Pari Passu Guarantees.....................................13
ARTICLE VII. TERMINATION....................................................13
SECTION 7.1. Termination...............................................13
ARTICLE VIII. MISCELLANEOUS.................................................13
</TABLE>
ii
<PAGE>
SECTION 8.1. Successors and Assigns....................................13
SECTION 8.2. Amendments................................................14
SECTION 8.3. Notices...................................................14
SECTION 8.4. Benefit...................................................15
SECTION 8.5. Interpretation............................................15
SECTION 8.6. Governing Law.............................................16
SECTION 8.7. Limited Liability.........................................16
iii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of January __, 1997, is executed
and delivered by HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Guarantor") having its principal office at Houston Industries Plaza, 1111
Louisiana Street, Houston, Texas 77002, and The Bank of New York, a
New York banking corporation as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Capital
Securities and the Common Securities (each as defined herein and, together, the
"Securities") of HL&P CAPITAL TRUST __, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January __, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $___,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its ____% Capital
Securities, Series __, Liquidation Amount $1,000 per capital security (the
"Capital Securities"), and its $__________ aggregate Liquidation Amount (as
defined in the Trust Agreement) of its Common Securities, Series __, Liquidation
Amount $1,000 per common security (the "Common Securities"), each representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Issuer will use the proceeds of the issuance of the
Securities to purchase the Debentures (as defined in the Trust Agreement) of the
Guarantor, which will be deposited with The Bank of New York, a New York banking
corporation, as Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but
<PAGE>
not otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debentures" has the meaning specified in the Trust Agreement.
"Event of Default" means a default by the Guarantor on any of its
payments or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Securities, to
the extent the Issuer shall have funds on hand available therefor at such time,
(ii) the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price"), with respect to any Securities
called for redemption by the Issuer, to the extent the Issuer shall have funds
on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Issuer, unless
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the Liquidation Amount of $1,000 per Security plus accrued and unpaid
Distributions on the Securities to the date of payment and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to creditors of the
Issuer as required by applicable law (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means The Bank of New York, a New York banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Securities Registrar, of any Securities; provided, however, that in
determining whether the holders of the requisite percentage of Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.
-2-
<PAGE>
"Indenture" means the Junior Subordinated Indenture, dated as of
January __, 1997, as supplemented and amended, between the Guarantor and
The Bank of New York, a New York banking corporation as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of such
Person, and delivered to the Guarantee Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 2.5 shall be the principal
executive, financial or accounting officer of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or any
other officer of the [Corporate Trust Services Office] of the Guarantee Trustee
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
-3-
<PAGE>
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee: (i) semiannually, not more than 15 days after _______ __ and
_______ __ in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of such
_______ __ and _______ __, and (ii) at such other times as the Guarantee Trustee
may request in writing, within 30 days after the receipt by the Guarantor of any
such request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished, excluding from any such list
names and addresses received by the Guarantee Trustee in its capacity as
Securities Registrar.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than March 31 of each year, commencing March 31, 199_, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section
-4-
<PAGE>
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Securities may,
by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. 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 actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been cured before
the giving of such notice, provided, that, except in the case of a default in
the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such notice if and so long as a committee of Responsible Officers of
the Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice of
such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
-5-
<PAGE>
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any
-6-
<PAGE>
provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform on their face to the requirements of
this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in Liquidation Amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting to take any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely
-7-
<PAGE>
upon an Officers' Certificate which, upon receipt of such request from
the Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the advice or opinion of such legal counsel of its selection with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or opinion. Such legal counsel may be legal counsel to the Guarantor
or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions
from the Holders, (B) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(C) shall be fully protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or
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<PAGE>
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power and authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any and all loss, damage, claims, liability or
expense, including taxes (other than taxes based on the income of the Guarantee
Trustee), incurred without negligence or bad faith on the part of the Guarantee
Trustee arising out of or in connection with the acceptance or administration of
this Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement. This indemnity shall survive the
termination of this Guarantee Agreement.
SECTION 3.4 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees (i) to pay to the Guarantee Trustee from time to
time such compensation as the Guarantor and the Guarantee Trustee shall from
time to time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and (ii) except as otherwise
expressly provided herein, to reimburse the Guarantee Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Guarantee Trustee in accordance with any provision of this Guarantee Agreement
(including the compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith. This Section 3.4 shall survive the
termination of this Guarantee Agreement for a period of one year following the
termination of this Guarantee Agreement or any reinstatement thereof pursuant to
Section 7.1.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(a) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority, then,
for the purposes of this Section and to the extent permitted by the
Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
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<PAGE>
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed by the Guarantor (i) without cause at any time when an Event of
Default has not occurred and is continuing and (ii) at any time when the
Guarantee Trustee ceases to be eligible to act as the Guarantee Trustee pursuant
to Section 4.1 hereof or becomes incapable of acting or is adjudged a bankrupt
or insolvent or a receiver of the Guarantee Trustee or of its property is
appointed or any public officer takes charge or control of the Guarantee Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of setoff or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
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<PAGE>
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
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<PAGE>
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of not less than
a Majority in Liquidation Amount of the Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of Debentures to the Holders as
provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
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<PAGE>
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article XIII of the Indenture
will apply, mutatis mutandis, to the obligations of the Guarantor hereunder.
The obligations of the Guarantor hereunder do not constitute Senior Debt (as
defined in the Indenture) of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any HL&P Trust (as defined in the
Indenture).
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Securities, (ii)
the distribution of Debentures to the Holders in exchange for all of the
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Securities or this Guarantee Agreement. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by the Issuer or upon distribution of Debentures to the
Holders as provided in the Trust Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article VIII of the Indenture
and pursuant to which the successor or assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
13
<PAGE>
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may be amended only with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
HL&P Capital Trust ___
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
14
<PAGE>
with a copy to:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(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
15
<PAGE>
(g) the masculine, feminine or neuter gender used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 8.7 Limited Liability.
The Holders of the Capital Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Issuer
arising out of this Agreement, and the parties hereto hereby agree that the
Holders of the Capital Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
HOUSTON LIGHTING & POWER COMPANY
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
The Bank of New York,
as Guarantee Trustee
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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Exhibit 4.8-B
[Form Relating to Preferred Securities]
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
Between
HOUSTON LIGHTING & POWER COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
January __, 1997
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE/*/
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
- ------------------- -------------------
<S> <C>
310(a).................................................. 4.1(a)
310(b).................................................. 4.l(c), 2.8
310(c).................................................. Inapplicable
311(a).................................................. 2.2(b)
311(b).................................................. 2.2(b)
31l(c).................................................. Inapplicable
312(a).................................................. 2.2(a)
312(b).................................................. 2.2(b)
313..................................................... 2.3
314(a).................................................. 2.4
314(b).................................................. Inapplicable
314(c).................................................. 2.5
314(d).................................................. Inapplicable
314(e).................................................. 1.1, 2.5, 3.2
314(f).................................................. 2.1, 3.2
315(a).................................................. 3.1(d)
315(b).................................................. 2.7
315(c).................................................. 3.1
315(d).................................................. 3.1(d)
316(a).................................................. 1.1, 2.6, 5.4
316(b).................................................. 5.3
316(c).................................................. 8.2
317(a).................................................. Inapplicable
317(b).................................................. Inapplicable
318(a).................................................. 2.1 (b)
318(b).................................................. 2.1
318(c).................................................. 2.1 (a)
</TABLE>
- -----------------------------
/*/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its
terms or provisions.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS...................................................... 1
SECTION 1.1. Definitions............................................... 1
ARTICLE II. TRUST INDENTURE ACT............................................. 4
SECTION 2.1. Trust Indenture Act; Application.......................... 4
SECTION 2.2. List of Holders........................................... 4
SECTION 2.3. Reports by the Guarantee Trustee.......................... 4
SECTION 2.4. Periodic Reports to the Guarantee Trustee................. 4
SECTION 2.5. Evidence of Compliance with Conditions Precedent.......... 5
SECTION 2.6. Events of Default; Waiver................................. 5
SECTION 2.7. Event of Default; Notice.................................. 5
SECTION 2.8. Conflicting Interests..................................... 5
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE............. 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee................ 6
SECTION 3.2. Certain Rights of Guarantee Trustee....................... 7
SECTION 3.3. Indemnity................................................. 9
SECTION 3.4. Compensation and Reimbursement............................ 9
ARTICLE IV. GUARANTEE TRUSTEE............................................... 9
SECTION 4.1. Guarantee Trustee; Eligibility............................ 9
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee.........................................10
ARTICLE V. GUARANTEE........................................................10
SECTION 5.1. Guarantee.................................................10
SECTION 5.2. Waiver of Notice and Demand...............................11
SECTION 5.3. Obligations Not Affected..................................11
SECTION 5.4. Rights of Holders.........................................12
SECTION 5.5. Guarantee of Payment......................................12
SECTION 5.6. Subrogation...............................................12
SECTION 5.7. Independent Obligations...................................12
ARTICLE VI. COVENANTS AND SUBORDINATION.....................................13
SECTION 6.1. Subordination.............................................13
SECTION 6.2. Pari Passu Guarantees.....................................13
ARTICLE VII. TERMINATION....................................................13
SECTION 7.1. Termination...............................................13
ARTICLE VIII. MISCELLANEOUS.................................................13
</TABLE>
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<PAGE>
SECTION 8.1. Successors and Assigns....................................13
SECTION 8.2. Amendments................................................14
SECTION 8.3. Notices...................................................14
SECTION 8.4. Benefit...................................................15
SECTION 8.5. Interpretation............................................15
SECTION 8.6. Governing Law.............................................16
SECTION 8.7. Limited Liability.........................................16
iii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of January __, 1997, is executed
and delivered by HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Guarantor"), having its principal office at Houston Industries Plaza, 1111
Louisiana Street, Houston, Texas 77002, and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Preferred Securities
and the Common Securities (each as defined herein and, together, the
"Securities") of HL&P CAPITAL TRUST __, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January __, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing $___,000,000 aggregate
Liquidation Amount (as defined in the Trust Agreement) of its ____% Trust
Preferred Securities, Series __, Liquidation Amount $25 per preferred security
(the "Preferred Securities"), and its $__________ aggregate Liquidation Amount
(as defined in the Trust Agreement) of its Common Securities, Series __,
Liquidation Amount $25 per common security (the "Common Securities"), each
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in the Trust Agreement;
WHEREAS, the Issuer will use the proceeds of the issuance of the
Securities to purchase the Debentures (as defined in the Trust Agreement) of the
Guarantor, which will be deposited with The Bank of New York, a New York banking
corporation, as Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but
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not otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debentures" has the meaning specified in the Trust Agreement.
"Event of Default" means a default by the Guarantor on any of its
payments or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Securities, to
the extent the Issuer shall have funds on hand available therefor at such time,
(ii) the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price"), with respect to any Securities
called for redemption by the Issuer, to the extent the Issuer shall have funds
on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Issuer, unless
Debentures are distributed to the Holders, the lesser of (a) the aggregate of
the Liquidation Amount of $25 per Security plus accrued and unpaid Distributions
on the Securities to the date of payment and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer after satisfaction of liabilities to creditors of the Issuer as required
by applicable law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, a New York banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement, and
thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Securities Registrar, of any Securities; provided, however, that in
determining whether the holders of the requisite percentage of Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.
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"Indenture" means the Junior Subordinated Indenture, dated as of
January __, 1997, as supplemented and amended, between the Guarantor and
The Bank of New York, a New York banking corporation, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of such
Person, and delivered to the Guarantee Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 2.5 shall be the principal
executive, financial or accounting officer of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or any
other officer of the [Corporate Trust Services Office] of the Guarantee Trustee
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
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"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee: (i) semiannually, not more than 15 days after _______ __ and
_______ __ in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of such ____ __
and _______ __, and (ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished, excluding from any such list
names and addresses received by the Guarantee Trustee in its capacity as
Securities Registrar.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than March 31 of each year, commencing March 31, 199_, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section
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314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Securities may,
by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. 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 actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been cured before
the giving of such notice, provided, that, except in the case of a default in
the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such notice if and so long as a committee of Responsible Officers of
the Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice of
such Event of Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any
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provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform on their face to the requirements of
this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in Liquidation Amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting to take any action hereunder, the Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely
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upon an Officers' Certificate which, upon receipt of such request from
the Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the advice or opinion of such legal counsel of its selection with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or opinion. Such legal counsel may be legal counsel to the Guarantor
or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions
from the Holders, (B) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(C) shall be fully protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or
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obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power and authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any and all loss, damage, claims, liability or
expense, including taxes (other than taxes based on the income of the Guarantee
Trustee), incurred without negligence or bad faith on the part of the Guarantee
Trustee arising out of or in connection with the acceptance or administration of
this Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement. This indemnity shall survive the
termination of this Guarantee Agreement.
SECTION 3.4. Compensation and Reimbursement.
The Guarantor agrees (i) to pay to the Guarantee Trustee from time to
time such compensation as the Guarantor and the Guarantee Trustee shall from
time to time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and (ii) except as otherwise
expressly provided herein, to reimburse the Guarantee Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Guarantee Trustee in accordance with any provision of this Guarantee Agreement
(including the compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith. This Section 3.4 shall survive the
termination of this Guarantee Agreement for a period of one year following the
termination of this Guarantee Agreement or any reinstatement thereof pursuant to
Section 7.1.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of
Section 310(a) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority, then,
for the purposes of this Section and to the extent permitted by the
Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
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SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed by the Guarantor (i) without cause at any time when an Event of
Default has not occurred and is continuing and (ii) at any time when the
Guarantee Trustee ceases to be eligible to act as the Guarantee Trustee pursuant
to Section 4.1 hereof or becomes incapable of acting or is adjudged a bankrupt
or insolvent or a receiver of the Guarantee Trustee or of its property is
appointed or any public officer takes charge or control of the Guarantee Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of setoff or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
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SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Securities, or any action
on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
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There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of not less than
a Majority in Liquidation Amount of the Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to the Holders as provided in
the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
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ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt (as defined in the Indenture) of
the Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article XIII of the Indenture
will apply, mutatis mutandis, to the obligations of the Guarantor hereunder. The
obligations of the Guarantor hereunder do not constitute Senior Debt (as defined
in the Indenture) of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any HL&P Trust (as defined in the
Indenture).
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Securities, (ii)
the distribution of Debentures to the Holders in exchange for all of the
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Securities or this Guarantee Agreement. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by the Issuer or upon distribution of Debentures to the
Holders as provided inthe Trust Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article VIII of the Indenture
and pursuant to which the successor or assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
13
<PAGE>
SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may be amended only with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Facsimile No.: (713) 207-3301
Attention: Treasurer
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
HL&P Capital Trust ____
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
14
<PAGE>
with a copy to:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(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
15
<PAGE>
(g) the masculine, feminine or neuter gender used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 8.7. Limited Liability.
The Holders of the Preferred Securities, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the Issuer
arising out of this Agreement, and the parties hereto hereby agree that the
Holders of the Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
HOUSTON LIGHTING & POWER COMPANY
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
THE BANK OF NEW YORK,
as Guarantee Trustee
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
-16-
<PAGE>
[Letterhead of Baker & Botts, L.L.P. appears here]
Exhibit 5.1
January 21, 1997
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3 (the
"Registration Statement"), filed by HL&P Capital Trust I, HL&P Capital Trust II,
HL&P Capital Trust III and HL&P Capital Trust IV, each a statutory business
trust formed under the laws of the State of Delaware (each, an "Issuer" and,
collectively, the "Issuers"), and Houston Lighting & Power Company, a Texas
corporation (the "Company"), with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the proposed issuance and sale from time to time of up to
$350,000,000 in aggregate principal amount of (i) the Company's Junior
Subordinated Deferrable Interest Debentures (the "Debentures"), each series of
which will be issued pursuant to a Junior Subordinated Indenture (the
"Indenture") to be entered into between the Company and The Bank of New York, as
Trustee, as such Indenture will be supplemented, in connection with the issuance
of each such series, by a supplemental indenture creating such series (each, a
"Supplemental Indenture" and, collectively, the "Supplemental Indentures"), (ii)
$350,000,000 aggregate liquidation amount of preferred securities (the
"Preferred Securities") or capital securities (the "Capital Securities") of the
Issuers and (iii) the Company's guarantees with respect to the Preferred
Securities and the Capital Securities (each, a "Guarantee" and, collectively,
the "Guarantees"), each of which Guarantees will be issued pursuant to a
guarantee agreement between the Company and The Bank of New York as Trustee
thereunder (each, a "Guarantee Agreement" and, collectively, the "Guarantee
Agreements"). Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to them in the Registration Statement.
In our capacity as your counsel in the connection referred to above,
we have examined the Restated Articles of Incorporation and Amended and Restated
Bylaws of the Company, as amended to date, forms (filed as exhibits to the
Registration Statement) of each of the Indenture, the Supplemental Indentures
and the Guarantees and have examined the originals, or copies certified or
otherwise identified, of corporate records of the Company, including minute
books of the Company as furnished to us by the Company, certificates of public
officials and of representatives of the Company, statutes and other instruments
or documents, as a basis for the opinions hereinafter expressed. In giving such
opinions, we have relied upon certificates of officers of the Company with
respect to the accuracy of the material factual matters contained in such
certificates. In making our examination, we have assumed that all signatures on
documents examined by us are genuine, that all documents submitted to us as
originals are authentic and that
<PAGE>
Houston Lighting & Power Company -2- January 21, 1997
all documents submitted to us as certified or photostatic copies conform with
the original copies of such documents.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications set forth herein, we are of the opinion that:
1. The Debentures, when (i) issued and duly executed and
authenticated in accordance with the terms of (a) the Indenture and (b) the
applicable Supplemental Indenture creating such series of Debentures, in the
forms filed as exhibits to the Registration Statement (and assuming the due
authorization, execution and delivery of the Indenture and the applicable
Supplemental Indenture by each of the parties thereto), and (ii) delivered
against payment of the agreed consideration therefor, will be legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
except as such enforceability is subject to (x) any applicable bankruptcy,
insolvency, reorganization or other laws relating to or affecting creditors'
rights generally and (y) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
2. The Guarantees, when issued pursuant to the applicable Guarantee
Agreement, in the form filed as an exhibit to the Registration Statement (and
assuming the due authorization, execution and delivery of the applicable
Guarantee Agreement by each of the parties thereto), will be legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
except as such enforceability is subject to (i) any applicable bankruptcy,
insolvency, reorganization or other laws relating to or affecting creditors'
rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
The opinions set forth above are limited in all respects to matters of
Texas law as in effect on the date hereof. At your request, this opinion is
being furnished to you for filing as Exhibit 5 to the Registration Statement.
Additionally, we hereby consent to the reference to our Firm under the caption
"Validity of Securities" in the Registration Statement. In giving such consent,
we do not thereby concede that we are within the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission promulgated thereunder.
We are delivering this opinion to the Company, and no person other
than the Company may rely upon it without our prior written consent.
Very truly yours,
BAKER & BOTTS, L.L.P.
MSS/TST
<PAGE>
EXHIBIT 5.2-A
[Letterhead of Richards, Layton & Finger]
January 21, 1997
HL&P Capital Trust I
c/o Houston Lighting & Power Company
Houston Industries Incorporated
1111 Louisiana Street
Houston, Texas 77002
Re: HL&P Capital Trust I
--------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Houston Lighting & Power
Company, a Texas corporation ("HL&P"), and HL&P Capital Trust 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 January 10, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on January 10, 1997;
(b) The Trust Agreement of the Trust, dated as of January 10, 1997, among
HL&P, as depositor, and the trustee of the Trust named therein;
<PAGE>
HL&P Capital Trust I
January 21, 1997
Page 2
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus") and preliminary prospectus
supplements (the "Prospectus Supplements"), relating to the ___% Preferred
Securities, Series __, and the ___% Capital Securities, Series __, of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Security" and collectively, the "Securities"), as proposed to be filed
by HL&P, the Trust and others as set forth therein with the Securities and
Exchange Commission on or about January 21, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among HL&P, 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 (excluding Exhibits thereto) (the "Trust Agreement"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 21, 1997,
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
<PAGE>
HL&P Capital Trust I
January 21, 1997
Page 3
persons who are signatories 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 Security is
to be issued by the Trust (collectively, the "Security Holders") of a
certificate for such Security in the form prescribed by the Trust Agreement and
the payment for the Security acquired by it, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the Securities are
issued and sold to the 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 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.
2. The 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.
3. The 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 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. In addition, we hereby
consent to the use of our name under the heading "Validity of Securities" in the
Prospectus and the Prospectus Supplements. 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
<PAGE>
HL&P Capital Trust I
January 21, 1997
Page 4
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,
RICHARDS, LAYTON & FINGER
PMA/GWL/jj
<PAGE>
EXHIBIT 5.2-B
[Letterhead of Richards, Layton & Finger]
January 21, 1997
HL&P Capital Trust II
c/o Houston Lighting & Power Company
Houston Industries Incorporated
1111 Louisiana Street
Houston, Texas 77002
Re: HL&P Capital Trust II
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Houston Lighting & Power
Company, a Texas corporation ("HL&P"), and HL&P Capital Trust II, 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 January 10, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on January 10, 1997;
(b) The Trust Agreement of the Trust, dated as of January 10, 1997, among
HL&P, as depositor, and the trustee of the Trust named therein;
<PAGE>
HL&P Capital Trust II
January 21, 1997
Page 2
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus") and preliminary prospectus
supplements (the "Prospectus Supplements"), relating to the ___% Preferred
Securities, Series __, and the ___% Capital Securities, Series __, of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Security" and collectively, the "Securities"), as proposed to be filed
by HL&P, the Trust and others as set forth therein with the Securities and
Exchange Commission on or about January 21, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among HL&P, 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 (excluding Exhibits thereto) (the "Trust Agreement"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 21, 1997,
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
<PAGE>
HL&P Capital Trust II
January 21, 1997
Page 3
persons who are signatories 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 Security is
to be issued by the Trust (collectively, the "Security Holders") of a
certificate for such Security in the form prescribed by the Trust Agreement and
the payment for the Security acquired by it, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the Securities are
issued and sold to the 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 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.
2. The 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.
3. The 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 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. In addition, we hereby
consent to the use of our name under the heading "Validity of Securities" in the
Prospectus and the Prospectus Supplements. 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
<PAGE>
HL&P Capital Trust II
January 21, 1997
Page 4
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,
RICHARDS, LAYTON & FINGER
PMA/GWL/jj
<PAGE>
EXHIBIT 5.2C
[Letterhead of Richards, Layton & Finger]
January 21, 1997
HL&P Capital Trust III
c/o Houston Lighting & Power Company
Houston Industries Incorporated
1111 Louisiana Street
Houston, Texas 77002
Re: HL&P Capital Trust III
----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Houston Lighting & Power
Company, a Texas corporation ("HL&P"), and HL&P Capital Trust III, 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 January 10, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on January 10, 1997;
(b) The Trust Agreement of the Trust, dated as of January 10, 1997, among
HL&P, as depositor, and the trustee of the Trust named therein;
<PAGE>
HL&P Capital Trust III
January 21, 1997
Page 2
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus") and preliminary prospectus
supplements (the "Prospectus Supplements"), relating to the ___% Preferred
Securities, Series __, and the ___% Capital Securities, Series __, of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Security" and collectively, the "Securities"), as proposed to be filed
by HL&P, the Trust and others as set forth therein with the Securities and
Exchange Commission on or about January 21, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among HL&P, 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 (excluding Exhibits thereto) (the "Trust Agreement"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 21, 1997,
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
<PAGE>
HL&P Capital Trust III
January 21, 1997
Page 3
persons who are signatories 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 Security is
to be issued by the Trust (collectively, the "Security Holders") of a
certificate for such Security in the form prescribed by the Trust Agreement and
the payment for the Security acquired by it, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the Securities are
issued and sold to the 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 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.
2. The 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.
3. The 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 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. In addition, we hereby
consent to the use of our name under the heading "Validity of Securities" in the
Prospectus and the Prospectus Supplements. 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
<PAGE>
HL&P Capital Trust III
January 21, 1997
Page 4
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,
RICHARDS, LAYTON & FINGER
PMA/GWL/jj
<PAGE>
EXHIBIT 5.2D
[Letterhead of Richards, Layton & Finger]
January 21, 1997
HL&P Capital Trust IV
c/o Houston Lighting & Power Company
Houston Industries Incorporated
1111 Louisiana Street
Houston, Texas 77002
Re: HL&P Capital Trust IV
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Houston Lighting & Power
Company, a Texas corporation ("HL&P"), and HL&P Capital Trust IV, 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 January 10, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on January 10, 1997;
(b) The Trust Agreement of the Trust, dated as of January 10, 1997, among
HL&P, as depositor, and the trustee of the Trust named therein;
<PAGE>
HL&P Capital Trust IV
January 21, 1997
Page 2
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus") and preliminary prospectus
supplements (the "Prospectus Supplements"), relating to the ___% Preferred
Securities, Series __, and the ___% Capital Securities, Series __, of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Security" and collectively, the "Securities"), as proposed to be filed
by HL&P, the Trust and others as set forth therein with the Securities and
Exchange Commission on or about January 21, 1997;
(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among HL&P, 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 (excluding Exhibits thereto) (the "Trust Agreement"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 21, 1997,
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
<PAGE>
HL&P Capital Trust IV
January 21, 1997
Page 3
persons who are signatories 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 Security is
to be issued by the Trust (collectively, the "Security Holders") of a
certificate for such Security in the form prescribed by the Trust Agreement and
the payment for the Security acquired by it, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the Securities are
issued and sold to the 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 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.
2. The 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.
3. The 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 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. In addition, we hereby
consent to the use of our name under the heading "Validity of Securities" in the
Prospectus and the Prospectus Supplements. 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
<PAGE>
HL&P Capital Trust IV
January 21, 1997
Page 4
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,
RICHARDS, LAYTON & FINGER
PMA/GWL/jj
<PAGE>
[Letterhead of Baker & Botts, L.L.P. appears here]
Exhibit 8
January 21, 1997
Houston Lighting & Power Company
Houston Industries Plaza
1111 Louisiana
Houston, Texas 77002-5231
Ladies and Gentlemen:
We have acted as counsel to Houston Lighting & Power Company, a Texas
corporation ("HL&P"), and HL&P Capital Trust I, HL&P Capital Trust II, HL&P
Capital Trust III and HL&P Capital Trust IV, each of which is a Delaware
statutory business trust (each a "Trust" and collectively, the "Trusts"),
relating to the registration of (i) $350,000,000 aggregate principal amount of
Junior Subordinated Deferrable Interest Debentures of HL&P (the "Debt
Securities") and (ii) $350,000,000 aggregate liquidation amount of preferred
securities (the "Preferred Securities") or capital securities (the "Capital
Securities") of the Trusts. In that connection, reference is made to the
registration statement under the Securities Act of 1933, as amended, of HL&P and
the Trusts on Form S-3 in the form thereof to be filed on or about the date
hereof with the Securities and Exchange Commission (the "Registration
Statement"), including a prospectus (the "Prospectus"), a prospectus supplement
describing the Preferred Securities (the "Prospectus Supplement-Preferred"), and
a prospectus supplement describing the Capital Securities (the "Prospectus
Supplement-Capital"). Capitalized terms not otherwise defined herein shall have
the meaning specified in the Prospectus, the Prospectus Supplement-Preferred,
and the Prospectus Supplement-Capital.
We have examined the Prospectus, the Prospectus Supplement-Preferred,
and the Prospectus Supplement-Capital, and such other documents and corporate
records as we have deemed necessary or appropriate for purposes of this opinion.
In addition, we have assumed that the Debt Securities, the Preferred Securities
and the Capital Securities will be issued in accordance with the operative
documents described in the Prospectus, the Prospectus Supplement-Preferred, and
the Prospectus Supplement-Capital.
<PAGE>
Houston Lighting & Power Company -2- January 21, 1997
Based on certain assumptions set forth therein,
(i) statements of legal conclusion set forth under the heading
"Certain Federal Income Tax Consequences" in the Prospectus Supplement-
Preferred reflect our opinions on the material tax consequences of the
purchase, ownership and disposition of the Preferred Securities; and
(ii) statements of legal conclusion set forth under the heading
"Certain Federal Income Tax Consequences" in the Prospectus Supplement-
Capital reflect our opinions on the material tax consequences of the
purchase, ownership and disposition of the Capital Securities
based on the Internal Revenue Code of 1986 and applicable regulations
thereunder, both as in effect on the date hereof, and on reported judicial
decisions.
Our opinion is limited to tax matters specifically covered hereby.
We hereby consent to the filing of this opinion as Exhibit 8 to the
Registration Statement and to the references to this Firm in the sections
captioned "Certain Federal Income Tax Consequences" and "Validity of Securities"
in the Prospectus Supplement-Preferred and in the Prospectus Supplement-Capital,
and "Validity of Securities" in the Prospectus. In giving this consent, we do
not thereby admit that we come within the category of a person 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.
Very truly yours,
BAKER & BOTTS, L.L.P.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Houston Lighting & Power Company ("HL&P") on Form S-3 of our report dated
February 29, 1996, appearing in the Annual Report on Form 10-K of HL&P for the
year ended December 31, 1995 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Houston, Texas
January 21, 1997
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ W. T. Cottle
-------------------
W.T. Cottle
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Charles R. Crisp
-----------------------
Charles R. Crisp
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Jack D. Greenwade
---------------------------------------
Jack D. Greenwade
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Lee W. Hogan
-------------------
Lee W. Hogan
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Don D. Jordan
-----------------------------------
Don D. Jordan
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Hugh Rice Kelly
------------------------------------
Hugh Rice Kelly
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ R. Steve Letbetter
----------------------------------------
R. Steve Letbetter
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), one or
more Registration Statements, each on Form S-3 (the "Registration Statement"),
including in each instance any prospectus included therein (a "Prospectus"),
with such amendments (including pre-effective and post-effective amendments) to
each such Registration Statement and any supplement or supplements to the
Prospectus as may be necessary or appropriate, together with any and all
exhibits and other documents related to each such Registration Statement or
Prospectus, in connection with the registration of junior subordinated
debentures of the Company, and/or preferred securities of one or more business
trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Stephen C. Schaeffer
-----------------------------------------
Stephen C. Schaeffer
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation
(the "Company"), intends to file with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), one
or more Registration Statements, each on Form S-3 (the "Registration
Statement"), including in each instance any prospectus included therein (a
"Prospectus"), with such amendments (including pre-effective and post-effective
amendments) to each such Registration Statement and any supplement or
supplements to the Prospectus as may be necessary or appropriate, together with
any and all exhibits and other documents related to each such Registration
Statement or Prospectus, in connection with the registration of junior
subordinated debentures of the Company, and/or preferred securities of one or
more business trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Robert L. Waldrop
-----------------------------------------
Robert L. Waldrop
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation
(the "Company"), intends to file with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"),
one or more Registration Statements, each on Form S-3 (the "Registration
Statement"), including in each instance any prospectus included therein (a
"Prospectus"), with such amendments (including pre-effective and post-effective
amendments) to each such Registration Statement and any supplement or
supplements to the Prospectus as may be necessary or appropriate, together with
any and all exhibits and other documents related to each such Registration
Statement or Prospectus, in connection with the registration of junior
subordinated debentures of the Company, and/or preferred securities of one or
more business trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ David M. McClanahan
----------------------------------
David M. McClanahan
<PAGE>
HOUSTON LIGHTING & POWER COMPANY
Power of Attorney
-----------------
(Junior Subordinated Debentures and Preferred Securities)
WHEREAS, HOUSTON LIGHTING & POWER COMPANY, a Texas corporation
(the "Company"), intends to file with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), one
or more Registration Statements, each on Form S-3 (the "Registration
Statement"), including in each instance any prospectus included therein (a
"Prospectus"), with such amendments (including pre-effective and post-effective
amendments) to each such Registration Statement and any supplement or
supplements to the Prospectus as may be necessary or appropriate, together with
any and all exhibits and other documents related to each such Registration
Statement or Prospectus, in connection with the registration of junior
subordinated debentures of the Company, and/or preferred securities of one or
more business trusts to be formed as wholly-owned subsidiaries of the Company.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint Don D.
Jordan, Hugh Rice Kelly and Stephen W. Naeve, and each of them severally, his
true and lawful attorney or attorneys-in-fact, with power to act with or without
the others and with full power of substitution and resubstitution, to execute in
his name, place and stead, in his capacity as a director or officer or both, as
the case may be, of the Company, each such Registration Statement referred to
above, and any and all amendments (including pre-effective and post-effective
amendments) thereto, and any supplements to the Prospectus as said attorneys-in-
fact or any of them shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, to file the same or
cause the same to be filed with the Commission, and to appear before the
Commission in connection with any matter relating thereto. Each of said
attorneys-in-fact shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done, as fully and for all intents and
purposes as the undersigned might or could do in person, the undersigned hereby
ratifying and approving the acts that said attorneys-in-fact and each of them
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
sixth day of January, 1997.
/s/ Stephen W. Naeve
-------------------------------
Stephen W. Naeve
<PAGE>
EXHIBIT 25.1
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /S/MARY LAGUMINA
--------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit
25.2
================================================================================
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)
----------------------
HL&P CAPITAL TRUST 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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
----------------------
Capital 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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/ PAUL J. SCHMALZEL
--------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.3
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Capital Securities of
HL&P Capital Trust 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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/PAUL J. SCHMALZEL
--------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.4
================================================================================
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)
----------------------
HL&P CAPITAL TRUST II
(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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
----------------------
Capital 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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/PAUL J. SCHMALZEL
---------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.5
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Capital Securities of
HL&P Capital Trust II
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/PAUL J. SCHMALZEL
--------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.6
================================================================================
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)
----------------------
HL&P CAPITAL TRUST III
(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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
----------------------
Capital 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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
--------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.7
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Capital Securities of
HL&P Capital Trust III
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /S/MARY JANE MORRISSEY
--------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.8
================================================================================
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)
----------------------
HL&P CAPITAL TRUST IV
(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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip code)
----------------------
Capital 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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.9
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Capital Securities of
HL&P Capital Trust IV
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/BYRON MERINO
-------------------------
Name: BYRON MERINO
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25.10
================================================================================
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)
----------------------
HL&P CAPITAL TRUST 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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/ STEPHEN J. GIURLANDO
---------------------------
Name: STEPHEN J. GIURLANDO
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25.11
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Preferred Securities of
HL&P Capital Trust 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.)
-2-
<PAGE>
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 January, 1997.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
--------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.12
================================================================================
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)
----------------------
HL&P CAPITAL TRUST II
(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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/ STEPHEN J. GIURLANDO
---------------------------
Name: STEPHEN J. GIURLANDO
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.13
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Preferred Securities of
HL&P Capital Trust II
(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.)
-2-
<PAGE>
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 January, 1997.
THE BANK OF NEW YORK
By: /s/MARY LAGUMINA
--------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.14
================================================================================
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)
----------------------
HL&P CAPITAL TRUST III
(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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /s/ PAUL J. SCHMALZEL
--------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.15
==============================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Preferred Securities of
HL&P Capital Trust III
(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 2 Rector Street, New York,
of 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.)
-2-
<PAGE>
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 January, 1997.
THE BANK OF NEW YORK
By: /S/STEPHEN J. GIURLANDO
----------------------------
Name: STEPHEN J. GIURLANDO
Title: ASSISTANT VICE PRESIDENT
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 25.16
================================================================================
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)
----------------------
HL&P CAPITAL TRUST IV
(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.)
200 West 9th Street Plaza, Box 2105
Wilmington, Delaware 19899
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 25.17
================================================================================
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)
----------------------
HOUSTON LIGHTING & POWER COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0694415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1111 Louisiana
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
HL&P Capital Trust IV
(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 10005
(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.)
-2-
<PAGE>
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.
-3-
<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 January, 1997.
THE BANK OF NEW YORK
By: /S/PAUL J. SCHMALZEL
---------------------------
Name: PAUL J. SCHMALZEL
Title: ASSISTANT TREASURER
-4-
<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 September 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin....................................... $ 4,404,522
Interest-bearing balances................................. 732,833
Securities:
Held-to-maturity securities............................... 789,964
Available-for-sale securities............................. 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold........................................ 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income...................28,728,602
LESS: Allowance for loan and
lease losses................584,525
LESS: Allocated transfer risk
reserve.........................429
Loans and leases, net of unearned
income, allowance, and reserve........................... 28,143,648
Assets held in trading accounts............................ 1,004,242
Premises and fixed assets (including
capitalized leases)...................................... 605,668
Other real estate owned.................................... 41,238
Investments in unconsolidated sub-
sidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding.................................. 949,154
Intangible assets.......................................... 490,524
Other assets............................................... 1,305,839
-----------
Total assets............................................... $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices...................................... $20,441,318
Noninterest-bearing.......8,158,472
Interest-bearing.........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs... 11,710,903
Noninterest-bearing......46,182
Interest-bearing......11,664,721
Federal funds purchased in domes-
tic offices of the bank
Federal funds purchased.................................. 1,565,288
Demand notes issued to the US
Treasury................................................. 293,186
Trading liabilities........................................ 826,856
Other borrowed money
With original maturity of one year
or less................................................ 2,103,443
With original maturity of more than
one year............................................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding.................................... 951,116
Subordinated notes and debentures.......................... 1,020,400
Other liabilities.......................................... 1,522,884
-----------
Total liabilities.......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock............................................... 942,284
Surplus.................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale se-
curities................................................. ( 2,073)
Cumulative foreign currency transla-
tion adjustments......................................... ( 8,403)
-----------
Total equity capital....................................... 3,586,850
-----------
Total liabilities and equity
capital.................................................. $44,043,010
===========
</TABLE>
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 )
Thomas A. Renyi ) Directors
Alan R. Griffith )
)
- --------------------------------------------------------------------------------
