<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 28, 1997
NORTHERN STATES POWER COMPANY
NSP FINANCING I
(Exact name of registrant as specified in its charter)
MINNESOTA 001-03034 41-0448030
DELAWARE (Commission File Number) Applied For
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
414 Nicollet Mall, Minneapolis, Minnesota 55401
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (612) 330-5500
None
____________________________________________________________________
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS.
Northern States Power Company and NSP Financing I (the "Registrants")
are filing herewith the following in connection with the offering by NSP
Financing I of 8,000,000 7-7/8% Trust Originated Preferred Securities
("Preferred Securities") pursuant to the registration statement of the
Registrants, among others, on Form S-3 (No. 333-18917) filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended.
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
4.01 Purchase Agreement for the Preferred Securities, dated as of
January 28, 1997.
4.02 Subordinated Debt Securities Indenture, dated as of January 30, 1997,
between Northern States Power Company and Norwest Bank Minnesota,
National Association, as trustee.
4.05 Preferred Securities Guarantee Agreement, dated as of January 31, 1997,
between Northern States Power Company and Wilmington Trust
Company, as Trustee.
4.10 Amended and Restated Declaration of Trust of NSP Financing I, dated as
of January 31, 1997, including form of Preferred Security .
4.12 Supplemental Indenture, dated as of January 31, 1997, between
Northern States Power Company and Norwest Bank Minnesota,
National Association, as trustee, including form of Junior
Subordinated Debenture.
4.13 Common Securities Guarantee Agreement, dated as of January 31, 1997,
between Northern States Power Company and Wilmington Trust
Company, as Trustee.
4.14 Subscription Agreement, dated as of January 28, 1997, between NSP
Financing I and Northern States Power Company.
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTHERN STATES POWER COMPANY
Date: January 31, 1997 By: /s/ Arland D. Brusven
-----------------------------------
Arland D. Brusven
Vice President -- Finance
S-1
<PAGE>
NORTHERN STATES POWER COMPANY
EXHIBIT INDEX TO FORM 8-K REPORT
EXHIBIT
NUMBER EXHIBIT
4.01 Purchase Agreement for the Preferred Securities, dated as of January
28, 1997.
4.02 Subordinated Debt Securities Indenture, dated as of January 30,
1997, between Northern States Power Company and Norwest Bank
Minnesota, National Association, as trustee.
4.05 Preferred Securities Guarantee Agreement, dated as of January 31,
1997, between Northern States Power Company and Wilmington Trust
Company, as Trustee.
4.10 Amended and Restated Declaration of Trust of NSP Financing I, dated as
of January 31, 1997, including form of Preferred Security.
4.12 Supplemental Indenture, dated as of January 31, 1997, between
Northern States Power Company and Norwest Bank Minnesota,
National Association, as trustee, including form of Junior
Subordinated Debenture.
4.13 Common Securities Guarantee Agreement, dated as of January 31, 1997,
between Northern States Power Company and Wilmington Trust
Company, as Trustee.
4.14 Subscription Agreement, dated as of January 28, 1997, between NSP
Financing I and Northern States Power Company.
E-1
<PAGE>
EXHIBIT 4.1
8,000,000 PREFERRED SECURITIES
NSP FINANCING I
(A DELAWARE TRUST)
7-7/8% TRUST ORIGINATED PREFERRED SECURITIES (SM) ("TOPrS(SM)")*
(LIQUIDATION AMOUNT OF $25.00 PER PREFERRED SECURITY)
PURCHASE AGREEMENT
January 28, 1997
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
DAIN BOSWORTH INCORPORATED
PIPER JAFFRAY INC.
As the Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
NSP Financing I (the "Trust"), a statutory business trust organized under
the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Code, 12 Del. C. Sections 3801 et seq.), and
Northern States Power Company, a Minnesota corporation (the "Company" and,
together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Goldman, Sachs &
- ---------------------------
* (sm) "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co. Inc.
-1-
<PAGE>
Co., A.G. Edwards & Sons, Inc., Bear, Stearns & Co. Inc., Dain Bosworth
Incorporated, Dean Witter Reynolds Inc. and Piper Jaffray Inc., as
representatives (in such capacity, collectively, the "Representatives") of
the several Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), with respect to the sale by the
Trust and the purchase by the Underwriters, acting severally and not jointly,
of the respective number of 7-7/8% Trust Originated Preferred Securities
(liquidation amount of $25 per preferred security) of the Trust ("Preferred
Securities") set forth in said Schedule A, except as may otherwise be
provided in the Pricing Agreement, as hereinafter defined. The Preferred
Securities will be guaranteed by the Company with respect to distributions
and payments upon liquidation, redemption and otherwise (the "Preferred
Securities Guarantee") pursuant to the Preferred Securities Guarantee
Agreement (the "Preferred Securities Guarantee Agreement"), to be dated as of
January 31, 1997, between the Company and Wilmington Trust Company, as
trustee (the "Guarantee Trustee"), and in certain circumstances described in
the Prospectus, the Trust will distribute Subordinated Debt Securities (as
defined herein) to holders of Preferred Securities. The 8,000,000 Preferred
Securities to be purchased by the Underwriters, together with the related
Preferred Securities Guarantee and the Subordinated Debt Securities are
collectively referred to herein as the "Securities."
Prior to the purchase and public offering of the Preferred Securities by
the several Underwriters, the Offerors and the Representatives, acting on
behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Offerors and the Representatives and
shall specify such applicable information as is indicated in Exhibit A
hereto. The offering of the Preferred Securities will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date
of the execution and delivery of the Pricing Agreement, this Agreement shall
be deemed to incorporate the Pricing Agreement.
The Company, and the Trust and NSP Financing II (collectively, the "NSP
Trusts") have filed with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on Form S-3 (No. 333-18917)
covering the registration of securities of the Company and the NSP Trusts,
including the Securities, under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus supplement or
prospectus supplements, and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and such amendments thereto, if
any, as may have been required to the date hereof, and will file such
additional amendments thereto as may hereafter be required. Promptly after
execution and delivery of this Agreement, the Offerors will either (i)
prepare and file a prospectus in accordance with the provisions of Rule
424(b) ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Offerors
have elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations,
prepare and file a term sheet (a "Term Sheet") in accordance with the
provisions of Rule 434 and 424(b). The information included in such Term
Sheet that was omitted from such registration statement at the time it became
effective but that is deemed part of such registration statement at the time
it became effective is referred to as "Rule 434 Information." Each
prospectus used before such Rule 424(b) prospectus has been filed and any
prospectus that omitted the Rule 434 Information, in each case that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule
434 Information is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement"
and after such filing the term
-2-
<PAGE>
"Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "Prospectus." If Rule 434 is
relied on, the term "Prospectus" shall refer to the preliminary prospectus
dated January 21, 1997 together with the Term Sheet and all references in
this Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or
any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934 (the
"1934 Act") which is incorporated by reference in the Registration Statement,
such preliminary prospectus or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable
after the Pricing Agreement has been executed and delivered and the
Declaration (as defined herein), the Indenture (as defined herein), and the
Preferred Securities Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). The entire proceeds from
the sale of the Preferred Securities will be combined with the entire
proceeds from the sale by the Trust to the Company of its common securities
(the "Common Securities," and together with the Preferred Securities, the
"Trust Securities"), as guaranteed by the Company, to the extent set forth in
the Prospectus, with respect to distributions and payments upon liquidation
and redemption (the "Common Securities Guarantee" and together with the
Preferred Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement (the "Common Securities Guarantee Agreement"
and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), to be dated as of January 31, 1997, between the
Company and the Guarantee Trustee, as Trustee, and will be used by the Trust
to purchase $206,190,000 of 7-7/8% subordinated deferrable interest debt
securities (the "Subordinated Debt Securities") issued by the Company. The
Preferred Securities and the Common Securities will be issued pursuant to the
amended and restated declaration of trust of the Trust, to be dated as of
January 31, 1997, (the "Declaration"), among the Company, as Sponsor, Edward
J. McIntyre and Paul Pender (the "Regular Trustees"), Wilmington Trust
Company, as institutional trustee (the "Institutional Trustee"), and
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee," and,
together with the Institutional Trustee and the Regular Trustees, the
"Trustees"), and the holders from time to time of undivided beneficial
interests in the assets of the Trust. The Subordinated Debt Securities will
be issued pursuant to an indenture, to be dated as of January 30, 1997, (the
"Base Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as trustee (the "Debt Trustee"), as supplemented by a supplement
to the Base Indenture, to be dated as of January 31, 1997 (the "Supplemental
Indenture," and together with the Base Indenture and any other amendments or
supplements thereto, the "Indenture"), between the Company and the Debt
Trustee.
-3-
<PAGE>
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors represent and warrant to each Underwriter as of the
date hereof and as of the date of the Pricing Agreement (such later date
being hereinafter referred to as the "Representation Date") and as of the
Closing Time (as hereinafter defined) that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) The Company and the NSP Trusts meet, and at the respective
times of the commencement and consummation of the Offering of the
Securities will meet, the requirements for the use of Form S-3 under
the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act. At
the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on
Form 10-K with the Commission) became effective and at each
Representation Date, the Registration Statement, any Rule 462
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the
1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations") and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus
and at the Closing Time, the Prospectus and any amendments and
supplements thereto did not and will not include an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Offerors elect to rely upon Rule 434 of the 1933 Act Regulations,
the Offerors will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in
this subsection shall not apply to (A) statements in or omissions
from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information furnished to the Offerors in
writing by any Underwriter through Merrill Lynch expressly for use
in the Registration Statement or the Prospectus or (B) that part of
the Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
the offering of Securities will, at the time of such delivery, be
identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(iii) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material
respects to the requirements of the
-4-
<PAGE>
1934 Act and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations") and any documents so filed and
incorporated by reference subsequent to the date of this Agreement
will, when they are filed with the Commission, conform in all
material respects to the requirements of the 1934 Act and the 1934
Act Regulations and none of such documents include or will include
any untrue statement of a material fact or omit or 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) Deloitte & Touche LLP and Price Waterhouse LLP, which audited
certain of the financial statements incorporated by reference in the
Registration Statement, are each independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company and its consolidated
subsidiaries filed as a part of or incorporated by reference in the
Registration Statement or Prospectus fairly present the financial
position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and changes in
financial position for the periods specified, and have been prepared
in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods involved, except as
disclosed in the Prospectus. The unaudited pro forma financial
information included or incorporated by reference in the Registration
Statement and the Prospectus complies in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation
S-X and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of such information. The
selected financial information and the summary financial data
included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of
the audited financial statements incorporated by reference in the
Registration Statement.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Minnesota with due corporate authority to carry on the
business in which it is engaged and to own and operate the
properties used by it in such business, as described in the
Prospectus; the Company is qualified to do business as a foreign
corporation and is in good standing under the laws of the States of
North Dakota and South Dakota; and the Company is not required by
the nature of its business to be licensed or qualified as a foreign
corporation in any other state or jurisdiction; and, except as set
forth in the Prospectus, the Company has all material licenses and
approvals required at the date hereof to conduct its business.
(vii) Each subsidiary of the Company named in Exhibit 21.01 to the
Company's most recent Annual Report on Form 10-K ("Significant
Subsidiary") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which it owns or leases substantial properties or in which the
conduct of its business requires such qualification; all of the
issued and outstanding capital stock of each such subsidiary has
been duly authorized and validly issued and is fully paid and
non-assessable; and the capital stock of each such subsidiary owned
by the Company, directly or through subsidiaries, is owned free and
clear of any pledge, lien, encumbrance, claim or equity.
-5-
<PAGE>
(viii) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, which are material to the Company and its
subsidiaries, and there has not been any material change in the
capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus.
(ix) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act with the
power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement, the Pricing
Agreement, the Preferred Securities, the Common Securities and the
Declaration; the Trust is duly qualified to transact business as a
foreign company and is in good standing in each jurisdiction in
which such qualification is necessary, except where the failure to
so qualify or be in good standing would not have a material adverse
effect on the Trust; the Trust is not a party to or otherwise bound
by any agreement other than those described in the Prospectus; the
Trust is and will, under current law, be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(x) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration
Statement and Prospectus, will be validly issued and will represent
undivided beneficial interests in the assets of the Trust and will
conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Common Securities
is not subject to preemptive or other similar rights; and at the
Closing Time all of the issued and outstanding Common Securities of
the Trust will be directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right.
(xi) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Offerors.
(xii) The Declaration has been duly authorized by the Company and,
at the Closing Time, will have been duly executed and delivered by
the Company and the Trustees, and assuming due authorization,
execution and delivery of the Declaration by the Institutional
Trustee and the Delaware Trustee, the Declaration will, at the
Closing Time, be a valid and binding obligation of the Company and
the Regular Trustees in accordance with its terms, except to the
extent that enforcement thereof may be limited
-6-
<PAGE>
by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) (the "Bankruptcy
Exceptions") and will conform in all material respects to the
description thereof contained in the Prospectus.
(xiii) Each of the Guarantees and the Guarantee Agreements has been
duly authorized by the Company and, when validly executed and
delivered by the Company, and, in the case of the Preferred
Securities Guarantee and the Preferred Securities Guarantee
Agreement, assuming due authorization, execution and delivery of the
Preferred Securities Guarantee by the Guarantee Trustee, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and each of the Guarantees and the Guarantee Agreements
will conform in all material respects to the description thereof
contained in the Prospectus.
(xiv) The Preferred Securities have been duly authorized for
issuance and sale to the Underwriters and, when issued and delivered
against payment therefor as provided herein, will be validly issued
and fully paid and non-assessable undivided beneficial interests in
the assets of the Trust and will conform in all material respects
to the description thereof contained in the Prospectus; the issuance
of the Preferred Securities is not subject to preemptive or other
similar rights.
(xv) The Indenture has been duly authorized and qualified under the
1939 Act and, at the Closing Time, will have been duly executed and
delivered and will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; the Indenture will conform in all material
respects to the description thereof contained in the Prospectus.
(xvi) The Subordinated Debt Securities have been duly authorized by
the Company and, at the Closing Time, will have been duly executed
by the Company and, when authenticated in the manner provided for in
the Indenture and delivered against payment therefor as described in
the Prospectus, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions, and will be in the form contemplated by,
and entitled to the benefits of, the Indenture and will conform in
all material respects to the description thereof in the Prospectus.
(xvii) Each of the Regular Trustees of the Trust is an employee of
the Company and has been duly authorized by the Company to execute
and deliver the Declaration.
(xviii) Neither the Company nor any of its Significant Subsidiaries
is in violation of its charter or by-laws or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or any other instrument to
which the Company or any of such Significant Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of such Significant
Subsidiaries is subject, or in violation of any applicable law,
administrative
-7-
<PAGE>
regulation or administrative or court order or decree, which
violation or default would, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(xix) The Trust is not in violation of the Declaration or its
certificate of trust filed with the State of Delaware on
December 23, 1996 (the "Certificate of Trust"); none of the
execution, delivery and performance of this Agreement, the Pricing
Agreement, the Declaration, the Preferred Securities, the Common
Securities, the Indenture, the Subordinated Debt Securities, the
Guarantee Agreements and the Guarantees and the consummation of the
transactions contemplated herein and therein and compliance by the
Offerors with their respective obligations hereunder and thereunder
did or will result in a breach of any of the terms or provisions of,
or constitute a default under or require the consent of any party
under the Certificate of Trust of the Trust or the Articles of
Incorporation or by-laws of the Company and its subsidiaries, any
contract, indenture, mortgage, note, lease, agreement or other
instrument to which either the Trust, the Company or any of its
subsidiaries is a party or by which any of them may be bound, any
applicable law, rule or regulation or any judgment, order or decree
of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Trust, the Company or any of
its subsidiaries or any of their respective properties or assets, or
did or will result in the creation or imposition of any lien on the
properties or assets of the Trust, the Company or any of its
subsidiaries.
(xx) The Minnesota Public Utilities Commission has issued its order
approving the Company's capital structure which order authorizes the
issuance of the Subordinated Debt Securities and Guarantees and no
other approval of any regulatory public body, state or federal, is,
or will be at the Closing Time, necessary in connection with the
issuance and the sale of the Securities pursuant to this Agreement,
other than approvals that may be required under state securities
laws.
(xxi) The Company has good and valid title to all real and fixed
property and leasehold rights purported to be owned by it subject
only to: (a) taxes and assessments not yet delinquent; (b) the lien
of the Company's first mortgage indenture; (c) as to parts of the
Company's property, certain easements, conditions, restrictions,
leases, and similar encumbrances which do not affect the Company's
use of such property in the usual course of its business, and
certain minor defects in titles which are not material, and defects
in titles to certain properties which are not essential to the
Company's business; and (d) mechanics' lien claims being contested
or not of record or for the satisfaction or discharge of which
adequate provision has been made by the Company; and any real
property and buildings held under lease by the Company are held by
it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by
Company.
(xxii) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its
-8-
<PAGE>
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(xxiii) Neither the Trust nor the Company is, and following
consummation of the transactions contemplated hereby and the
application of the proceeds therefrom in the manner set forth in the
Prospectus will 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.
(xiv) Except as set forth in the Prospectus, the Company and its
subsidiaries (A) are in compliance with any and all applicable
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct its respective business and (C) are in compliance with
all terms and conditions of any such permits, licenses or approvals,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(b) Any certificate signed by any officer of the Company or a Trustee
of the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or
the Trust, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Underwriter, and each Underwriter, severally and not
jointly, agrees to purchase from the Trust, at the price per security set
forth in the Pricing Agreement, the number of Preferred Securities set forth
in Schedule A hereto opposite the name of such Underwriter, plus any
additional number of Preferred Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(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 used to purchase the Subordinated Debt Securities of the
Company, the Company hereby agrees to pay to the Representatives, for the
accounts of the several Underwriters, a commission per security set forth in
the Pricing Agreement as compensation to the Underwriters for their
commitments under this Agreement.
(c) Delivery of certificates for the Securities shall be made at the
offices of the Underwriters in New York, and payment of the purchase price
for the Securities shall be made at the offices of the Company or
at such other place as shall be agreed upon by the Underwriters and the
Offerors, at 10:00 a.m. (New York time) on the third business day after
execution of the Pricing Agreement (or, if pricing of the Securities occurs
after 4:30 p.m. Eastern time, on the fourth full business day thereafter)),
or such other time not later than ten business days after such date as shall
be agreed upon by the Underwriters and the Offerors (such time and date of
payment and delivery being herein called the "Closing Time"). Payment for
the Preferred Securities purchased by the Underwriters shall be made to the
Trust by wire transfer of immediately available funds, payable to the Trust,
against delivery
-9-
<PAGE>
to the respective accounts of the Underwriters of certificates for the
Preferred Securities to be purchased by it. Certificates for the Preferred
Securities shall be in such denominations and registered in such names as the
Underwriters may request in writing at least two full business days before
the Closing Time. Merrill Lynch, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Preferred Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
At the Closing Time, the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under Section 2(b) hereof
by wire transfer of immediately available funds to a bank account designated
by Merrill Lynch. The certificates for the Preferred Securities will be made
available for examination and packaging by the Underwriters no later than
10:00 a.m. (New York City time) on the last business day prior to the Closing
Time.
SECTION 3. COVENANTS OF THE OFFERORS. The Offerors agree with each
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Offerors
will cause the Prospectus, including as a part thereof a prospectus
supplement relating to the Securities, to be filed with the Commission
pursuant to Rule 424 of the 1933 Act Regulations and the Offerors will
promptly advise the Underwriters when such filing has been made. Prior to
the filing, the Offerors will cooperate with the Underwriters in the
preparation of such prospectus supplement to assure that the Underwriters
have no reasonable objection to the form or content thereof when filed or
mailed.
(b) The Offerors will comply with the requirements of Rule 430A of
the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and
as applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment
to the Registration Statement or the filing of any supplement or amendment to
the Prospectus, (ii) the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose and (v) of the issuance by any state
securities commission or other regulatory authority of any order suspending
the qualification or the exemption from qualification of the Securities under
state securities or Blue Sky laws or the initiation or threatening of any
proceeding for such purpose. The Offerors will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(c) The Company will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations) any Term Sheet or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise; will furnish the Underwriters with copies of any such
Rule 462(b) Registration Statement, Term Sheet, amendment, supplement or
revision a reasonable amount of time prior to such proposed filing or use, as
the case may be; and will not file any such Rule 462(b) Registration
Statement, Term Sheet, amendment, supplement or revision to which the
Underwriters or counsel for the Underwriters shall object.
(d) The Company will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto
-10-
<PAGE>
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts and will also
deliver to Merrill Lynch, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. If applicable, the copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) The Company will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. If applicable, the Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Registration Statement and the Prospectus. If at any
time when the Prospectus is required by the 1933 Act or the 1934 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion
of counsel for the Underwriters or for the Offerors, to amend the
Registration Statement in order that the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or to amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Offerors will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment
or supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements, and the Offerors will furnish to the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(g) The Offerors will use their best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic
or foreign) as Merrill Lynch may designate; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for so long as may be required in connection with distribution of the
Securities.
(h) The Company will, on behalf of the Trust, make generally
available to the Trust's securityholders as soon as practicable, but not
later than 45 days (or 90 days, in the case of a period that is also the
Company's fiscal year) after the close of the period covered thereby, a
consolidated earnings statement of the Company (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month
period beginning not later than the first day of the Company's
-11-
<PAGE>
fiscal quarter next following the "effective date" (as defined in said Rule
158) of the Registration Statement.
(i) The Trust will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(j) If the Offerors elect to rely upon Rule 462(b), the Offerors
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the 1933 Act Regulations by the earlier of (i) 10:00 p.m. Eastern
time on the date of the Pricing Agreement and (ii) the time confirmations are
sent or given, as specified by Rule 462(b)(2).
(k) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within
the time periods required by the 1934 Act and the 1934 Act Regulations.
(l) The Offerors will use their best efforts to effect the listing of
the Preferred Securities (including the Preferred Securities Guarantee with
respect thereto) on the New York Stock Exchange and to cause the Securities
to be registered under the 1934 Act. If the Preferred Securities are
exchanged for Subordinated Debt Securities, the Company will use its best
efforts to effect the listing of the Subordinated Debt Securities on the
exchange on which the Preferred Securities were then listed and to cause the
Subordinated Debt Securities to be registered under the 1934 Act.
(m) Until March 2, 1997, neither the Trust nor the Company will,
without the prior written consent of the Underwriters, (i) directly or
indirectly, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, or enter into any agreement to sell, any Preferred
Securities, any security convertible into or exchangeable or exercisable for
Preferred Securities, or any equity securities substantially similar to the
Preferred Securities or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap
or transaction described in clause (i) or (ii) above is settled by delivery
of Common Stock or such other securities in cash or otherwise (except the
Subordinated Debt Securities and the Preferred Securities issued pursuant to
this Agreement).
(n) During a period of three years from the Closing Time, the Company
will make generally available to the Underwriters copies of all reports and
other communications (financial or other) mailed to stockholders, and to
deliver to the Underwriters promptly after they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the
Company is listed; and shall furnish such additional information concerning
the business and financial condition of the Company as the Underwriters may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission).
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement and the
Pricing Agreement, including, without limitation, expenses related to the
following, if incurred: (i) the preparation, delivery, printing and filing
of the Registration Statement and Prospectus as originally filed (including
financial statements and exhibits) and of each amendment thereto, (ii) the
printing and delivery to the Underwriters of this Agreement, the Pricing
Agreement, any Agreement among Underwriters and such other documents as
-12-
<PAGE>
may be required in connection with the offering, purchase, sale and delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Preferred Securities, (iv) the fees and disbursements of
the Company's counsel, accountants and other advisors or agents (including
the transfer agents and registrars) as well as fees and disbursements of the
Trustees and any Depository, and their respective counsel, (v) the
qualification of the Securities under state securities laws in accordance
with the provisions of Section 3(g), including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky Survey and any Legal
Investment Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each
amendment thereto, of each preliminary prospectus, any Term Sheet and of the
Prospectus and any amendments or supplements thereto, (vii) the printing and
delivery to the Underwriters of copies of any Blue Sky Survey and any Legal
Investment Survey, (viii) any fees payable in connection with the rating of
the Preferred Securities by nationally recognized statistical rating
organizations; (ix) the filing fees incident to, and the fees and
disbursements of counsel to the Underwriters in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the "NASD")
of the terms of the sale of the Preferred Securities; (x) any fees payable to
the Commission; and (xi) the fees and expenses incurred in connection with
the listing of the Preferred Securities and, if applicable, the Subordinated
Debt Securities on the New York Stock Exchange.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of Gardner, Carton & Douglas, counsel
for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters to purchase and pay for the Preferred Securities pursuant
to this Agreement are subject to the accuracy of the representations and
warranties of the Offerors herein contained or in certificates of any officer
of the Company or any subsidiary or the trustees of the Trust delivered
pursuant to the provisions hereof, to the performance by the Offerors of
their obligations hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the 1933 Act no
later than 5:30 p.m., New York City time, on the date hereof, and on the date
hereof and at the Closing Time, no stop order suspending the effectiveness of
the Registration Statement or any part hereof shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the satisfaction of counsel to
the Underwriters. A prospectus containing information relating to the
description of the Securities, the specific method of distribution and
similar matters shall have been filed with the Commission in accordance with
Rule 424(b)(1), (2), (3), (4) or (5), as applicable or, if the Company has
elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet
including the Rule 434 Information shall have been filed with the Commission
in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of Gary R.
Johnson, Esq., Vice President, General Counsel and Corporate Secretary of the
Company, in form and substance satisfactory to counsel for the Underwriters,
to the effect that:
-13
<PAGE>
(i) The Company is a legally existing corporation under the laws of
the State of Minnesota, North Dakota or South Dakota; has corporate
power, right, and authority to do business and to own property in the
states of Minnesota, North Dakota, and South Dakota in the manner and
as set forth in the Prospectus; and has corporate power, right and
authority to own securities of its subsidiaries.
(ii) The authorized capital stock of the Company is as set forth in
the Prospectus and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable.
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of each
subsidiary has been duly authorized and validly issued and is fully
paid and non-assessable; and the capital stock of each such subsidiary
owned by the Company, directly or indirectly or through subsidiaries,
is owned free and clear of any pledge, lien, encumbrance, claim or
equity.
(iv) The Trust is not required to be qualified and in good standing as
a foreign company in Minnesota, South Dakota or North Dakota, except
to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Trust; and the Trust
is not a party to or otherwise bound by any agreement other than those
described in the Prospectus.
(v) The Declaration has been duly authorized, executed and delivered
by the Company and the trustees and is a valid and binding obligation
of the Company, enforceable against the Company and each of the
Regular Trustees in accordance with its terms, except as enforcement
thereof may be limited by the Bankruptcy Exceptions; and the
Declaration has been duly qualified under the 1939 Act.
(vi) The Registration Statement has become effective under the 1933
Act. The prospectus supplement has been filed pursuant to Rule 424(b)
under the 1933 Act, and no proceedings for a stop order have been
instituted or are pending or to the knowledge of such counsel
threatened under Section 8(d) of the 1933 Act; the Minnesota Public
Utilities Commission has issued its order approving the Company's
capital structure which order authorizes the issuance of the
Securities and no further approval of, authorization, consent,
certificate or order of any governmental body, federal, state or
other, is required in connection with the issuance and sale of the
Securities to you as provided in the Agreement, except as may be
required by state securities laws.
(vii) At the time the Registration Statement became effective, the
Registration Statement (other than the financial statements and
supporting schedules included or incorporated by reference therein, as
to which no opinion is being expressed) complied as to form in all
material respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1939 Act and the 1939 Act Regulations; and the
Declaration, the Indenture, the Preferred Securities Guarantee
Agreement and the Statements of Eligibility on Forms T-1 with respect
to each of the Institutional Trustee, the Debt
-14-
<PAGE>
Trustee, and the Guarantee Trustee filed with the Commission as part of
the Registration Statement complied as to form in all material respects
with the requirements of the 1939 Act and the 1939 Act Regulations.
(viii) Each of the documents incorporated by reference in the
Registration Statement or the Prospectus at the time they were filed
or last amended (other than the financial statements and the notes
thereto, the financial schedules, and any other financial or
statistical data included or incorporated by reference therein, as to
which such counsel need express no belief) complied as to form in all
material respects with the requirements of the 1934 Act, and the 1934
Act Regulations, as applicable; and such counsel has no reason to
believe that any of such documents, when such documents became
effective or were so filed, as the case may be, contained, in the case
of a registration statement which became effective under the 1933 Act,
an untrue statement of a material fact, or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and in the case of other documents which were
filed under the 1934 Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein not misleading.
(ix) The Company and each of the NSP Trusts meet the registrant
requirements for use of Form S-3 under the 1933 Act Regulations.
(x) The Common Securities, the Preferred Securities, the Subordinated
Debt Securities, each of the Guarantees, the Declaration, the
Indenture and each of the Guarantee Agreements conform in all material
respects to the descriptions thereof contained in the Prospectus.
(xi) The information in the Prospectus under the captions "NSP",
"Proposed Merger," "NSP Financing I", "Risk Factors", "Use of
Proceeds", "Capitalization", "Description of the Preferred
Securities", "Description of the Guarantee", "Description of the
Junior Subordinated Debentures", "Effect of Obligations under the
Junior Subordinated Debentures and the Guarantee", "Description of
Subordinated Debt Securities", and "Description of the Preferred
Securities Guarantees" to the extent that they involve matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
(xii) All of the issued and outstanding Common Securities of the Trust
are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
(xiii) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by each of the Trust and the
Company.
(xiv) Each of the Guarantees and Guarantee Agreements has been duly
authorized, executed and delivered by the Company; the Preferred
Securities Guarantee and the Preferred Securities Guarantee Agreement,
assuming they are duly authorized, executed and delivered by the
Guarantee Trustee, constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except to the
-15-
<PAGE>
extent that enforcement thereof may be limited by Bankruptcy Exceptions;
and the Preferred Securities Guarantee and the Preferred Securities
Guarantee Agreement have been duly qualified under the 1939 Act.
(xv) The Indenture has been duly executed and delivered by the Company
and, assuming due authorization, execution, and delivery thereof by
the Debt Trustee, is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Indenture has been duly qualified under
the 1939 Act.
(xvi) The Subordinated Debt Securities are in the form contemplated by
the Indenture, have been duly authorized, executed and delivered by
the Company and, when authenticated by the Debt Trustee in the manner
provided for in the Indenture and delivered against payment therefor
as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xvii) The execution, delivery and performance of this Agreement, the
Pricing Agreement, the Declaration, the Preferred Securities, the
Common Securities, the Indenture, the Subordinated Debt Securities,
the Guarantee Agreements, and the Guarantees and the consummation of
the transactions contemplated herein and therein, and the compliance
by each of the Offerors with their respective obligations hereunder
and thereunder do not and will not conflict with, result in a breach
of, or constitute a default under or require the consent of any party
under the Certificate of Trust of the Trustee or the Restated Articles
of Incorporation or by-laws of the Company, or any contract,
indenture, mortgage, agreement, note, lease or other instrument known
to such counsel to which the Trust or the Company is a party or by
which any of them may be bound, or, to the best of such counsel's
knowledge, any applicable law, rule or regulation, or any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Trust, the
Company or any of its subsidiaries or any of their respective
properties or assets or did or will result in the creation or
imposition of any lien on the properties or assets of the Trust, the
Company or any of its subsidiaries.
(xviii) Such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required nor 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 as required.
(xix) The Company has good and valid title to all real and fixed
property and leasehold rights purported to be owned by it subject only
to: (a) taxes and assessments not yet delinquent; (b) the lien of the
first mortgage indenture; (c) as to part of the Company's property,
certain easements, conditions, restrictions, leases, and similar
encumbrances which do not affect the Company's use of such property in
the usual course of its business, certain minor defects in titles
which are not material, defects in titles to certain properties which
are not essential to the Company's business; and (d)
-16-
<PAGE>
mechanics' lien claims being contested or not of record or for the
satisfaction or discharge of which adequate provision has been made by
the Company pursuant to the Indenture.
(xx) The Company has all necessary power under statutory provisions,
franchises (which expire at various dates), or permits to serve the
customers in the jurisdictions where it provided electric and gas
service, except in certain instances that are not material to the
Company.
(xxi) None of the Trust or the Company or any of its subsidiaries is,
and following consummation of the transactions contemplated hereby and
the application of the proceeds therefrom in the manner set forth in
the Prospectus will be, an "investment company" or under the "control"
of an "investment company" as such terms are defined.
Moreover, such counsel shall confirm that nothing has come to his attention
that would lead him to believe that the Registration Statement at the time it
became effective contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of the date
of the Agreement or at the Closing Time contained an untrue statement of a
material fact or omitted 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.
The foregoing opinions may be limited to the laws of Delaware, Minnesota
and the federal law of the United States. In giving such opinion, such
counsel may rely, as to matters of Delaware Law, upon the opinion of
Richards, Layton & Finger, special Delaware counsel to the Offerors, in which
case the opinion shall state that such counsel believes that you and such
counsel are entitled to so rely.
(2) The favorable opinion, dated as of Closing Time, of Richards, Layton
& Finger, special counsel to the Offerors, in form and substance satisfactory
to counsel for the Underwriters, 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 Act, and has the
business trust power and authority to conduct its business as
described in the Registration Statement and the Prospectus.
(ii) Assuming that the Declaration has been duly authorized, executed
and delivered by the Company and the Trustees, the Declaration
constitutes a valid and binding obligation of the Trustees and the
Company and is enforceable against the Trustees and the Company in
accordance with its terms, except that to the extent enforceability
thereof may be limited by the Bankruptcy Exceptions.
(iii) Under the Delaware Act and the Declaration, the Trust has the
power and authority to (i) execute and deliver, and to perform its
obligations under, this Agreement and the Pricing Agreement and (ii)
issue, and perform its obligations under, the Trust Securities.
(iv) The execution and delivery by the Trust of this Agreement and the
Pricing Agreement, and the performance by the Trust of its obligations
hereunder and under the
-17-
<PAGE>
Pricing Agreement, have been duly authorized by all necessary action on
the part of the Trust.
(v) The Preferred Securities have been duly authorized by the
Declaration and, when executed by the Trust and the Institutional
Trustee in accordance with the Declaration and delivered against
payment therefore in accordance with the terms of this Agreement, will
be validly issued and, subject to the qualifications hereinafter
expressed in this paragraph (v), fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; said counsel may
note that the holders of the Preferred Securities may be obligated to
make payments as set forth in the Declaration.
(vi) The Common Securities have been duly authorized by the
Declaration and, when issued, executed and authenticated in accordance
with the terms of the Declaration, and delivered and paid for as set
forth in the Registration Statement, will be validly issued, undivided
beneficial interests in the assets of the Trust.
(vii) Under the Delaware Act and the Declaration, the issuance of the
Trust Securities is not subject to preemptive or other similar rights.
(viii) The issuance and sale by the Trust of the Preferred Securities
and Common Securities; the execution, delivery and performance by the
Trust of this Agreement and the Pricing Agreement; the consummation of
the transactions contemplated herein; and compliance by the Trust with
its obligations hereunder will not violate any of the provisions of
the Certificate of Trust or Declaration or any applicable Delaware law
or administrative regulation.
-18-
<PAGE>
(ix) None of the execution and delivery by the Trust of, or the
performance by the Trust of its obligations under, this Agreement, the
issuance and sale of the Preferred Securities by the Trust in
accordance with the terms of this Agreement and the Pricing Agreement,
the execution, delivery and performance by the Trust of this Agreement
and the Pricing Agreement and the consummation of the other
transactions contemplated thereby, will contravene any provisions of
applicable Delaware law or administrative regulations or the
Certificate of Trust or the Declaration.
(3) The favorable opinion, dated as of the Closing Time, of Richards,
Layton & Finger, counsel to Wilmington Trust Company, as Institutional
Trustee under the Declaration, and Guarantee Trustee under the Preferred
Securities Guarantee Agreements, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) Wilmington Trust Company is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing
under the laws of the State of Delaware with all necessary power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of the Declaration and the Preferred
Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the Institutional
Trustee of the Declaration and the execution, delivery and performance
by the Guarantee Trustee of the Preferred Securities Guarantee
Agreement have been duly authorized by all necessary corporation
action on the part of the Institutional Trustee and the Guarantee
Trustee, respectively. The Declaration and the Preferred Securities
Guarantee Agreement have been duly executed and delivered by the
Institutional Trustee and the Guarantee Trustee, respectively.
(iii) The execution, delivery and performance of the Declaration and
the Preferred Securities Guarantee Agreement by the Institutional
Trustee and the Guarantee Trustee, respectively, do not conflict with
or constitute a breach of the Articles of Organization or Bylaws of
the Institutional Trustee and the Guarantee Trustee, respectively.
-19-
<PAGE>
(iv) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for
the execution, delivery or performance by the Institutional Trustee
and the Guarantee Trustee of the Declaration and the Preferred
Securities Guarantee Agreement.
(4) The opinion of Gardner, Carton & Douglas, special tax counsel to the
Offerors, generally to the effect that (i) under current law, for United
States federal income tax purposes the Subordinated Debt Securities will
constitute indebtedness of the Company; (ii) under current law, the Trust
will be classified for United States federal income tax purposes as a grantor
trust and not as an association taxable as a corporation; and (iii) the
discussion set forth in the Prospectus under the heading "United States
Federal Income Taxation" is a fair and accurate summary of the matters
addressed therein, based upon current law and the assumptions stated or
referred to therein. Such opinion may be conditioned on, among other things,
the initial and continuing accuracy of the facts, financial and other
information, covenants and representations set forth in certificates of
officers of the Company and the Trust and other documents deemed necessary
for such opinion.
(5) The favorable opinion, dated as of the Closing Time, of Gardner,
Carton & Douglas, counsel for the Underwriters, in form and substance
satisfactory to the Underwriters with respect to the incorporation and legal
existence of the Company, the Preferred Securities, the Indenture, the
Preferred Securities Guarantee Agreement, this Agreement, the Pricing
Agreement, the Registration Statement, the Prospectus and other related
matters as the Representatives may require. In giving its opinion, Gardner,
Carton & Douglas may rely as to certain matters of Minnesota law and Delaware
law upon the opinions of Gary R. Johnson, and Richards, Layton & Finger,
special Delaware counsel for the Offerors, which shall be delivered in
accordance with Section 5(b)(1) and 5(b)(2) hereto.
(c) Between the date of this Agreement and prior to the Closing Time, no
material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries considered as one enterprise,
whether or not in the ordinary course of business.
(d) At the Closing Time, the Representatives shall have received a
certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, and dated as of Closing Time,
to the effect that (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiaries
considered as one enterprise, whether or not in the ordinary course of
business, (ii) the representations and warranties in Section 1 hereof are
true and correct as though expressly made at and as of the Closing Time,
(iii) the Trust and the Company have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or
prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) The Representatives shall have received letters from the Company's
independent public accountants (dated the date of this Agreement and Closing
Time, respectively, and in form and substance satisfactory to the
Representatives) advising that (i) they are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations; (ii) in their opinion,
the consolidated financial statements and supplemental schedules incorporated
by reference in the Registration Statement and covered by their opinion filed
with the Commission under Section 13 of the 1934 Act comply as to form in all
material respects with the applicable accounting requirements of the 1934 Act
and the 1934 Act Regulations; (iii) they have performed limited procedures,
not constituting an audit, including a reading of the latest available
interim financial statements of the Company and its consolidated
subsidiaries, a reading of the minutes of meetings of the Board of Directors,
committees thereof, and the shareholders, of the Company and its subsidiaries
since the date of the most recent audited financial statements included or
-20-
<PAGE>
incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial accounting matters and
such other inquiries and procedures as may be specified in such letter, and
on the basis of such limited review and procedures nothing came to their
attention that caused them to believe that: (a) any material modifications
should be made to any unaudited consolidated financial statements of the
Company included or incorporated by reference in the Registration Statement
or Prospectus for them to be in conformity with generally accepted accounting
principles or any unaudited consolidated financial statements of the Company
included or incorporated by reference in the Registration Statement or
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the 1934 Act Regulations
applicable to Form 10-Q; (b) with respect to the period subsequent to the
date of the most recent financial statements included or incorporated by
reference in the Prospectus, there were any changes, at a specified date not
more than five business days prior to the date of the letter, in the capital
stock of the Company, increases in long-term debt or decreases in
stockholders' equity or net current assets of the Company and its
consolidated subsidiaries as compared with the amounts shown on the most
recent consolidated balance sheet included or incorporated in the Prospectus,
or for the period from the date of the most recent financial statements
included or incorporated by reference in the Prospectus to such specified
date there were any decreases, as compared with the corresponding period in
the preceding year, in operating revenues, operating income, net income, or
earnings per share of Common Stock of the Company and its subsidiaries,
except in all instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the Company
as to the significance thereof unless said explanation is not deemed
necessary by the Representatives; (iv) they have carried out specified
procedures performed for the purpose of comparing certain specified financial
information and percentages (which is limited to financial information
derived from general accounting records of the Company) included or
incorporated by reference in the Registration Statement and Prospectus with
indicated amounts in the financial statements or accounting records of the
Company and (excluding any questions of legal interpretation) have found such
information and percentages to be in agreement with the relevant accounting
and financial information of the Company referred to in such letter in the
description of the procedures performed by them and (v) on the basis of a
reading of the unaudited pro forma financial information included or
incorporated by reference in the Registration Statement and the Prospectus,
carrying out certain specified procedures that would not necessarily reveal
matters of significance with respect to the comments set forth in this clause
(v), inquiries of certain officials of the Company who have responsibility
for financial and accounting matters and proving the arithmetic accuracy of
the application to the pro forma adjustments to the historical amounts in the
unaudited pro forma financial information, nothing came to their attention
that caused them to believe that the unaudited pro forma financial
information does not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such information.
(f) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Securities
as herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Underwriters
and counsel for the Underwriters.
(g) At the Closing Time, the Preferred Securities shall be rated in one
of the four highest rating categories for long term debt ("Investment Grade")
by any nationally recognized statistical rating agency, and the Trust shall
have delivered to the Representatives a letter, dated the Closing Time, from
such nationally recognized statistical rating agency, or other evidence
satisfactory to the Representatives,
-21-
<PAGE>
confirming that the Preferred Securities have Investment Grade ratings; and
there shall not have occurred any decrease in the ratings of any securities
of the Company or of the Preferred Securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the 1933 Act Regulations) and such organization shall not have publicly
announced that it has under surveillance or review its rating of any of the
securities of the Company or of the Preferred Securities.
(h) At the Closing Time, the Preferred Securities shall have been
approved for listing on the New York Stock Exchange upon notice of issuance.
(i) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4, and except that
Sections 1, 6, 7 and 8 shall survive and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be a part
thereof, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, provided that (subject
to Section 6(d) below) any such settlement is effected with the
written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
-22-
<PAGE>
provided, however, that the foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to the
Offerors by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its Trustees who signed the Registration
Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Offerors by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by Merrill Lynch, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Offerors. An indemnifying party
may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of
-23-
<PAGE>
such settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
SECTION 7. CONTRIBUTION.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Offerors on the one hand,
and the Underwriters, on the other hand, from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Offerors on the one hand, and the
Underwriters, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by Offerors on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Offerors and the total
underwriting discount received by the Underwriters, in each case as set forth
on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet, bear to the aggregate initial public offering
price of such Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
-24-
<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company and each
Trustee of the Trust who signed the Registration Statement, and each person,
if any, who controls the Company and the Trust within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as the Offerors. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number
or aggregate principal amount, as the case may be, of Preferred Securities
set forth opposite their respective names in Schedule A to this Agreement,
and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers
of the Company submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of and payment for the Preferred Securities to the
Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the time of execution of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial
markets in the United States, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Preferred
Securities or to enforce contracts for the sale of the Preferred Securities,
or (iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such
system or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal, Minnesota or New York
authorities.
(b) If this Agreement and the Pricing Agreement are terminated pursuant
to this Section 9, such termination shall be without liability of any party
to any other party except as provided in Section 4, and provided, further,
that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at the Closing Time, as the case may be, to purchase
the Securities which it or they are
-25-
<PAGE>
obligated to purchase under this Agreement and the Pricing Agreement (the
"Defaulted Securities"), then Merrill Lynch shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, Merrill Lynch shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be, of
Defaulted Securities does not exceed 10% of the total number or aggregate
principal amount, as the case may be, of Preferred Securities, the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be, of
Defaulted Securities exceeds 10% of the total number or aggregate principal
amount, as the case may be, of Preferred Securities to be purchased on such
date pursuant to this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either Merrill Lynch or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at Merrill Lynch World
Headquarters, World Financial Center, North Tower, New York, New York 10281,
Attention: Richard A. Vaccari, Managing Director, with a copy to Gardner,
Carton & Douglas, 321 North Clark Street, Chicago, Illinois 60610, Attention:
Robert J. Joseph, Esq.; notices to the Company shall be directed to it at
Northern States Power Company, 414 Nicollet Mall, Minneapolis, Minnesota
55401, Attention: Secretary.
SECTION 12. PARTIES. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Offerors and the
Underwriters and their respective successors. Nothing expressed or mentioned
in this Agreement or the Pricing Agreement is intended or shall be construed
to give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the parties hereto and thereto and their respective
successors and legal representatives, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF MINNESOTA APPLICABLE TO AGREEMENTS MADE AND TO BE
-26-
<PAGE>
PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER TO TIME UNLESS
OTHERWISE INDICATED.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
-27-
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, shall become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
NORTHERN STATES POWER COMPANY
By: /s/ Edward J. McIntyre
--------------------------------------
Name: Edward J. McIntyre
Title: Vice President and Chief
Financial Officer
NSP FINANCING I
By: /s/ Paul Pender
--------------------------------------
Name: Paul Pender
Title: Regular Trustee
By: /s/ Edward J. McIntyre
--------------------------------------
Name: Edward J. McIntyre
Title: Regular Trustee
CONFIRMED AND ACCEPTED
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
GOLDMAN, SACHS & CO.
A.G. EDWARDS & SONS, INC.
BEAR, STEARNS & CO. INC.
DAIN BOSWORTH INCORPORATED
DEAN WITTER REYNOLDS INC.
PIPER JAFFRAY INC.
By: MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By: /s/ Maria Marta Falkinhoff
-----------------------------------
Authorized Signatory
For themselves and as the Representatives of the
several Underwriters named in Schedule A hereto.
-28-
<PAGE>
SCHEDULE A
Name of Underwriter Number of Shares
------------------- ----------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated 1,100,000
Goldman, Sachs & Co. 1,000,000
Bear, Stearns & Co. Inc. 1,000,000
Dean Witter Reynolds Inc. 1,000,000
A.G. Edwards & Sons, Inc. 1,000,000
Dain Bosworth Incorporated 1,000,000
Piper Jaffray Inc. 1,000,000
Robert W. Baird & Co. Incorporated 100,000
Alex. Brown & Sons Incorporation 100,000
Cowen & Company 100,000
EVEREN Securities, Inc. 100,000
The Ohio Company 100,000
Prudential Securities Incorporated 100,000
Tucker Anthony Incorporated 100,000
Wheat, First Securities, Inc. 100,000
Total 8,000,000
----------
----------
-29-
<PAGE>
EXHIBIT A
8,000,000 Preferred Securities
NSP FINANCING I
(a Delaware business trust)
7-7/8% Trust Originated Preferred Securities (sm) ("TOPrS (sm)")*
(Liquidation Amount of $25 Per Security)
PRICING AGREEMENT
January 28, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated as
Representative of the several
Underwriters named in the within-
mentioned Purchase Agreement
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Purchase Agreement, dated January 28, 1997 (the
"Purchase Agreement"), relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Bear, Stearns &
Co. Inc., Dean Witter Reynolds Inc., A.G. Edwards & Sons, Inc., Dain
Bosworth Incorporated and Piper Jaffray Inc. are acting as representatives
(the "Representatives"), of the above 7-7/8% Trust Originated Preferred
Securities (the "Preferred Securities"), of NSP Financing I, a Delaware
business trust (the "Trust").
Pursuant to Section 2 of the Purchase Agreement, the Trust and Northern
States Power Company (the "Company"), a Minnesota corporation, agree with
each Underwriter as follows:
1. The initial public offering price per security for the Preferred
Securities, determined as provided in said Section 2, shall be $25.00.
2. The purchase price per security for the Preferred Securities to be
paid by the several Underwriters shall be $25.00, being an amount equal to
the initial public offering price set forth above.
- ------------------------------
* (sm) "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co. Inc.
-30-
<PAGE>
3. The compensation per Preferred Security to be paid by the Company to
the several Underwriters in respect of their commitments hereunder shall be
$.7875; provided, however, that the compensation per Preferred Security for
Sales of 10,000 or more Preferred Securities to a single purchaser shall be
$.50.
If the foregoing agreement is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in
accordance with its terms.
Very truly yours,
NORTHERN STATES POWER COMPANY
By: /s/ Edward J. McIntyre
--------------------------------------
Name: Edward J. McIntyre
Title: Vice President and Chief
Financial Offier
NSP FINANCING I
By: /s/ Paul Pender
--------------------------------------
Name: Paul Pender
Title: Regular Trustee
By: /s/ Edward J. McIntyre
--------------------------------------
Name: Edward J. McIntyre
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Dain Bosworth Incorporated
Piper Jaffray Inc.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Maria Marta Falkinhoff
-----------------------------------
Authorized Signatory
For themselves and as the Representatives of the several Underwriters
named in the Purchase Agreement.
-31-
<PAGE>
EXHIBIT 4.02
- -------------------------------------------------------------------------------
NORTHERN STATES POWER COMPANY,
AS ISSUER
TO
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
AS TRUSTEE
---------------------
INDENTURE
SUBORDINATED DEBT SECURITIES
DATED AS OF JANUARY 30, 1997
- -------------------------------------------------------------------------------
<PAGE>
NORTHERN STATES POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF JANUARY 30, 1997
TRUST INDENTURE SECTION INDENTURE
ACT SECTION
Section 310(a)(1)..................................................609
(a)(2)..................................................609
(a)(3)..................................................Not
Applicable
(a)(4)..................................................Not
Applicable
(b).....................................................608, 610
Section 311(a).....................................................613
(b).....................................................613
Section 312(a).....................................................701, 702(a)
(b).....................................................702(b)
(c).....................................................702(c)
Section 313(a).....................................................703(a)
(b).....................................................Not
Applicable
(c).....................................................703(a)
(d).....................................................703(b)
Section 314(a).....................................................704
(b).....................................................Not
Applicable
(c)(1)..................................................102
(c)(2)..................................................102
(c)(3)..................................................Not
Applicable
(d).....................................................Not
Applicable
(e).....................................................102
Section 315(a).....................................................601(a)
(b).....................................................602
(c).....................................................601(b)
(d).....................................................601(c)
(d)(1)..................................................601(a)
(d)(2)..................................................601(c)
(d)(3)..................................................601(c)
(e).....................................................514
<PAGE>
Section 316(a)(1)(A)...............................................512
(a)(1)(B)...............................................502, 513
(a)(2)..................................................Not
Applicable
(b).....................................................508
Section 317(a)(1)..................................................503
(a)(2)..................................................504
(b).....................................................1009
Section 318(a).....................................................107
- -------------------------
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THIS INDENTURE.
<PAGE>
TABLE OF CONTENTS
PAGE
----
RECITALS OF THE COMPANY...................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.......1
SECTION 101...Definitions..................................................1
Act....................................................................2
Affiliate..............................................................2
Authenticating Agent...................................................2
Bankruptcy Law.........................................................2
Board of Directors.....................................................2
Board Resolution.......................................................2
Business Day...........................................................2
Capitalized Lease Obligation...........................................2
Capital Stock..........................................................2
Commission.............................................................2
Common Depositary......................................................3
Company................................................................3
Company Request or Company Order.......................................3
Corporate Trust Office.................................................3
Covenant Defeasance....................................................3
Custodian..............................................................3
Default................................................................3
Defaulted Interest.....................................................3
Defeasance.............................................................3
Dollars and $..........................................................3
Event of Default.......................................................3
Exchange Act...........................................................3
GAAP...................................................................3
Holder or Securityholder...............................................3
Indebtedness...........................................................3
Indenture..............................................................4
Interest...............................................................4
Interest Payment Date..................................................4
Lien...................................................................4
Maturity...............................................................4
Officer................................................................4
Officer's Certificate..................................................5
Opinion of Counsel.....................................................5
Original Issue Discount Security.......................................5
i
<PAGE>
Outstanding............................................................5
Paying Agent...........................................................6
Person.................................................................6
Place of Payment.......................................................6
Redemption Date........................................................6
Redemption Price.......................................................6
Registered Security....................................................6
Regular Record Date....................................................6
Responsible Officer....................................................6
Securities.............................................................6
Security Register and Security Registrar...............................6
Senior Indebtedness....................................................6
Significant Subsidiary.................................................7
Special Record Date....................................................7
Stated Maturity........................................................7
Subsidiary.............................................................7
Trust Indenture Act....................................................7
Trustee................................................................7
U.S. Depositary........................................................7
U.S. Government Obligations............................................8
Utility................................................................8
Vice President.........................................................8
SECTION 102...Compliance Certificates and Opinions.........................8
SECTION 103...Form of Documents Delivered to Trustee.......................9
SECTION 104...Acts of Holders..............................................9
SECTION 105...Notices, Etc., to Trustee and Company.......................10
SECTION 106...Notice to Holders; Waiver...................................11
SECTION 107...Conflict with Trust Indenture Act...........................11
SECTION 108...Effect of Headings and Table of Contents....................11
SECTION 109...Successors and Assigns......................................12
SECTION 110...Separability Clause.........................................12
SECTION 111...Benefits of Indenture.......................................12
SECTION 112...Governing Law...............................................12
SECTION 113...Legal Holidays..............................................12
SECTION 114...No Recourse Against Others..................................12
ARTICLE TWO SECURITY FORMS................................................13
SECTION 201...Forms Generally.............................................13
SECTION 202...Form of Face of Security....................................13
SECTION 203...Form of Reverse of Security.................................15
SECTION 204...Form of Trustee's Certificate of Authentication.............21
SECTION 205...Securities in Global Form...................................21
SECTION 206...CUSIP Number................................................22
SECTION 207...Form of Legend for the Securities in Global Form............22
ii
<PAGE>
ARTICLE THREE THE SECURITIES.............................................22
SECTION 301...Amount Unlimited; Issuable in Series........................22
SECTION 302...Denominations...............................................24
SECTION 303...Execution, Authentication, Delivery and Dating..............25
SECTION 304...Temporary Securities........................................26
SECTION 305...Registration, Registration of Transfer and Exchange.........27
SECTION 306...Mutilated, Destroyed, Lost and Stolen Securities............29
SECTION 307...Payment of Interest; Interest Rights Preserved..............30
SECTION 308...Persons Deemed Owners.......................................31
SECTION 309...Cancellation................................................31
SECTION 310...Computation of Interest.....................................32
ARTICLE FOUR SATISFACTION AND DISCHARGE..................................32
SECTION 401...Satisfaction and Discharge of Indenture.....................32
SECTION 402...Application of Trust Money..................................33
ARTICLE FIVE REMEDIES....................................................33
SECTION 501...Events of Default...........................................33
SECTION 502...Acceleration of Maturity; Rescission and Annulment..........35
SECTION 503...Collection of Indebtedness and Suits for Enforcement
by Trustee..................................................36
SECTION 504...Trustee May File Proofs of Claim............................37
SECTION 505...Trustee May Enforce Claims With Possession of Securities....37
SECTION 506...Application of Money Collected..............................38
SECTION 507...Limitation on Suits.........................................38
SECTION 508...Unconditional Right of Holders to Receive Principal,
Premium and Interest........................................39
SECTION 509...Restoration of Rights and Remedies..........................39
SECTION 510...Rights and Remedies Cumulative..............................39
SECTION 511...Delay or Omission Not Waiver................................39
SECTION 512...Control by Holders..........................................40
SECTION 513...Waiver of Past Defaults.....................................40
SECTION 514...Undertaking for Costs.......................................40
ARTICLE SIX THE TRUSTEE..................................................41
SECTION 601...Certain Duties and Responsibilities of the Trustee..........41
SECTION 602...Notice of Defaults..........................................41
SECTION 603...Certain Rights of Trustee...................................41
SECTION 604...Not Responsible for Recitals or Issuance of Securities......43
SECTION 605...May Hold Securities.........................................43
SECTION 606...Money Held in Trust.........................................43
SECTION 607...Compensation and Reimbursement..............................43
SECTION 608...Disqualification; Conflicting Interests.....................44
iii
<PAGE>
SECTION 609...Corporate Trustee Required; Eligibility.....................44
SECTION 610...Resignation and Removal; Appointment of Successor...........44
SECTION 611...Acceptance of Appointment by Successor......................46
SECTION 612...Merger, Conversion, Consolidation or Succession
to Business.................................................47
SECTION 613...Preferential Collection of Claims Against Company...........47
SECTION 614...Appointment of Authenticating Agent.........................47
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..........50
SECTION 701...Company to Furnish Trustee Names and Addresses
of Holders..................................................50
SECTION 702...Preservation of Information; Communications to Holders......50
SECTION 703...Reports by Trustee..........................................51
SECTION 704...Reports by Company..........................................51
ARTICLE EIGHT CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER.............52
SECTION 801...When Company May Merge, Etc.................................52
SECTION 802...Opinion of Counsel..........................................53
SECTION 803...Successor Corporation Substituted...........................53
ARTICLE NINE SUPPLEMENTAL INDENTURES.....................................54
SECTION 901...Supplemental Indentures With Consent of Holders.............54
SECTION 902...Supplemental Indentures with Consent of Holders.............55
SECTION 903...Execution of Supplemental Indentures........................56
SECTION 904...Effect of Supplemental Indentures...........................56
SECTION 905...Conformity with Trust Indenture Act.........................56
SECTION 906...Reference in Securities to Supplemental Indentures..........56
ARTICLE TEN COVENANTS....................................................57
SECTION 1001..Payments of Securities......................................57
SECTION 1002..Maintenance of Office or Agency.............................57
SECTION 1003..Payment of Taxes and Other Claims...........................58
SECTION 1004..Compliance Certificates.....................................58
SECTION 1005..Commission Reports..........................................59
SECTION 1006..Waiver of Stay, Extension or Usury Laws.....................60
SECTION 1007..Money for Securities Payments to Be Held in Trust...........60
ARTICLE ELEVEN REDEMPTION OF SECURITIES..................................61
SECTION 1101..Applicability of Article....................................61
SECTION 1102..Election to Redeem; Notice to Trustee.......................62
iv
<PAGE>
SECTION 1103..Selection by Trustee of Securities to Be Redeemed...........62
SECTION 1104..Notice of Redemption........................................62
SECTION 1105..Deposit of Redemption Price.................................63
SECTION 1106..Securities Payable on Redemption Date.......................63
SECTION 1107..Securities Redeemed in Part.................................64
ARTICLE TWELVE SINKING FUNDS.............................................64
SECTION 1201..Applicability of Article....................................64
SECTION 1202..Satisfaction of Sinking Fund Payments with Securities.......65
SECTION 1203..Redemption of Securities for Sinking Fund...................65
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE......................65
SECTION 1301..Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance....................65
SECTION 1302..Defeasance and Discharge....................................66
SECTION 1303..Covenant Defeasance.........................................66
SECTION 1304..Conditions to Defeasance or Covenant Defeasance.............66
SECTION 1305..Deposited Money and Government Obligations To Be Held
In Trust....................................................68
ARTICLE FOURTEEN SUBORDINATION...........................................69
SECTION 1401..Agreement of Securityholders that Securities
Subordinated to Extent Provide..............................69
SECTION 1402..Company not to Make Payments with Respect to
Securities in Certain Circumstances.........................69
SECTION 1403..Securities Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or
Reorganization of Company...................................70
SECTION 1404..Securityholders to be Subrogated to Right of Holders
of Senior Indebtedness......................................71
SECTION 1405..Obligation of the Company Unconditional.....................71
SECTION 1406..Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice........................................71
SECTION 1407..Application by Trustee of Monies Deposited With It..........72
SECTION 1408..Subordination Rights not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness......72
SECTION 1409..Securityholders Authorize Trustee to Effectuate
Subordination of Securities................................72
SECTION 1410..Right of Trustee to Hold Senior Indebtedness................73
SECTION 1411..Article Fourteen Not to Prevent Events of Default...........73
ARTICLE FIFTEEN MISCELLANEOUS............................................73
SECTION 1501..Miscellaneous...............................................73
v
<PAGE>
INDENTURE, dated as of January 30, 1997, between NORTHERN STATES POWER
COMPANY, a corporation duly organized and existing under the laws of the
State of Minnesota (herein called the "Company"), having its principal office
at 414 Nicollet Mall, Minneapolis, Minnesota 55401, and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as Trustee
(herein 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
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with 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
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(b) all 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;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the word "Including" (and with correlative meaning "Include") means
including, with limiting the generality of, any description preceding such
term; and
<PAGE>
(e) 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 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Securities.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company;
provided, however, that when the context refers to actions or resolutions of
the Board of Directors, then the term "Board of Directors" shall also mean
any duly authorized committee of the Board of Directors of the Company or
Officer authorized to act with respect to any particular matter to exercise
the power of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by
law or regulation to close.
"Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligation
shall be the capitalized amount of such obligations determined in accordance
with such principles.
"Capital Stock" of any Person shall mean any and all shares, interests,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any preferred stock, but excluding any debt
securities convertible into such equity.
"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
2
<PAGE>
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 Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Controller, an Assistant Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in Minneapolis,
Minnesota at which at any particular time its corporate trust business shall
be principally administered, which office at the date hereof is located at
Sixth and Marquette, Minneapolis, Minnesota 54479-0069.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.
"GAAP" means such accounting principles that are generally accepted in
the United States of America as of the date of any computation required
hereunder.
"Holder or Securityholder" means a Person in whose name a Security is
registered in the Security Register.
"Indebtedness" of any Person means, with duplication, (i) the principal
of and premium, if any, in respect of (A) indebtedness of such Person for
money borrowed and (B)
3
<PAGE>
indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable;
(ii) all Capitalized Lease Obligations of such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property,
all conditional sale obligations and all obligations under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit); (v) all obligations of the type
referred to in clauses (i) through (iv) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any Lien on any property or asset of such Person (whether
or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured.
"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 particular series of Securities established as
contemplated by Section 301.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, capitalized lease or other title
retention agreement).
"Maturity" when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Assistant Secretary of the Company.
4
<PAGE>
"Officer's Certificate" means a certificate signed by an officer and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably
acceptable to the Trustee.
"Original Issue 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 502.
"Outstanding," when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities which have been defeased pursuant to Section 1302;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (a) the
principal amount of an Original Issue Discount Security that shall be deemed
to be outstanding for such purposes shall be that portion of the principal
amount thereof that could be declared to be due and payable upon the
occurrence of an Event of Default and the continuation thereof pursuant to
the terms of such Original Issue Discount Security as of the date of such
determination and (b) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of 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 the Trustee knows to be so owned shall be so disregarded.
5
<PAGE>
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company may act as Paying Agent with respect to any
Securities issued hereunder.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if
any) and interest on the Securities of that series are payable as specified
as contemplated by Section 301.
"Redemption Date," when used with respect to any Security of any series
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 of any series
to be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Registered Security" means any Security issued hereunder and registered
in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee in its Corporate Trust Office and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means, with respect to the Company, Indebtedness of
the Company, except for (1) any such Indebtedness that is by its terms
subordinated to or pari passu with the Securities and (2) any Indebtedness
(including all other debt securities and guarantees in respect of those debt
securities) initially issued to any other trust, or a trustee of such trust,
6
<PAGE>
partnership or other entity affiliated with the Company that is, directly or
indirectly, a financing vehicle of the Company in connection with the
issuance by such entity of preferred securities or other similar securities.
"Significant Subsidiary" means a Subsidiary or Subsidiaries of the
Company possessing assets (including the assets of its own Subsidiaries but
without regard to the Company or any other Subsidiary) having a book value, in
the aggregate, equal to not less than 10% of the book value of the aggregate
assets of the Company and its Subsidiaries calculated on a consolidated basis.
"Special Record Date" for the payment of any Defaulted Interest means the
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
as in force at the date as of which this Indenture was executed; provided,
however, that in the event that such Act is amended after such date, "Trust
Indenture Act" means the Trust Indenture Act of 1939 as so amended.
"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.
"U.S. 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 permanent
global Securities, the Person designated as U.S. Depositary by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Exchange Act until a successor U.S. Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S. Depositary
hereunder, and if at any time there is more than one such Person, "U.S.
Depositary" shall mean the U.S. Depositary with respect to the Securities of
that series.
7
<PAGE>
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed by the
full faith and credit of the United States of America which, in either case,
are not callable or redeemable at the option of the issuer thereof or
otherwise subject to prepayment, and shall also include a depository receipt
issued by a New York Clearing House bank or trust company as custodian with
respect to any such U.S. Government obligation or a specific payment or
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt or
from any amount held by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
"Utility" shall mean any Subsidiary of the Company engaged in the
business of generating, transmitting or distributing electricity, or
distributing natural gas at retail.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, other than an action permitted
by Sections 205 and 704 hereof, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
8
<PAGE>
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which 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.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments 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
601) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
9
<PAGE>
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
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 the Trustee deems
sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is
made upon such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to a Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but
the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 105. 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,
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee and received by the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to
it at the address of its principal office specified in
10
<PAGE>
the first paragraph of this Indenture, attention: Secretary, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to Holders of
any event, such notice shall be deemed sufficiently given (unless otherwise
herein or in such Security expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of
such notice. In 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 or the validity of the proceedings to which such
notice relates. Where this Indenture or any Security 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.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the
country of publication.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
shall be excluded, as the case may be.
SECTION 108. 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.
11
<PAGE>
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall 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 111. 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
hereunder and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws (other than the choice of law provisions) of the
State of Minnesota.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day, or on such other day as may be set in an indenture
supplemental hereto or in the Officer's Certificate delivered pursuant to
Section 301, at such Place of Payment with the same force and effect as if
made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
SECTION 114. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder, by
accepting a Security, waives and releases all such liability. Such waivers
and releases are part of the consideration for the issuance of the Securities.
12
<PAGE>
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form 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 the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers executing such
Securities, as evidenced by their execution of the Securities. If the form
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 303 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
The definitive Securities shall be photocopied, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the Officers executing such Securities, as evidenced by
their execution of such Securities.
SECTION 202. Form of Face of Security.
[If the Security is an Original Issue Discount Security, insert--FOR
PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION
1273(a)(1) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-1(a) WITH RESPECT
TO THIS SECURITY IS ________, THE ISSUE PRICE (AS DEFINED IN TREASURY
REGULATION SECTION 1.1273-2) OF THIS SECURITY IS _________, THE ISSUE DATE (AS
DEFINED IN SECTION 1275(a)(2) OF THE CODE AND TREASURY REGULATION SECTION
1.1273-2) OF THIS SECURITY IS __________ AND THE YIELD TO MATURITY OF THIS
SECURITY IS __________.]
NORTHERN STATES POWER COMPANY
(a Minnesota corporation)
.............................
No. ___________ [$ ] ________
NORTHERN STATES POWER COMPANY, a corporation duly organized and existing
under the laws of Minnesota (herein called the "Company," which term includes
any successor
13
<PAGE>
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ____________, or registered assigns, the principal
sum of ______________ [Dollars] on ____________ [If the Security is to bear
interest prior to Maturity, insert--, and to pay interest thereon
from ____________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, [semi-annually]
[quarterly][monthly] on ____ and ____ in each year, commencing
__________________ at the rate of __________% per annum, until the principal
hereof is paid or made available for payment. [If applicable insert--, and (to
the extent that the payment of such interest shall be legally enforceable) at
the rate of _________% per annum on any overdue principal and premium and on
any overdue installment of interest]. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ___________
of __________ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ______% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date
of such default in payment to the date payment of such principal has been made
or duly provided for. Interest on any overdue principal shall be payable on
demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ______% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert--any such] interest on this Security will be made at the office or agency
of the Company maintained for that purpose in Minneapolis, Minnesota, in Dollars
[if applicable, insert--; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
14
<PAGE>
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.
NORTHERN STATES POWER COMPANY
By:___________________________________
Attest:
_______________________________ (SEAL)
SECTION 203. 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 in one or more
series under an Indenture, dated as of January 30, 1997 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, 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 Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof [, limited in aggregate
principal amount to $_________].
[If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 nor more than 45 days' notice by first class
mail, [if applicable, insert--(l) on ________ in any year commencing with the
year ______ and ending with the year ______ through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [on or after __________, _________], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount):
If redeemed [on or before __________, _____%, and if redeemed] during the
12-month period beginning __________ of the years indicated,
15
<PAGE>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 45 days' notice by first class
mail, (1) on __________ in any year commencing with the year __________ and
ending with the year _______ through operation of the sinking fund for this
series at the Redemption Prices for redemption through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [on or after __________], as a whole or in part, at
the election of the Company, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below:
If redeemed during a 12-month period beginning __________ of the years
indicated.
Redemption Price
For Redemption Redemption Price for
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to _% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued and unpaid interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to _____, redeem
any Securities of this series as contemplated by [clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than ___% per annum.]
[The sinking fund for this series provides for the redemption on ________
in each year beginning with the year _____ and ending with the year ________ of
[not less than] $__________ [("mandatory sinking fund") and not more than
$__________] aggregate principal amount of Securities of this series.]
[Securities of this series acquired or redeemed by the
16
<PAGE>
Company otherwise than through [mandatory] sinking fund payments may be
credited against subsequent [mandatory] sinking fund payments otherwise
required to be made-- in the [inverse] order in which they become due.]
[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 the Security is not an Original Issue Discount Security, insert -If any
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.] [If
the Security is an Original Issue Discount Security, insert -If an Event of
Default with respect to Securities of this series shall occur and be continuing,
an amount of principal of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the Indenture. Such
amount shall be equal to--insert formula for determining the amount.] Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal 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 the Securities of this series shall terminate.
This Security is a general unsecured obligation of the Company and will be
subordinate in right of payment to all existing and future Senior Indebtedness
of the Company.
[This Security is subject to Defeasance as described in the Indenture.]
The Indenture may be modified by the Company and the Trustee without consent
of any Holder with respect to certain matters as described in the Indenture.
In addition, the Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority 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 bind such Holder and 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.
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.
17
<PAGE>
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if any)
and interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security 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 Stated Maturity and aggregate
principal amount, will be issued to the designated transferee or transferees.
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 this series of a different authorized denomination, as
requested by the Holder surrendering the same.
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 Indenture imposes certain limitations on the ability of the Company to,
among other things, merge or consolidate with any other Person or sell, assign,
transfer or lease all or substantially all of its properties or assets [If other
covenants are applicable pursuant to the provisions of Section 301, insert
here]. All such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under this Security or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder, by accepting a Security, waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.
[If applicable, insert -- Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures ("CUSIP"), the Company
has caused CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No representation
is made as to the correctness or accuracy of such
18
<PAGE>
numbers as printed on the Securities of this series and reliance may be
placed only on the other identification numbers printed hereon.]
All capitalized terms used in this Security with definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
19
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
______________________________________________________________________
(Insert assignee's social security or tax I.D. number)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: ________________________ Your Signature:_________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guaranty:___________________________________________________
[Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Transfer Agent,
which requirements will include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Transfer Agent in addition to, or in
substitution for, STAMP, all in accordance with the Exchange
Act.]
Social Security Number or Taxpayer Identification
Number: __________________________________________
20
<PAGE>
SECTION 204. Form of Trustee's Certificate of Authentication.
Dated:__________________
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
______________________________________
As Trustee
By ___________________________________
Authorized Signatory
SECTION 205. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated by
Section 301, then, notwithstanding the provisions of Section 302, any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby
may from time to time be reduced to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made in
such manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section
303 and, if applicable, Section 304, the Trustee shall deliver and redeliver
any Security in permanent global form in the manner and upon instructions
given by the Person or Persons specified therein or in the applicable Company
Order. If a Company Order pursuant to Section 303 or 304 has been, or
simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be
in writing but need not comply with Section 102 and need not be accompanied
by an Opinion of Counsel.
The provisions of Section 309 shall apply to any Security represented by
a Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 102
and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Securities represented thereby.
Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of, premium,
if any, and interest on any Security in permanent global form shall be made
to the Person or Persons specified therein.
21
<PAGE>
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a permanent global Security as
shall be specified in a written statement of the Holder of such permanent
global Security.
SECTION 206. CUSIP Number
The Company in issuing Securities of any series may use a "CUSIP" number,
and, if so, the Trustee may use the CUSIP number in notices of redemption or
exchange as a convenience to Holders of such series; provided, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed on the notice or on the Securities of such
series, 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 will promptly notify the
Trustee of any change in the CUSIP number of any series of Securities.
SECTION 207. Form of Legend for the Securities in Global Form.
Any Security in global form authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Common Depositary
or a U.S. Depositary. Unless and until it is exchanged in whole or in part
for Securities in certificated form, this Security may not be transferred
except as a whole by the Common Depositary or a U.S. Depositary or by a
nominee of the Common Depositary or a nominee of the U.S. Depositary as the
case may be."
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution, and set forth
in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
22
<PAGE>
(2) any limit upon the aggregate principal amount of the Securities
of the 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 Sections 304, 305, 306, 906 or 1107);
(3) whether any Securities of the series are to be issuable in
permanent global form with or with coupons and, if so, (i) whether
beneficial owners of interests in any such permanent global Security may
exchange such interests for Securities of such series and of like tenor of
any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section
305, and (ii) the name of the Common Depositary (as defined in Section 304)
or the U.S. Depositary, as the case may be, with respect to any global
Security;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on any Interest
Payment Date and, if applicable to such series of Securities, the basis
points and United States Treasury rate(s) and any other rates to be used in
calculating the reset rate;
(6) the place or places where the principal of (and premium, if any)
and interest on Securities of the series shall be payable;
(7) the right of the Company, if any, to defer any payment of
principal of or interest on the Securities of the series, and the maximum
length of any such deferral period;
(8) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company, pursuant to
any sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation, and, where applicable, the
obligation of the Company to select the Securities to be redeemed;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
23
<PAGE>
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(12) additional Events of Default with respect to Securities of the
series, if any, other than those set forth herein;
(13) if either or both of Section 1302 and Section 1303 shall be
inapplicable to the Securities of the series (provided that if no such
inapplicability shall be specified, then both Section 1302 and Section 1303
shall be applicable to the Securities of the series);
(14) if other than U.S. dollars, the currency or currencies or units
based on or related to currencies in which the Securities of such series
shall be denominated and in which payments of principal of, and any premium
and interest on, such Securities shall or may be payable; provided,
however, that prior to the issuance of any such Securities, the Company
shall have obtained the written consent of the Trustee, which consent may
be withheld in the sole discretion of the Trustee, to the currency,
currencies or currency units so established;
(15) additional covenants with respect to Securities of the series, if
any, other than those set forth herein;
(16) if other than the Trustee, the identity of the Registrar and any
Paying Agent; and
(17) any other terms of the 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 in or pursuant to such
Board Resolution and set forth in such Officer's Certificate or in any such
Indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
24
<PAGE>
SECTION 303. 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 thereon
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. The seal of
the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical and
other minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
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 such Securities available for
delivery. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Sections 315(a)
through (d) of the Trust Indenture Act) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture;
(c) 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, except
to the extent enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law); and
(d) that no consent, approval, authorization, order, registration or
qualification of or with any court or any governmental agency or body having
jurisdiction over the Company is
25
<PAGE>
required for the execution and delivery of such Securities by the Company,
except such as have been obtained (except that no opinion need be expressed
as to state securities or Blue Sky laws).
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, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 301 and of the immediately
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 Officer's
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to the immediately preceding
paragraph at or prior to the time of 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.
If the Company shall establish pursuant to Section 301 that the Securities
of a series are to be issued in the form of one or more global Securities, then
the Company shall execute and the Trustee shall, in accordance with this Section
and the Company Order with respect to the authentication and delivery of such
series, authenticate and deliver one or more global Securities that (i) shall be
in an aggregate amount equal to the aggregate principal amount specified in such
Company Order, (ii) shall be registered in the name of the Common Depositary or
U.S. Depositary, as the case may be, therefor or its nominee, and (iii) shall be
made available for delivery by the Trustee to such depositary or pursuant to
such depositary's instruction.
Each depositary designated pursuant to Section 301 must, at the time of its
designation and at all times while it serves as depositary, be a clearing agency
registered under the Exchange Act and any other applicable statute or
regulation.
Unless otherwise provided for in the form of Security, 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 manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise
26
<PAGE>
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities 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.
In the case of Securities of any series, such temporary Securities may be
in global form, representing all or a portion of the Outstanding Securities of
such series.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of Section 305), if temporary
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared with unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities
of such series shall be exchangeable for definitive Securities of such series
upon surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment for that series, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor. 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.
If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be
delivered to the office of a depositary or common depositary (the "Common
Depositary") for credit to the respective accounts of the beneficial owners
of such Securities (or to such other accounts as they may direct).
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of registration of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency of the Company in Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and Stated Maturity, upon surrender of the
Securities to be exchanged at such office or
27
<PAGE>
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Security are entitled to exchange such
interests for Securities of such series and of like tenor and principal
amount of another authorized form and denomination, as specified and as
subject to the conditions contemplated by Section 301, then without unnecessary
delay but in any event not later than the earliest date on which such
interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in aggregate principal amount equal to
the principal amount of such permanent global Security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such permanent global Securities shall be surrendered from time to
time by the Common Depositary or the U.S. Depositary, as the case may be, and
in accordance with instructions given to the Trustee and the Common
Depositary or the U.S. Depositary, as the case may be (which instructions
shall be in writing but need not comply with Section 102 or be accompanied by
an opinion of Counsel), as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to
be exchanged, in whole or in part, for definitive Securities of the same
series without charge. The Trustee shall authenticate and make available for
delivery, in exchange for each portion of such surrendered permanent global
Security, a like aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such permanent global Security to be exchanged which shall be in the form of
the Securities of such series; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities of that series
selected for redemption under Section 1103 and ending at the close of
business on the day of such mailing. Promptly following any such exchange in
part, such permanent global Security shall be returned by the Trustee to the
Common Depositary or the U.S. Depositary, as the case may be, or such other
Common Depositary or U.S. Depositary referred to above in accordance with the
written instructions of the Company referred to above. If a Security in the
form specified for such series is issued in exchange for any portion of a
permanent global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, such interest or Defaulted Interest
will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Security in the form
specified for such series, but will be payable on such Interest Payment Date
or proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of 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 registration of transfer or exchange.
28
<PAGE>
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or exchanged,
no service charge shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption
of Securities of that series selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption
in whole or in part, except the unredeemed portion of any Security being
redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (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 and any agent of either 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 series and of like tenor and principal
amount 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 the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the
29
<PAGE>
Company, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities
of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the 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 (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 of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit 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 Section 307 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
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
30
<PAGE>
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Section 307, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a 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 such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) 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.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of a beneficial ownership
interest of a Security in global form, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
Notwithstanding the foregoing, with respect to any Security in global form,
nothing herein shall prevent the Company or the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by any Common Depositary (or its nominee),
as a Holder, with respect to such Security in global form or impair, as
between such Common Depositary and owners of beneficial interests in such
Security in global form, the operation of customary practices governing the
exercise of the right of such Common Depositary (or its nominee) as holder of
such Security in global form.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled 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 cancelled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities shall be held by the
31
<PAGE>
Trustee and may be destroyed (and, if so destroyed, certification of their
destruction shall be delivered to the Company if requested in writing to do
so, unless, by a Company Order, the Company shall direct that cancelled
Securities be returned to it).
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for or in the form of Security for such series), when the
Trustee, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 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 1007) 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, 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 (i), (ii) or (iii) above, has deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and
32
<PAGE>
premium, if any) and 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 Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
herein 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 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1007 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1007, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, 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 for whose payment such money has been deposited with or
received by the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to 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 to
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) the Company defaults in the payment of interest on any Security of
that series when such interest becomes due and payable and the default
continues for a period of 30 days; provided, however that if the Company is
permitted by the terms of the Securities of the applicable series to defer
the payment in question, the date on which such payment is due and payable
shall be the date on which the Company is required to make payment following
such deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
33
<PAGE>
(2) the Company defaults in the payment of the principal of (or premium,
if any, on) any Security of that series when the same becomes due and payable
at Maturity, upon redemption (including redemptions under Article Eleven), or
otherwise; provided, however, that if the Company is permitted by the terms
of the Securities of the applicable series to defer the payment in question,
the date on which such payment is due and payable shall be the date on which
the Company is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Securities; or
(3) the Company fails to observe or perform any of its other covenants,
warranties or agreements in the Securities of that series or this Indenture
(other than a covenant, agreement or warranty a default in whose performance
or whose breach is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit of one
or more series of Securities other than that series), and the failure to
observe or perform continues for the period and after the notice specified in
the last paragraph of this Section; or
(4) the Company defaults in the payment of any Indebtedness at the
maturity or acceleration thereof (after giving effect to any applicable grace
period) or upon the acceleration thereof as a result of such Indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise become due and payable, and such default in payment is not
cured or such acceleration shall not be rescinded or annulled within 10 days
after written notice to the Company from the Trustee or to the Company and to
the Trustee from the Holders of at least 10% in aggregate principal amount of
the Securities of that series at the time outstanding; provided that it shall
not be an Event of Default if the principal amount of Indebtedness (other
than Indebtedness represented by Securities issued pursuant to this
Indenture) which is not paid at maturity or the maturity of which is
accelerated is less than the amount equal to 1% of the Company's consolidated
total assets (determined as of its most recent fiscal year-end); provided
further that if, prior to a declaration of acceleration of the maturity of
the Securities of that series or the entry of judgment in favor of the
Trustee in a suit pursuant to Section 503, such default shall be remedied or
cured by the Company or waived by the holders of such Indebtedness, then the
Event of Default hereunder by reason thereof shall be deemed likewise to have
been thereupon remedied, cured or waived without further action upon the part of
either the Trustee or any of the Holders of the Securities of that series,
and provided further, that, subject to Sections 601 and 602, the Trustee
shall not be charged with knowledge of any such default unless written notice
of such default shall have been given to the Trustee by the Company, by a
holder or an agent of a holder of any such Indebtedness, by the trustee then
acting under any indenture or other instrument under which such default shall
have occurred, or by the Holders of at least five percent in aggregate
principal amount of the Securities of that series at the time outstanding; or
(5) the Company pursuant to or within the meaning of any Bankruptcy Law
(A) commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or order
for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to or acquiesces in the institution of
bankruptcy or insolvency proceedings against it, (D) applies for, consents to
or acquiesces in the appointment of or taking possession by a Custodian of
the Company or for any material part of
34
<PAGE>
its property, (E) makes a general assignment for the benefit of its creditors
or (F) takes any corporate action in furtherance of or to facilitate,
conditionally or otherwise, any of the foregoing; or
(6) (i) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any Bankruptcy Law which shall (A) approve as properly filed
a petition seeking reorganization, arrangement, adjustment or composition in
respect of the Company, (B) appoint a Custodian of the Company or for any
material part of its property or (C) order the winding-up or liquidation of
its affairs, and such judgment, decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (ii) any bankruptcy or
insolvency petition or application is filed, or any bankruptcy or insolvency
proceeding is commenced against the Company and such petition, application or
proceeding is not dismissed within 60 days; or (iii) a warrant of attachment
is issued against any material portion of the property of the Company which
is not released within 60 days of service; or
(7) any other Event of Default provided with respect to Securities of that
series.
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." When a Default under clause (3) above is
cured within such 60-day period, it ceases.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series (other
than an Event of Default specified in clause (5) or (6) of Section 501)
occurs and is continuing, the Trustee by notice in writing to the Company, or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by notice in writing to the Company and the
Trustee, may declare the unpaid principal of and accrued interest to the date
of acceleration (or, if the Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) on all the Outstanding Securities of that series
to be due and payable immediately and, upon any such declaration, the
Outstanding Securities of that series (or specified principal amount) shall
become and be immediately due and payable.
If an Event of Default specified in clause (5) or (6) of Section 501
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or specified principal amount) shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder of any Security of that series.
35
<PAGE>
Upon payment of all such principal and interest, all of the Company's
obligations under the Securities of that series and (upon payment of the
Securities of all series) this Indenture shall terminate, except obligations
under Section 607.
The Holders of a majority in principal amount of the Outstanding Securities
of that series by notice to the Trustee may rescind an acceleration and its
consequences if (i) all existing Events of Default, other than the nonpayment
of the principal and interest of the Securities of that series that has
become due solely by such declaration of acceleration, have been cured or
waived, (ii) to the extent the payment of such interest is lawful, interest
on overdue installments of interest and overdue principal that has become due
otherwise than by such declaration of acceleration have been paid, (iii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iv) all payments due to the Trustee and any
predecessor Trustee under Section 607 have been made.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security of any
series 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 (or premium, if any,
on) any Security of any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the
extent that payment of such interest shall be legally enforceable, interest
on any overdue principal (and premium, if any) and on any overdue interest,
at the rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the reasonable
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
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, may
prosecute such proceeding to judgment or final decree and may enforce the
same against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the manner provided
by law of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series 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
36
<PAGE>
of any covenant or agreement in this Indenture or in aid of the exercise of
any power granted herein, or to secure any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such judicial
proceedings, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. 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 with the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
37
<PAGE>
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in respect of
the Securities of any series shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities in respect of which moneys have been collected
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 607
applicable to such series;
Second: To the payment of the amounts then due and unpaid for principal of
(and premium, if any) and interest on the Securities of such series in respect
of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities of such series for principal (and premium, if any)
and interest, respectively; and
Third: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 506. At least fifteen (15) days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and the amount to be paid.
SECTION 507. Limitation on Suits.
No Holder of any Security 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 or trustee, 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
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 indemnity has failed to institute any such proceeding; and
38
<PAGE>
(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 Holders of Securities of
any series shall have any right in any manner whatever by virtue of, or by
availing himself of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all Holders of Securities of the affected series.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or 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 rights shall
not be impaired with the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or
39
<PAGE>
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. 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 Section 601, the Trustee need not take any action which
might involve the Trustee in personal liability or be unduly prejudicial to the
Holders not joining therein.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may by written notice to the Trustee on
behalf of the Holders of all the Securities of such series waive any Default
or Event of Default with respect to such series and its consequences, except
a Default or Event of Default
(1) in respect of the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or other provision hereof which under Article
Nine cannot be modified or amended with the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such Default or Event of Default shall cease to exist
and shall be deemed to have been cured, for every purpose of this Indenture and
the Securities of such series; but no such waiver shall extend to any subsequent
or other Default or Event of Default or impair any right consequent thereon.
SECTION 514. 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 any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such
40
<PAGE>
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by
the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
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 on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default, the Trustee's
duties and responsibilities under this Indenture shall be governed by Section
315(a) of the Trust Indenture Act.
(b) In case an Event of Default has occurred and is continuing, and is
known to the Trustee, the Trustee shall exercise the rights and powers vested in
it by this Indenture, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) None of the provisions of Section 315(d) of the Trust Indenture Act
shall be excluded from this Indenture.
SECTION 602. Notice of Defaults.
Within 30 days after the occurrence of any Default or Event of Default
with respect to the Securities of any series, the Trustee shall give to all
Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such Default or Event of Default known to
the Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any) or interest
on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee or directors or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders of Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
41
<PAGE>
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, 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) 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 may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity to its reasonable satisfaction against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default which may have occurred, 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, approval or other paper or document, or the books and records of the
Company, unless requested in writing to do so by the Holders of a majority in
principal amount of the Outstanding Securities of any series; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is not, in the opinion of the Trustee, reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding; the reasonable expense of every
such investigation shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be required 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
42
<PAGE>
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
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
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder (including amounts held by the
Trustee as Paying Agent) 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 upon in writing
with the Company.
SECTION 607. 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 (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
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability, damage, claim or expense, including taxes (other than
taxes based upon or determined or measured by the income of the Trustee),
incurred without gross negligence
43
<PAGE>
or bad faith on its part, arising of or in connection with the acceptance
or administration of the trust or trusts 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.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section 607 shall survive this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act. Nothing shall prevent
the Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under Section 310(a)(1) of the Trust Indenture Act 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 said 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. Neither the Company nor any Person directly or
indirectly controlling, controlled by, or under common control with the Company
may serve as Trustee. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court
44
<PAGE>
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act 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 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder of a Security who has been a bona fide Holder of a Security
for at least six months; 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 by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, 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 or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company with respect to such Securities. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of
a Security of such series for at least six months may,
45
<PAGE>
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 611. 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 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,
46
<PAGE>
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 such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
the Trust Indenture Act.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain outstanding 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, and subject to
the direction of, the Trustee to authenticate Securities of such series
issued upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall
47
<PAGE>
at all times be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision
or examination by federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any
time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. 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 provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
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 alternate
certificate of authentication in the following form:
Form of Authenticating Agent's
Certificate of Authentication
48
<PAGE>
Dated: ____________________
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
______________________________________
As Trustee
By ___________________________________
As Authenticating Agent
By ___________________________________
Authorized Signatory
49
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. 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 later than January 1 and July 1 in each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of the preceding December 15 or June 15, as the
case may be; and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a); or
(ii) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), and as to the approximate
cost of mailing to such Holders the form of proxy or other communication,
if any, specified in such application.
50
<PAGE>
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appears in the information
preserved at the time by the Trustee in accordance with Section 702(a) a copy
of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the
best interests of the Holders or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more
of such objections, the Commission shall find, after notice and opportunity
for hearing, that all objections so sustained have been met and shall enter
an order so declaring, the Trustee shall mail copies of such material to all
such Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(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 any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1997, the Trustee shall transmit by mail to all Holders of Securities as
provided in Section 313(c) of the Trust Indenture Act, a brief report dated as
of May 15, if required by and in compliance with Section 313(a) 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 Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and
51
<PAGE>
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Exchange Act; or, if the Company is not required
to file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and addresses appear
in the Security Register, (a) concurrently with furnishing the same to its
stockholders but only to the extent the Company is otherwise required to
furnish an annual report to its stockholders, the Company's annual report to
stockholders, containing certified financial statements, and any other
financial reports which the Company generally furnishes to its stockholders,
and (b) within 30 days after the filing thereof with the Trustee, such
summaries of any other information, documents and reports required to be
filed by the Company pursuant to paragraphs (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission; and
(4) furnish to the Trustee, on or before May 1 of each year, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or requirement of notice provided under this
Indenture. Such certificate need not comply with Section 102.
ARTICLE EIGHT
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 801. When Company May Merge, Etc.
The Company shall not consolidate with, or merge with or into any other
corporation (whether or not the Company shall be the surviving corporation), or
sell, assign, transfer or lease all or substantially all of its properties and
assets as an entirety or substantially as an entirety to any Person or group of
affiliated Persons, in one transaction or a series of related transactions,
unless:
52
<PAGE>
(1) either the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or with which or into
which the Company is merged or the Person (or group of affiliated Persons) to
which all or substantially all the properties and assets of the Company as an
entirety or substantially as an entirety are sold, assigned, transferred or
leased shall be a corporation (or constitute corporations) organized and
existing under the laws of the United States of America or any State thereof
or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture; and
(2) immediately before and after giving effect to such transaction or
series of related transactions, no Event of Default, and no Default, shall
have occurred and be continuing;
provided, however, that nothing contained in this Section 801 or elsewhere in
this Indenture shall be deemed to restrict or prohibit the Company from
consummating the transactions contemplated by the Merger Agreement dated
April 28, 1995, as amended as of July 26, 1995 among the Company, Wisconsin
Energy Corporation, Northern Power Wisconsin Corp. and WEC Sub Corp. and
provided further that the consummation of such transactions shall not require
an Officer's Certificate or Opinion of Counsel otherwise required by Section
802.
SECTION 802. Opinion of Counsel.
The Company shall deliver to the Trustee prior to the proposed
transactions covered by Section 801 an Officer's Certificate and an Opinion
of Counsel stating that the transaction(s) and such supplemental indenture
comply with this Indenture and that all conditions precedent to the
consummation of the transaction(s) under this Indenture have been met.
SECTION 803. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company into
any other corporation or any lease, sale, assignment, or transfer of all or
substantially all of the property and assets of the Company in accordance
with Section 801, the successor corporation formed by such consolidation or
into which the Company is merged or the successor corporation or affiliated
group of corporations to which such lease, sale, assignment, or transfer 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 corporation or corporations had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor
corporation or corporations shall be relieved of all obligations and
covenants under this Indenture and the Securities and in the event of such
conveyance or transfer, except in the case of a lease, any such predecessor
corporation may be dissolved and liquidated.
53
<PAGE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without notice to or 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 corporation to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) 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
(3) to add any additional Events of Default with respect to all or any
series of Securities; or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons; or
(5) 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
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; 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 611(b); or
(9) to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision herein which may be inconsistent with any other
provision herein; or
54
<PAGE>
(10) to make any change that does not materially adversely affect the
interests of the Holders of Securities of any series.
Upon request of the Company, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in (and subject to the last sentence of)
Section 903, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the written consent of the Holders of 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 shall, subject
to Section 903, 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, with the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof or extend the time for payment thereof,
or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration
of the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any
premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(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
Defaults or Events of Default hereunder and their consequences provided for
in this Indenture; or
(3) change the redemption provisions (including Article Eleven)
hereof in a manner adverse to such Holder; or
(4) modify any of the provisions of this Section or Section 513,
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 Outstanding
55
<PAGE>
Security affected thereby; provided, however, that this clause shall not
be deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section,
or the deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article, subject to the last sentence of this Section 903. 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 601) shall be fully protected in relying upon, an Officer's Certificate
and an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. 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 905. 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 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to
56
<PAGE>
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payments of Securities.
With respect to each series of Securities, the Company will duly and
punctually pay the principal of (and premium, if any) and interest on such
Securities in accordance with their terms and this Indenture, and will duly
comply with all the other terms, agreements and conditions contained in, or
made in the Indenture for the benefit of, the Securities of such series.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency in each Place of Payment
where Securities may be surrendered for registration of transfer or exchange
or for presentation for payment, where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and
any change in location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee as
set forth in Section 105 hereof.
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 such purposes and may from time to time rescind such designations.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
Indenture supplemental hereto with respect to a series of Securities, the
Company hereby initially designates the office of Norwest Bank Minnesota,
National Association, Sixth and Marquette, Minneapolis, Minnesota 54479-0069,
as such office of the Company.
57
<PAGE>
SECTION 1003. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a material lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which adequate provision has
been made.
SECTION 1004. Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90 days after the end
of each fiscal year of the Company (which fiscal year currently ends on December
31), an Officer's Certificate stating whether or not the signer knows of any
Default or Event of Default by the Company that occurred prior to the end of the
fiscal year and is then continuing. If the signer
58
<PAGE>
does know of such a Default or Event of Default, the certificate shall
describe each such Default or Event of Default and its status and the
specific section or sections of this Indenture in connection with which such
Default or Event of Default has occurred. The Company shall also promptly
notify the Trustee in writing should the Company's fiscal year be changed so
that the end thereof is on any date other than the date on which the
Company's fiscal year currently ends. The certificate need not comply with
Section 102 hereof.
(b) The Company shall deliver to the Trustee, within 10 days after the
occurrence thereof, notice of any acceleration which with the giving of
notice and the lapse of time would be an Event of Default within the meaning
of Section 501(4) hereof.
(c) The Company shall deliver to the Trustee forthwith upon becoming aware
of a Default or Event of Default (but in no event later than 10 days after the
occurrence of each Default or Event of Default that is continuing), an Officer's
Certificate setting forth the details of such Default or Event of Default and
the action that the Company proposes to take with respect thereto and the
specific section or sections of this Indenture in connection with which such
Default or Event of Default has occurred.
SECTION 1005. Commission Reports.
(a) The Company shall file with the Trustee, within 30 days after it files
them with the Commission, copies of the quarterly and annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Company is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. If the Company is not subject to the requirement of
such Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Trustee, within 30 days after it would have been required to file such
information with the Commission, financial statements, including any notes
thereto and, with respect to annual reports, an auditors' report by an
accounting firm of established national reputation and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations," both
comparable to that which the Company would have been required to include in such
annual reports, information, documents or other reports if the Company had been
subject to the requirements of such Sections 13 or 15(d) of the Exchange Act.
The Company also shall comply with the other provisions of Section 314(a) of the
Trust Indenture Act.
(b) So long as the Securities remain outstanding, the Company shall cause
its annual report to stockholders and any other financial reports furnished
by it to stockholders generally, to be mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Security
Registrar in each case at the time of such mailing or furnishing to
stockholders. If the Company is not required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause its financial statements, including any notes thereto and, with respect
to annual reports, an auditors' report by an accounting firm of established
national reputation and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," to be so filed with the Trustee and
mailed to the Holders within 90 days
59
<PAGE>
after the end of each of the Company's fiscal years and within 45 days after
the end of each of the first three quarters of each fiscal year.
(c) The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Company may
be required to deliver to the Holders under this Section 1007.
SECTION 1006. Waiver of Stay, Extension or Usury 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, and will actively resist any and all efforts to be compelled to take
the benefit or advantage of, any stay or extension law or any usury law or
other law, which would prohibit or forgive the Company from paying all or any
portion of the principal of and/or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company 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.
SECTION 1007. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of
that 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 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 action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure to so act.
The Company will cause each Paying Agent for any series of Securities
(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 on Securities of that series 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;
60
<PAGE>
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
that series; and
(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.
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 on any Security of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and 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 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 of 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 New York, 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.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
61
<PAGE>
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such 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 or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officer's Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, substantially pro rata, by
lot or by any other method as the Trustee considers fair and appropriate and
that complies with the requirements of the principal national securities
exchange, if any, on which such Securities are listed, and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof)
of the principal amount of Securities of such series of a denomination larger
than the minimum authorized denomination for Securities of that series;
provided that in case the Securities of such series have different terms and
maturities, the Securities to be redeemed shall be selected by the Company
and the Company shall give notice thereof to the Trustee.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities
selected for partial redemption, 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 the Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 45 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
62
<PAGE>
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the case;
(7) the CUSIP number, if any, of the Securities to be redeemed; and
(8) unless otherwise provided as to a particular series of Securities, if
at the time of publication or mailing of any notice of redemption the Company
shall not have deposited with the Trustee or Paying Agent and/or irrevocably
directed the Trustee or Paying Agent to apply, from money held by it available
to be used for the redemption of Securities, an amount in cash sufficient to
redeem all of the Securities called for redemption, including accrued interest
to the Redemption Date, such notice shall state that it is subject to the
receipt of the redemption moneys by the Trustee or Paying Agent before the
Redemption Date (unless such redemption is mandatory) and such notice shall be
of no effect unless such moneys are so received before such date.
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.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1007) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the
63
<PAGE>
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on
or prior to the Redemption Date shall 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 Regular or Special Record Dates according
to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security with service charge, a new
Security or Securities of the same series and Stated Maturity, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "Mandatory Sinking
Fund Payment," and any payment in excess of such minimum amount provided for
by the terms of Securities of any series is herein referred to as an
"Optional Sinking Fund Payment." If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
64
<PAGE>
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Securities of a series (other than any
Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided for by the terms of
such series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment
for that series pursuant to the terms of that series, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in
Section 1103 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
1104. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1106 and
1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to Effect Defeasance
or Covenant Defeasance.
Unless pursuant to Section 301 provision is made for the inapplicability
of either or both of (a) Defeasance of the Securities of a series under
Section 1302 or (b) Covenant Defeasance of the Securities of a series under
Section 1303, then the provisions of such Section or Sections, as the case
may be, together with the other provisions of this Article, shall be
applicable to the Securities of such series, and the Company may at its
option by Board Resolution, at any time, with respect to the Securities of
such series, elect to have either Section 1302 (unless inapplicable) or
Section 1303 (unless inapplicable) be applied to the Outstanding Securities of
such series upon compliance with the applicable conditions set forth below in
this Article.
65
<PAGE>
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301 to
defease the Outstanding Securities of a particular series, the Company shall be
discharged from its obligations with respect to the Outstanding Securities of
such series on the date the applicable conditions set forth in Section 1304
are satisfied (hereinafter, "Defeasance"). Defeasance shall mean that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same); provided,
however, that the following rights, obligations, powers, trusts, duties and
immunities shall survive until otherwise terminated or discharged hereunder:
(A) the rights of Holders of Outstanding Securities of such series to receive,
solely from the trust fund provided for in Section 1304, payments in respect
of the principal of (and premium, if any) and interest on such Securities
when such payments are due, (B) the Company's obligations with respect to
such Securities under Sections 304, 305, 306, 1002 and 1007, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article. Subject to compliance with this Article, the Company may exercise
its option with respect to Defeasance under this Section 1302 notwithstanding
the prior exercise of its option with respect to Covenant Defeasance under
Section 1303 in regard to the Securities of such series.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301 to
obtain a Covenant Defeasance with respect to the Outstanding Securities of a
particular series, the Company shall be released from its obligations under
this Indenture (except its obligations under Sections 304, 305, 306, 506,
509, 610, 1001, 1002, 1004, 1006 and 1007) with respect to the Outstanding
Securities of such series on and after the date the applicable conditions set
forth in Section 1304 are satisfied (hereinafter, "Covenant Defeasance").
Covenant Defeasance shall mean that, with respect to the Outstanding Securities
of such series, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in this
Indenture (except its obligations under Sections 304, 305, 306, 506, 509,
610, 1001, 1002, 1004, 1006 and 1007), whether directly or indirectly by
reason of any reference elsewhere herein or by reason of any reference to any
other provision herein or in any other document, and such omission to comply
shall not constitute an Event of Default under Section 501(4) with respect to
Outstanding Securities of such series, and the remainder of this Indenture and
of the Securities of such series shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to Defeasance under Section 1302
and Covenant Defeasance under Section 1303 with respect to the Outstanding
Securities of a particular series:
(1) the Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section
609 who shall agree to comply with the
66
<PAGE>
provisions of this Article applicable to it), under the terms of an
irrevocable trust agreement in form and substance reasonably satisfactory to
such Trustee, as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities, (A) Dollars in an amount, or (B)
U.S. Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will provide,
not later than the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, after payment of all federal,
state and local taxes or other charges or assessments in respect thereof
payable by the Trustee, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium, if any, on) and each installment of principal of
(and premium, if any) and interest on the Outstanding Securities of such
series on the Stated Maturity of such principal or installment of principal
or interest and (ii) any mandatory sinking fund payments or analogous
payments applicable to the Outstanding Securities of such series on the day
on which such payments are due and payable in accordance with the terms of
this Indenture and of such Securities.
(2) No Default or Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit or shall occur as a result of such deposit, and no Default or Event
of Default under clause (5) or (6) of Section 501 hereof shall occur and be
continuing, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(3) Such deposit, Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it is
bound.
(4) Such Defeasance or Covenant Defeasance shall not cause any
Securities of such series then listed on any national securities exchange
registered under the Exchange Act to be delisted.
(5) In the case of an election with respect to Section 1302, the
Company shall have delivered to the Trustee either (A) a ruling directed to
the Trustee received from the Internal Revenue Service to the effect that
the Holders of the Outstanding Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Defeasance had not occurred or (B) an Opinion of Counsel, based on
such ruling or on a change in the applicable federal income tax law since
the date of this Indenture, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Defeasance had not
occurred.
67
<PAGE>
(6) In the case of an election with respect to Section 1303, the
Company shall have delivered to the Trustee an Opinion of Counsel or a
ruling directed to the Trustee received from the Internal Revenue Service
to the effect that the Holders of the Outstanding Securities of such series
will not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred.
(7) Such Defeasance or Covenant Defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may
be imposed on the Company in connection therewith pursuant to Section 301.
(8) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Defeasance under Section 1302
or the Covenant Defeasance under Section 1303 (as the case may be) have
been complied with.
SECTION 1305. Deposited Money and Government Obligations To Be Held In Trust.
Subject to the provisions of the last paragraph of Section 1007, all
money and Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively for purposes of
this Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities of a particular series shall be held in trust and
applied by the Trustee, in accordance with the provisions of such 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 Holders of such Securities of all sums due and to
become due thereon in respect of principal (and premium, if any) and
interest, but such money need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver to and pay to the Company from time to time upon Company
Request any money or Government Obligations held by it as provided in Section
1304 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, are in excess of the amount thereof which would then be required
to be deposited for the purpose for which such money or Government
Obligations were deposited.
68
<PAGE>
ARTICLE FOURTEEN
SUBORDINATION
SECTION 1401. Agreement of Securityholders that Securities Subordinated to
Extent Provided.
The Company, for itself, its successors and assigns, covenants and agrees
and each Holder of the Securities by his acceptance thereof likewise covenants
and agrees that the payment of the principal of, premium, if any, and interest
on each and all of the Securities is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full of
all Senior Indebtedness. The provisions of this Article shall constitute a
continuing offer to all persons who, in reliance upon such provisions, become
holders of, or continue to hold, Senior Indebtedness, and such provisions are
made for the benefit of the holders of Senior Indebtedness, and such holders are
hereby made obligees hereunder the same as if their names were written herein as
such, and they and/or each of them may proceed to enforce such provisions.
SECTION 1402. Company not to Make Payments with Respect to Securities in
Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all principal thereof and premium, if any, and
interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holder or holders of such
Senior Indebtedness, before any payment is made on account of the principal
of or premium, if any, or interest on the Securities or to acquire any of the
Securities or on account of any sinking fund (except sinking fund payments
made in Securities acquired by the Company before the maturity of such Senior
Indebtedness).
(b) Upon the happening of (i) an event of default with respect to any
Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, or (ii) an event which, with the giving of notice, or
lapse of time, or both, would constitute such an event of default, then,
unless and until such event shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with respect to the
principal of or premium, if any, or interest on the Securities or to acquire
any of the Securities or on account of any sinking fund for the Securities
(except sinking fund payments made in Securities acquired by the Company
before such default and notice thereof).
(c) In the event that notwithstanding the provisions of this Section
1402 the Company shall make any payment to the Trustee on account of the
principal of or premium, if any, or interest on the Securities, or on account
of any sinking fund, or the Holders of the Securities shall receive any such
payment, after the happening of a default in payment of the principal of or
premium, if any, or interest on Senior Indebtedness, then, unless and until
such default or event of default shall have been cured or waived or shall
have ceased to exist, such payment (subject to
69
<PAGE>
the provisions of Section 1406) shall be held by the Trustee or the Holders
of the Securities, as the case may be, in trust for the benefit of, and shall
be paid forthwith over and delivered to, the holders of Senior Indebtedness
(pro rata as to each of such holders on the basis of the respective amounts
of Senior Indebtedness held by them) or their representative or the trustee
under the indenture or other agreement (if any) pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with the terms of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness. The Company shall give prompt
written notice to the Trustee of any default under any Senior Indebtedness or
under any agreement pursuant to which Senior Indebtedness may have been
issued.
SECTION 1403. Securities Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of
Company.
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full of the principal thereof, premium, if any, and
interest due thereon before the Holders of the Securities are entitled to
receive any payment on account of the principal of, premium, if any, or
interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustees would be entitled except for the provisions of
this Article Fourteen, shall be paid by the liquidating trustee or agent or
other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or other trustee or agent,
directly to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment
or distribution or provision therefor to the holders of such Senior
Indebtedness;
(c) in the event that notwithstanding the foregoing provisions of this
Section 1403, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, shall be received
by the Trustee or the Holders of the Securities on account of principal,
premium, if any, or interest on the Securities before all Senior Indebtedness
is paid in full, or effective provision made for its payment, such payment or
distribution (subject to the provisions of Section 1406 and 1407) shall be
received and held in trust for and shall be paid over to the holders of the
Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, for
70
<PAGE>
application to the payment of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of
such Senior Indebtedness.
SECTION 1404. Securityholders to be Subrogated to Right of Holders of Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until all amounts owing on the
Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Indebtedness by or on
behalf of the Company or by or on behalf of the Holders of the Securities by
virtue of this Article which otherwise would have been made to the Holders of
the Securities shall, as between the Company and the Holders of the
Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article
Fourteen 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
the Senior Indebtedness, on the other hand.
SECTION 1405. Obligation of the Company Unconditional.
Nothing contained in this Article Fourteen or elsewhere in this Indenture
or in the Securities is intended to or shall impair as between the Company
and the Holders of the Securities, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of the Securities the
principal of, premium, if any, and interest on the Securities as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the
Securities and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article Fourteen of the holders of Senior Indebtedness in
respect of cash, property, or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article Fourteen, the Trustee, subject to the provisions
of Section 601, and the Holders of the Securities shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee or to the Holders of the Securities,
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article Fourteen.
SECTION 1406. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee, unless and until
71
<PAGE>
a Responsible Officer of the Trustee shall have received written notice
thereof from the Company or from one or more holders of Senior Indebtedness
or from any trustee therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601, shall be
entitled to assume conclusively that no such facts exist.
SECTION 1407. Application by Trustee of Monies Deposited With It.
Anything in this Indenture to the contrary notwithstanding, any deposit
of monies by the Company with the Trustee or any paying agent (whether or not
in trust) for the payment of the principal of or premium, if any, or interest
on any Securities shall be subject to the provisions of Sections 1401, 1402,
1403 and 1404 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of either the principal of or the interest or
premium, if any, on any Security) a Responsible Officer of the Trustee shall
not have received with respect to such monies the notice provided for in
Section 1406, then, anything herein contained to the contrary
notwithstanding, 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 on or after such date.
SECTION 1408. Subordination Rights not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof which any
such holder may have or be otherwise charged with.
SECTION 1409. Securityholders Authorize Trustee to Effectuate Subordination
of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Fourteen and appoints the Trustee his attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation
or reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of its or his
Securities in the form required in said proceedings and cause said claim to
be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration
of the time to file such claim or claims, then the holder or holders of
Senior Indebtedness are hereby authorized to and have the right to file an
appropriate claim for and on behalf of the holders of said Securities.
72
<PAGE>
SECTION 1410. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article Fourteen in respect of any Senior Indebtedness at any time held by it
to the same extent as any other holder of Senior Indebtedness, and nothing in
Section 613 or elsewhere in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
SECTION 1411. Article Fourteen Not to Prevent Events of Default.
The failure to make a payment on account of principal, interest or
sinking fund by reason of any provision in this Article Fourteen shall not be
construed as preventing the occurrence of an Event of Default under Section
501.
ARTICLE FIFTEEN
MISCELLANEOUS
SECTION 1501. Miscellaneous.
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.
73
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NORTHERN STATES POWER COMPANY
By /s/ Edward J. McIntyre
___________________________________
Name: Edward J. McIntyre
Title: Vice President and Chief
Financial Officer
Attest:
/s/ Gary R. Johnson
_____________________________
Name: Gary R. Johnson
Title: Vice President, General
Counsel and Corporate
Secretary
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By /s/ Raymond S. Haverstock
___________________________________
Name: Raymond S. Haverstock
Title: Vice President
74
<PAGE>
EXHIBIT 4.05
___________________________________________
PREFERRED SECURITIES GUARANTEE AGREEMENT
NSP Financing I
Dated as of January 31, 1997
___________________________________________
<PAGE>
EXHIBIT 4.05
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
ARTICLE I. DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. Definitions and Interpretation. . . . . . . . . . . . . . . . . .1
ARTICLE II. TRUST INDENTURE ACT. . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.1. Trust Indenture Act; Application. . . . . . . . . . . . . . . . .4
SECTION 2.2. Lists of Holders of Securities. . . . . . . . . . . . . . . . . .5
SECTION 2.3. Reports by the Preferred Guarantee Trustee. . . . . . . . . . . .5
SECTION 2.4. Periodic Reports to Preferred 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. . . . . . . . . . . . . . . . . . . . .6
SECTION 2.8. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF PREFERRED
GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee. . . . . . .6
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee . . . . . . . . . .8
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee . . . . . 10
ARTICLE IV. PREFERRED GUARANTEE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Preferred Guarantee Trustee; Eligibility. . . . . . . . . . . . 10
SECTION 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees. . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2. Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . 12
SECTION 5.3. Obligations Not Affected. . . . . . . . . . . . . . . . . . . . 12
SECTION 5.4. Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.5. Guarantee of Payment. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.7. Independent Obligations . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI. LIMITATION OF TRANSACTIONS; SUBORDINATION. . . . . . . . . . . . . . . 14
SECTION 6.1. Limitation of Transactions. . . . . . . . . . . . . . . . . . . 14
SECTION 6.2. Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VIII. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.1. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.1. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.2. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.4. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of January 31, 1997, is executed and delivered by Northern States Power
Company, a Minnesota corporation (the "Guarantor"), and Wilmington Trust
Company, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of NSP Financing I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of January 31, 1997, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof 8,000,000 preferred securities, having an
aggregate liquidation amount of $200,000,000, designated the 7 7/8% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
<PAGE>
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by
any applicable law to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities of
the Guarantor designated the 7 7/8% Junior Subordinated Debentures due
2037 held by the Institutional Trustee (as defined in the Declaration)
of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
-2-
<PAGE>
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price") to the extent the Issuer has
funds available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Issuer
shall have funds available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an event of
default under the Indenture has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common
Securities Guarantee Agreement are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents
of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of January 30, 1997, among the
Guarantor (the "Debenture Issuer") and Norwest Bank Minnesota, National
Association as trustee, and any indenture supplemental thereto pursuant to
which certain subordinated debt securities of the Debenture Issuer are to be
issued to the Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided
for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
-3-
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Person" means 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.
"Preferred Guarantee Trustee" means Wilmington Trust Company until a
Successor Preferred Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Preferred Securities Guarantee
and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Guarantee Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred 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 Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
-4-
<PAGE>
SECTION 2.2. Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List
of Holders") as of such date, (i) within 1 Business Day after January 1 and
June 30 of each year, and (ii) at any other time within 30 days of receipt by
the Guarantor of a written request for a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Preferred Guarantee
Trustee provided, that the Guarantor shall not be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Guarantee Trustee by the
Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders of the Preferred Securities 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
Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee 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 Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities,
waive any past Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event
-5-
<PAGE>
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7. Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice, provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or unless a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge thereof.
SECTION 2.8. Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee
shall automatically vest in any Successor Preferred Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
-6-
<PAGE>
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred 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 Preferred Securities Guarantee, and no implied covenants shall
be read into this Preferred Securities Guarantee against the Preferred
Guarantee Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Preferred Securities Guarantee, 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 Preferred Securities Guarantee shall be
construed to relieve the Preferred 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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
-7-
<PAGE>
(iii) the Preferred 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 Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred 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
Preferred 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 Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred 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 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
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee 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 Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel, and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted
-8-
<PAGE>
by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Preferred Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) 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 Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred 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 Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such
-9-
<PAGE>
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred 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 Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV.
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2 (c).
-10-
<PAGE>
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2. Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred 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
Preferred Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Preferred Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
-11-
<PAGE>
ARTICLE V.
GUARANTEE
SECTION 5.1. Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity
date of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities,
or any action on the part of the Issuer granting indulgence or extension of
any kind;
-12-
<PAGE>
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under
this Preferred Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person. Notwithstanding the foregoing, if the Guarantor has failed to make a
Guarantee Payment, a holder of Preferred Securities may directly institute a
proceeding against the Guarantor for enforcement of the Preferred Security
Guarantee for such payment.
SECTION 5.5. Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6. Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other
-13-
<PAGE>
agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are
due and unpaid under this Preferred Securities Guarantee. 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 Preferred Securities,
and that the Guarantor shall be liable as principal and as debtor hereunder
to make Guarantee Payments pursuant to the terms of this Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of its common stock in connection
with the satisfaction by the Guarantor of its obligations pursuant to any
contract or security requiring the Guarantor to purchase shares of its common
stock, (ii) as a result of a reclassification of its capital stock or the
exchange or conversion of one class or series of its capital stock for
another class or series of its capital stock, or (iii) the purchase of
fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or security being
converted or exchanged) or make any guarantee payment with respect thereto,
(b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Guarantor which rank pari passu with or
junior to the Debentures or (c) the Guarantor shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee Agreement).
SECTION 6.2. Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor except those liabilities
of the Guarantor made pari passu or subordinate by their terms, (ii) pari
passu with the most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter entered into
by the Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock.
-14-
<PAGE>
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination
This Preferred Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the
Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters
the Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Preferred Securities might
properly be paid.
SECTION 8.2. Indemnification
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against
any loss, damage or claim incurred by such Indemnified Person by reason of
any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that
no Indemnified Person shall
-15-
<PAGE>
be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of the Preferred Securities Guarantee.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2. Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect
to meetings of Holders of the Securities apply to the giving of such approval.
SECTION 9.3. Notices
All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
-16-
<PAGE>
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Northern States Power Company
414 Nicollet Mall
Minneapolis, Minnesota 55401
Attention: Edward J. McIntyre
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices 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 9.4. Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
-17-
<PAGE>
SECTION 9.5. Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA.
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NORTHERN STATES POWER COMPANY, as Guarantor
By: /s/ Edward J. McIntyre
________________________________________
Name: Edward J. McIntyre
Title: Vice President and Chief Financial
Officer
WILMINGTON TRUST COMPANY, as Preferred Guarantee
Trustee
By: /s/ Donald G. MacKelcan
________________________________________
Name: Donald G. MacKelcan
Title: Assistant Vice President
-18-
<PAGE>
EXHIBIT 4.10
________________________________________________
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
NSP FINANCING I
Dated as of January 31, 1997
________________________________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I. INTERPRETATION AND DEFINITIONS. . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. TRUST INDENTURE ACT. . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.1. Trust Indenture Act; Application. . . . . . . . . . . . . 7
SECTION 2.2. Lists of Holders of Securities. . . . . . . . . . . . . . 7
SECTION 2.3. Reports by the Institutional Trustee. . . . . . . . . . . 8
SECTION 2.4. Periodic Reports to Institutional Trustee . . . . . . . . 8
SECTION 2.5. Evidence of Compliance with Conditions Precedent. . . . . 8
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . 8
SECTION 2.7. Event of Default; Notice. . . . . . . . . . . . . . . . . 10
ARTICLE III. ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.1. Name. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.2. Office. . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.3. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.4. Authority . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.5. Title to Property of the Trust. . . . . . . . . . . . . . 12
SECTION 3.6. Powers and Duties of the Regular Trustees . . . . . . . . 12
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees. . . 14
SECTION 3.8. Powers and Duties of the Institutional Trustee. . . . . . 15
SECTION 3.9. Certain Duties and Responsibilities
of the Institutional Trustee. . . . . . . . . . . . . . . 17
SECTION 3.10. Certain Rights of Institutional Trustee . . . . . . . . . 18
SECTION 3.11. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.12. Execution of Documents. . . . . . . . . . . . . . . . . . 20
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities. . 21
SECTION 3.14. Duration of Trust . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.15. Mergers . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV. SPONSOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.1. Sponsor's Purchase of Common Securities . . . . . . . . . 23
SECTION 4.2. Responsibilities of the Sponsor . . . . . . . . . . . . . 23
ARTICLE V. TRUSTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.1. Number of Trustees. . . . . . . . . . . . . . . . . . . . 23
SECTION 5.2. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.3. Institutional Trustee; Eligibility. . . . . . . . . . . . 24
i
<PAGE>
SECTION 5.4. Certain Qualifications of Regular Trustees
and Delaware Trustee Generally . . . . . . . . . . . . . . 25
SECTION 5.5. Regular Trustees . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.6. Appointment, Removal and Resignation of Trustees . . . . . 26
SECTION 5.7. Vacancies among Trustees . . . . . . . . . . . . . . . . . 27
SECTION 5.8. Effect of Vacancies. . . . . . . . . . . . . . . . . . . . 27
SECTION 5.9. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.10. Delegation of Power. . . . . . . . . . . . . . . . . . . . 28
SECTION 5.11. Merger, Conversion, Consolidation
or Succession to Business. . . . . . . . . . . . . . . . . 28
ARTICLE VI. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.1. Distributions. . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VII. ISSUANCE OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.1. General Provisions Regarding Securities. . . . . . . . . . 29
SECTION 7.2. Paying Agent . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII. TERMINATION OF TRUST. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.1. Termination of Trust . . . . . . . . . . . . . . . . . . . 30
ARTICLE IX. TRANSFER OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9.1. Transfer of Securities . . . . . . . . . . . . . . . . . . 31
SECTION 9.2. Transfer of Certificates . . . . . . . . . . . . . . . . . 32
SECTION 9.3. Deemed Security Holders. . . . . . . . . . . . . . . . . . 32
SECTION 9.4. Book Entry Interests . . . . . . . . . . . . . . . . . . . 32
SECTION 9.5. Notices to Clearing Agency . . . . . . . . . . . . . . . . 33
SECTION 9.6. Appointment of Successor Clearing Agency . . . . . . . . . 33
SECTION 9.7. Definitive Preferred Security Certificates . . . . . . . . 33
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates. . . . . 34
ARTICLE X. LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES
OR OTHERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.1. Liability. . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.2. Exculpation. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.3. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.4. Indemnification. . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.5. Outside Businesses . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XI. ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 11.1. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 11.2. Certain Accounting Matters . . . . . . . . . . . . . . . . 39
ii
<PAGE>
SECTION 11.3. Banking. . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 11.4. Withholding. . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XII. AMENDMENTS AND MEETINGS. . . . . . . . . . . . . . . . . . . . . 41
SECTION 12.1. Amendments . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 12.2. Meetings of the Holders of Securities;
Action by Written Consent. . . . . . . . . . . . . . . . . 42
ARTICLE XIII. REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 13.1. Representations and Warranties of Institutional Trustee. . 44
SECTION 13.2. Representations and Warranties of Delaware Trustee . . . . 45
ARTICLE XIV. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 14.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 14.2. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 14.3. Intention of the Parties . . . . . . . . . . . . . . . . . 46
SECTION 14.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 14.5. Successors and Assigns . . . . . . . . . . . . . . . . . . 47
SECTION 14.6. Partial Enforceability . . . . . . . . . . . . . . . . . . 47
SECTION 14.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 47
ANNEX I TERMS OF SECURITIES . . . . . . . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE. . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . . A2-1
EXHIBIT B SPECIMEN OF DEBENTURE . . . . . . . . . . . . . . . . . B-1
EXHIBIT C PURCHASE AGREEMENT. . . . . . . . . . . . . . . . . . . C-1
iii
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- ------------
310 (a).......................................................... 5.3(a)
310 (c).......................................................... Inapplicable
311 (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 (f).......................................................... Inapplicable
315 (a).......................................................... 3.9(b)
315 (c).......................................................... 3.9(a)
315 (d).......................................................... 3.9(a)
316 (a).......................................................... Annex I
316 (c).......................................................... 3.6(e)
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NSP FINANCING I
January 31, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of January 31, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established NSP Financing I (the
"Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of December 23, 1996 (the "Original Declaration")
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on December 23, 1996, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain Debentures of the
Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I.
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
<PAGE>
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits
to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which banking institutions
in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for
the Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Time" and each "Date of Delivery" under
the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
2
<PAGE>
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated as
of January 31, 1997 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Preferred Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Northern States Power Company, a Minnesota
corporation in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means Norwest Bank Minnesota, National Association,
as trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being substantially in the form of
Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
3
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of January 30, 1997, among the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred
4
<PAGE>
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the 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 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.
"Paying Agent" has the meaning specified in Section 7.2.
"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.
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of January 31, 1997, of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
5
<PAGE>
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A- 1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer, and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Purchase Agreement" means the Purchase Agreement for the offering and sale
of Preferred Securities in the form of Exhibit C.
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Northern States Power Company, a Minnesota corporation, or
any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6 (a) (ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting
6
<PAGE>
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of
the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance
with the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Section 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses
7
<PAGE>
of the Holders of the Securities ("List of Holders") as of such record date,
provided that neither the Sponsor nor the Regular Trustees, on behalf of
the Trust, shall be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders
given to the Institutional Trustee by the Sponsor and the Regular Trustees
on behalf of the Trust, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request for a List of Holders as of a date
no more than 14 days before such List of Holders is given to the
Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity) provided that the Institutional Trustee
may destroy any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
Section 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities 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
Institutional Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide to the Institutional Trustee and the Holders such documents,
reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration 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.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
8
<PAGE>
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to
the Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver by
the Holders of the Preferred Securities of an Event of Default with respect
to the Preferred Securities shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Preferred Securities and only the
Holders of the Preferred Securities will have the
9
<PAGE>
right to direct the Institutional Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of Section 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by
the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default
with respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the
corresponding Event of Default under this Declaration with respect to the
Common Securities for all purposes of this Declaration without further act,
vote or consent of the Holders of the Common Securities. The foregoing
provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture
Act is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.7(a)
being hereby defined to be an Event of Default as defined in the Indenture,
not including any periods of grace provided for therein and irrespective of
the giving of any notice provided therein); provided that, except for a
default in the payment of principal of (or premium, if any) or interest on
any of the Debentures or in the payment of any sinking fund installment
established for the Debentures, the Institutional Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 501 and 503 of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
10
<PAGE>
ARTICLE III.
ORGANIZATION
SECTION 3.1. Name.
The Trust is named "NSP Financing I," as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders
of Securities. The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2. Office.
The address of the principal office of the Trust is c/o Northern States
Power Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401. On ten
Business Days' written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3. Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary, or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United
States federal income tax purposes as a grantor trust.
The Trust will be classified as a grantor trust for United States federal
income tax purposes under Subpart E of Subchapter J of the Code, pursuant to
which the owners of the Preferred Securities and the Common Securities will
be the owners of the Trust for United States federal income tax purposes, and
such owners will include directly in their gross income the income, gain,
deduction or loss of the Trust as if the Trust did not exist. By the
acceptance of this Trust, neither the Trustees, the Sponsor nor the owners of
the Preferred Securities or Common Securities will take any position for
United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.
SECTION 3.4. Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons
dealing with the Trust are entitled to rely conclusively on the power and
authority of the Trustees as set forth in this Declaration.
11
<PAGE>
SECTION 3.5. Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
Holders shall not have legal title to any part of the assets of the Trust,
but shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; provided, however, that the Trust may
issue no more than one series of Preferred Securities and no more than one
series of Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Preferred Securities;
(iv) execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Preferred Securities under Section
12(b) of the Exchange Act; and
(v) execute and enter into the Purchase Agreement and Pricing
Agreement providing for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title
12
<PAGE>
to the Debentures to be held of record in the name of the Institutional
Trustee for the benefit of the Holders of the Preferred Securities and the
Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee before
taking or refraining from taking any Ministerial Action in relation to a
Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) 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 3.8(e), the Institutional
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed
by any Regular Trustee;
(k) to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
13
<PAGE>
(o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders;
(p) 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 Regular Trustees, on behalf of the
Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
14
<PAGE>
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A) direct
the time, method and place of exercising any trust or power conferred upon
the Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures
shall be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an insubstantial
risk that for United States federal income tax purposes the Trust will not
be classified as a grantor trust.
SECTION 3.8. Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each
Person who may hereafter be appointed as Institutional Trustee in accordance
with Section 5.6. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Debentures have been
executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed in
accordance with this
15
<PAGE>
Declaration. The Institutional Trustee Account shall be an account that
is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating
assigned to the Preferred Securities by a "nationally recognized
statistical rating organization," as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the occurrence
of certain special events (as may be defined in the terms of the
Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this
Declaration or the Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Institutional Trustee occurs and
is continuing, the Institutional Trustee shall, for the benefit of
Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and
16
<PAGE>
the Institutional Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional 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 Declaration and no implied covenants
shall be read into this Declaration against the Institutional Trustee.
In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) of which a Responsible Officer of the
Institutional Trustee has actual knowledge, the Institutional Trustee
shall exercise such of the rights and powers vested in it by this
Declaration, 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 or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional 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 an 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 Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the Institutional
Trustee, the Institutional 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
Institutional Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional 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
17
<PAGE>
Institutional Trustee, or exercising any trust or power conferred
upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Institutional
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 it 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 Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional Trustee
Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional 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 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 Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
18
<PAGE>
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional 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 Sponsor or the Regular
Trustees;
(iv) the Institutional 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 registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Institutional Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) 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 Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to relieve the Institutional Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Institutional 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 Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
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;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional
19
<PAGE>
Trustee or its agents alone shall be sufficient and effective to perform
any such action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its compliance
with any of the terms and provisions of this Declaration, both of which
shall be conclusively evidenced by the Institutional Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the 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 conclusively
relying on or acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional 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 Institutional
Trustee shall be construed to be a duty.
SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, 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 Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
20
<PAGE>
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not
assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the
Trust or any part thereof. The Trustees make no representations as to
the validity or sufficiency of this Declaration or the Securities.
SECTION 3.14. Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for forty-five (45) years from the Closing Date.
SECTION 3.15. Mergers.
(a) The Trust may not 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 corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Securities, the Delaware
Trustee or the Institutional Trustee, consolidate, amalgamate, merge
with or into, or be replaced by a trust organized as such under the laws
of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with another organization on which
the Preferred Securities are then listed or quoted;
21
<PAGE>
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of such Holders' interests in the
Preferred Securities as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust 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 any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
22
<PAGE>
ARTICLE IV.
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2. Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage
in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by
the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the
Trust, as the Sponsor deems necessary or advisable in order to comply
with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE V.
TRUSTEES
SECTION 5.1. Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
23
<PAGE>
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders
of the Common Securities; provided, however, that, the number of Trustees
shall in no event be less than two (2); provided further that (1) one Trustee
meets the requirements of Section 5.2(a) or (b); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated with the
Sponsor (a "Regular Trustee"); and (3) one Trustee shall be the Institutional
Trustee for so long as this Declaration is required to qualify as an
indenture under the Trust Indenture Act, and such Trustee may also serve as
Delaware Trustee if it meets the applicable requirements.
SECTION 5.2. Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) 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 law, provided that, if the Institutional
Trustee has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, then the
Institutional Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
(c) The initial Delaware Trustee shall be:
Wilmington Trust Company, as Delaware Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
SECTION 5.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
24
<PAGE>
referred to above, then for the purposes of this Section 5.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of
the first provision contained in Section 310(b) of the Trust Indenture
Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company, as Institutional Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware 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 Authorized Officers.
SECTION 5.5. Regular Trustees.
The initial Regular Trustees shall be:
Edward J. McIntyre
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 554001
Paul Pender
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 554001
25
<PAGE>
(a) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one
such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that the
registration statement referred to in Section 3.6, including any
amendments thereto, shall be signed by a majority of the Regular
Trustees; and
(c) As more specifically provided in Section 5.10, a Regular
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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
26
<PAGE>
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or
the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the Sponsor and the
Trust of an instrument of resignation, the resigning Institutional
Trustee or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Institutional
Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Institutional Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Institutional Trustee
or Successor Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the
duties of a Trustee shall not operate to annul the
27
<PAGE>
Trust. Whenever a vacancy in the number of Regular Trustees shall
occur, until such vacancy is filled by the appointment of a Regular
Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the
Regular Trustees by this Declaration.
SECTION 5.9. Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time
and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy
by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier)
not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting.
The presence (whether in person or by telephone) of a Regular Trustee at
a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to
such matter, provided that a Quorum is present, or without a meeting by
the unanimous written consent of the Regular Trustees. In the event
there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10. Delegation of Power.
(a) Any Regular 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 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental
filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which
either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the institutional
28
<PAGE>
Trustee or the Delaware Trustee, as the case may be, shall be a party,
or any corporation succeeding to all or substantially all the corporate
trust business of the Institutional Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Institutional Trustee or
the Delaware Trustee, as the case may be, 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.
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and
the Common Securities in accordance with the preferences set forth in
their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined
in the Indenture) and Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the
Institutional Trustee (the amount of any such payment being a "Payment
Amount"), the Institutional Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue one
class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth
in Annex I (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in
the assets of the Trust other than the Preferred Securities and the
Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual signature of any
present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Securities shall cease to be
such Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Certificates had not ceased to be
such Regular Trustee; and any Certificate may be signed on behalf of the
Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the
date of the execution and delivery of the Declaration any such person
was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other
29
<PAGE>
marks of identification or designation and such legends or endorsements
as the Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation of any stock exchange
on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration.
SECTION 7.2. Paying Agent.
In the event that the Preferred Securities are not in book-entry
only form, the Trust shall maintain in the borough of Manhattan, City of
New York, State of New York, an office or agency where the Preferred
Securities may be presented for payment ("Payment Agent"), and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. The Trust may appoint the Paying Agent and may appoint one or more
additional paying agents in such other locations as it shall determine.
The term "Paying Agent" includes any additional paying agent. The Trust
may change any Paying Agent without prior notice to any Holder. The
Trust shall notify the Institutional Trustee of the name and address of
any Agent not a party to this Declaration. If the Trust fails to
appoint or maintain another entity as Paying Agent, the Institutional
Trustee shall act as such. The Trust or any of its Affiliates may act
as Paying Agent. The Trust shall initially act as Paying Agent for the
Preferred Securities and the Common Securities.
ARTICLE VIII.
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve in the earlier to occur of 45 years
after the issuance of the Debentures or:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the Sponsor's
charter and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
(iii) upon the consent of a majority of liquidation amount of the
Securities affected thereby voting together as a single class to dissolve
the Trust;
30
<PAGE>
(iv) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Securities;
(vi) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with
the terms of the Securities and all of the Debentures endorsed thereon
shall have been distributed to the Holders of Securities in exchange for
all of the Securities; or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding-up of the
Trust and payment of all liabilities of the Trust, the Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware and the Trust shall terminate.
(c) The provisions of Article X shall survive the
termination of the Trust.
ARTICLE IX.
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. Any transfer or purported transfer
of any Security not made in accordance with this Declaration shall be
null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of
the Sponsor; provided that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters
that such transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.
31
<PAGE>
SECTION 9.2. Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges
that may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or
more new Certificates to be issued in the name of the designated
transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall be canceled
by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder
hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have
agreed to be bound by this Declaration.
SECTION 9.3. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole
holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such Certificate or in
the Securities represented by such Certificate on the part of any
Person, whether or not the Trust shall have actual or other notice
thereof.
SECTION 9.4. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be
issued in the form of one or more, fully registered, global Preferred
Security Certificates (each a "Global Certificate"), to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Global Certificate(s) shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of DTC, and
no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificate(s), except as
provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial
Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificate(s) and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificate(s) and shall
have no obligation to the Preferred Security Beneficial Owners;
32
<PAGE>
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and the Clearing Agency shall receive and transmit payments
of Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants.
SECTION 9.5. Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred
Security Beneficial Owners pursuant to Section 9.7, the Regular Trustees
shall give all such notices and communications specified herein to be
given to the Preferred Security Holders to the Clearing Agency, and
shall have no notice obligations to the Preferred Security Beneficial
Owners.
SECTION 9.6. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the
Regular Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Preferred Securities.
SECTION 9.7. Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on,
33
<PAGE>
said instructions of the Clearing Agency. The Definitive Preferred
Security Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Preferred Securities may be listed, or to
conform to usage.
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any
Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the
Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Regular Trustees 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
Certificate issued pursuant to this Section shall constitute conclusive
evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
ARTICLE X.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. Liability.
(a) Except as expressly set forth in this Declaration, the
Debentures, the Securities Guarantees and the terms of the Securities,
the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
34
<PAGE>
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities 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.
SECTION 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of 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 the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (or ordinary negligence in the
case of the Institutional Trustee) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as
to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions
to Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or
to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to
the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the Institutional Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
35
<PAGE>
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices or
principles. In the absence of bad faith by the Indemnified Person, the
resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a
36
<PAGE>
party to any threatened, pending or completed action or suit by or
in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Sponsor in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Sponsor as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Regular Trustees by
a majority vote of a quorum of disinterested Regular Trustees, (ii) if such
a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
37
<PAGE>
Indemnified Person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor
or Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Sponsor
and each Company Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv) being referred
to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any loss, liability or expense
incurred
38
<PAGE>
without gross negligence (or, in the case of the Institutional Trustee,
pursuant to Section 3.9, negligence) or bad faith on its part, arising
out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 10.5. Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional 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 Securities shall have no rights by virtue of
this Declaration 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. No Covered Person, the Sponsor, the Delaware Trustee, or
the Institutional 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 any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional 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 Covered
Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or
any Affiliate of the Sponsor, or may act as depositary for, trustee or
agent for, or act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.
ARTICLE XI.
ACCOUNTING
SECTION 11.1. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on
the accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the
Trust by a firm of independent certified public accountants selected by
the Regular Trustees.
39
<PAGE>
(b) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States
federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each
Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the Trust.
(c) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the
Trust with any state or local taxing authority.
SECTION 11.3. Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments
of funds in respect of the Debentures held by the Institutional Trustee
shall be made directly to the Institutional Trustee Account and no other
funds of the Trust shall be deposited in the Institutional Trustee
Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee
shall designate the signatories for the Institutional Trustee Account.
SECTION 11.4. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and
forms as shall reasonably be requested by the Trust to assist it in
determining the extent of, and in fulfilling, its withholding
obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with
respect to the Holder to applicable jurisdictions. To the extent that
the Trust is required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to any Holder,
the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not
withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
40
<PAGE>
ARTICLE XII.
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended
by a written instrument approved and executed by:
(i) the Sponsor and the Regular Trustees (or, if there are more than
two Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Institutional Trustee, the Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have also first received an
opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
41
<PAGE>
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the
rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision of the Amended
Declaration to such extent as may be necessary, provided such modification,
elimination or addition would not adversely affect the rights, privileges
or preference of any Holder of the Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in
liquidation amount of
42
<PAGE>
such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more calls in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any
Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the
right to call a meeting and only those Securities specified shall be
counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders
of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any
43
<PAGE>
matter is to be voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XIII.
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor
Institutional Trustee's acceptance of its appointment as Institutional
Trustee that:
(a) the initial Institutional Trustee is a Delaware banking corporation
with trust powers, duly organized, validly existing and in good standing
under the laws of the State of Delaware, with trust power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration and any Successor Institutional Trustee satisfies
the requirements of Section 5.3(a) herein;
(b) the execution, delivery and performance by the Institutional Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents
44
<PAGE>
and warrants to the Trust and the Sponsor at the time of the Successor
Delaware Trustee's acceptance of its appointment as Delaware Trustee
that:
(a) The initial Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under the
laws of the State of Delaware, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration and any Successor Delaware Trustee satisfies the requirements of
Section 5.2 herein;
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors'
rights generally and to general principles of equity and the discretion
of the court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration; and
(d) The Delaware Trustee is 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.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
NSP Financing I
414 Nicollet Mall
Minneapolis, MN 55401
Attention: Edward J. McIntyre
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice
of to the Holders of the Securities):
45
<PAGE>
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Administration (or such other
address as the Institutional Trustee may give notice of to the Holders
of the Securities):
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 55401
Attention: Edward J. McIntyre
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices 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 14.2. Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
SECTION 14.3. Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to
further this intention of the parties.
SECTION 14.4. Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
46
<PAGE>
SECTION 14.5. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6. Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 14.7. Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of
the signature of each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read
as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.
47
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ Edward J. McIntyre
------------------------------------
Edward J. McIntyre, as Regular
Trustee
/s/ Paul Pender
------------------------------------
Paul Pender, as Regular
Trustee
Wilmington Trust Company,
as Delaware Trustee and
Institutional Trustee
By: /s/ Donald G. MacKelcan
--------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice
President
Northern States Power Company,
as Sponsor
By: /s/ Edward J. McIntyre
--------------------------------
Name: Edward J. McIntyre
Title: Vice President and
Chief Financial
Officer
48
<PAGE>
ANNEX I
TERMS OF
7 7/8% TRUST ORIGINATED PREFERRED SECURITIES
7 7/8% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of January 31, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and
the Common Securities are set out below (each capitalized term used but not
defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. 8,000,000 Preferred Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust
of two hundred million dollars ($200,000,000) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are hereby
designated for the purposes of identification only as "7 7/8% Trust
Originated Preferred SecuritiesSM ('TOPrS'SM)" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall
be substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Preferred Securities are listed.
(b) Common Securities. 247,600 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of six
million one hundred ninety thousand dollars ($6,190,000) and a liquidation
amount with respect to the assets of the Trust of $25 per common security,
are hereby designated for the purposes of identification only as "7 7/8% Trust
Originated Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom
or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 7 7/8% (the "Coupon Rate") of the stated liquidation amount of $25
per Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional
I-1
<PAGE>
Trustee has funds available therefor. The amount of Distributions payable
for any period will be computed for any full quarterly Distribution period on
the basis of a 360-day year of twelve 30-day months, and for any period
shorter than a full quarterly Distribution period for which Distributions are
computed, Distributions will be computed on the basis of the actual number of
days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from January 31, 1997, and will be payable quarterly in arrears, on March 31,
June 30, September 30, and December 31 of each year, commencing on March 31,
1997, except as otherwise described below. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the date of maturity of
the Debentures. As a consequence of such deferral, Distributions will also
be deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture Issuer may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
20 consecutive quarters. Payments of accrued Distributions will be payable
to Holders as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book-entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred
Securities will be made as described under the heading "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the Prospectus Supplement dated January 28, 1997, to the
Prospectus dated January 14, 1997 (together, the "Prospectus"), of the Trust
included in the Registration Statement on Form S-3 of the Sponsor, the Trust
and certain other business trusts. The relevant record dates for the Common
Securities shall be the same record date as for the Preferred Securities. If
the Preferred Securities shall not continue to remain in book-entry only
form, the relevant record dates for the Preferred Securities shall conform to
the rules of any securities exchange on which the securities are listed and,
if none, shall be selected by the Regular Trustees, which dates shall be at
least one Business Day but less than 60 Business Days before the relevant
payment dates, which payment dates correspond to the interest payment dates
on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures, will
cease to be payable to the Person in whose name such Securities are
registered on the relevant record date, and such defaulted Distribution will
instead be payable to
I-2
<PAGE>
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If
any date on which Distributions are payable on the Securities is not a
Business Day, then 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 of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled
to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection
with such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Securities, with an interest rate equal to the Coupon Rate of, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Securities, shall be distributed on a Pro Rata basis
to the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, 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 the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption (either at the option of the Debenture Issuer
or pursuant to a Special Event as described below), the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so repaid or redeemed at a redemption price of $25
per Security plus an amount equal to accrued and unpaid Distributions thereon
at the date of the redemption, payable in cash (the "Redemption Price").
Holders will be given not less than 30 nor more than 60 days' notice of such
redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata
and the Preferred Securities to be redeemed will be as described in Section
4(f)(ii) below.
I-3
<PAGE>
(c) If a Tax Event or an Investment Company Event (each as defined
below, and each a "Special Event") shall occur and be continuing, the Regular
Trustees shall, except in certain limited circumstances in relation to a Tax
Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Institutional
Trustee, having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interests in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90 Day Period"); provided, however,
that, in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in
such matters (a "No Recognition Opinion"), which opinion may rely on
published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the
Trust and the distribution of Debentures, and provided, further, that, if at
the time there is available to the Trust the opportunity to eliminate, within
the 90 Day Period, the Tax Event by taking some ministerial action, such
as filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities ("Ministerial Action"),
the Trust will pursue such Ministerial Action in lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax Event Opinion
(as defined hereinafter) by the Regular Trustees, the Debenture Issuer has
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a
Tax Event, there is more than an insubstantial risk that the Debenture Issuer
would be precluded from deducting the interest on the Debentures for United
States federal income tax purposes even if the Debentures were distributed to
the Holders of Securities in liquidation of such Holders' interests in the
Trust as described in this Section 4(c), or (ii) the Regular Trustees
shall have been informed by such tax counsel that a No Recognition Opinion
cannot be delivered to the Trust, the Debenture Issuer shall have the right
at any time, upon not less than 30 nor more than 60 days' notice, to redeem
the Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at the time
there is available to the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or
the Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in
such matters (a "Tax Event Opinion") to the effect that on or after the date
of the Prospectus Supplement, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any
I-4
<PAGE>
regulations thereunder) of the United States or any political subdivision or
taxing authority therefor or therein, or (b) any amendment to or
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after the date of the Prospectus Supplement, there
is more than an insubstantial risk that (i) the Trust is or will be within 90
days of the date thereof, subject to United States federal income tax with
respect to interest accrued or received on the Debentures, (ii) the Trust is,
or will be within 90 days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges, or (iii)
interest payable by the Debenture Issuer to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible, in whole
or in part, by the Debenture Issuer for United States federal income tax
purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") 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 (a "Change in 1940 Act Law"), there is a more than an
insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be registered under the Investment Company Act,
which Change in 1940 Act Law becomes effective on or after the date of the
Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any distribution
of Debentures and dissolution of the Trust: (i) the Securities will no longer
be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Debentures to
be delivered upon such distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred Securities held by
the Depository or its nominee (or any successor Clearing Agency or its
nominee), will be deemed to represent beneficial interests in the Debentures
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer
or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities
for all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
I-5
<PAGE>
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect
to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee) or any nominee, the distribution of the proceeds of such
redemption will be made to each Clearing Agency Participant (or Person on
whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with the Depository or its
nominee (or successor Clearing Agency or its nominee) funds sufficient to
pay the applicable Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the Holders
of such Securities by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the redemption date. If
a Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as applicable,
distributions will cease to accrue on the Securities
I-6
<PAGE>
so called for redemption and all rights of Holders of such Securities so
called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any
Securities that have been so called for redemption. If any date fixed for
redemption of Securities 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 fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not paid
either by the Institutional Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue from the original redemption date to
the actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holder thereof,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror
is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities,
voting separately as a class may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including (i) directing the time, method,
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or exercising any trust or power conferred on the Debenture Trustee
with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided, however, that, where
a consent under the Indenture would require the consent or act of the Holders
of greater than a majority of the Holders in principal amount of Debentures
affected
I-7
<PAGE>
thereby (a "Super Majority"), the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at
least the proportion in liquidation amount of the Preferred Securities which
the relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding. The Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method
and place of conducting any remedy available to the Institutional Trustee or
the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Institutional Trustee
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other
than a grantor trust on account of such action. If a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a Holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder on or after the respective due date specified in
the Debentures. Notwithstanding any payments made to such Holder by the
Debenture Issuer in connection with such proceeding, the Debenture Issuer
shall remain obligated to pay the principal of or interest on the Debentures
held by the Trust or the Institutional Trustee, and the Debenture Issuer
shall by subrogated to the rights of the Holders of Preferred Securities with
respect to payments on the Preferred Securities to the extent of any payments
made by the Debenture Issuer to such Holder in any such proceeding. Except as
provided in the second preceding sentence, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available
to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Preferred Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
I-8
<PAGE>
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and as otherwise
required by law and the Declaration, the Holders of the Common Securities
will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event
of Default with respect to the Preferred Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee, or exercising any trust or power conferred upon
the Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past default
and its consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable, provided that, where a
consent or action under the Indenture would require the consent or act of the
Holders of greater than a majority in principal amount of Debentures affected
thereby (a "Super Majority"), the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at
least the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Pursuant to this Section 6(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a
vote of the Holders of the Preferred Securities. Other than with respect to
directing the time, method and place of conducting any remedy available to
the Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Common Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to
the effect that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on account of such
action.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description
I-9
<PAGE>
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities
as a class, will be entitled to vote on such amendment or proposal (but not
on any other 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 Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or only the
Common Securities, then only the affected 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 a Majority in liquidation amount of such
class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder
of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures,
the Institutional Trustee shall request the written direction of the Holders
of the Securities with respect to such amendment, modification or termination
and shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where a consent under the
Indenture would require the consent of the holders of greater than a majority
in aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless
the Institutional Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust on account of such
action.
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate
I-10
<PAGE>
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default under the Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Preferred Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities
held by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
I-11
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security 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) 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, New York) to the
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 since the
registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. 629384 20 7
Certificate Evidencing Preferred Securities
of
NSP FINANCING I
7 7/8% Trust Originated Preferred Securities(SM) ("TOPrS"(SM))
(liquidation amount $25 per Preferred Security)
NSP FINANCING I, a statutory business trust formed 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 undivided beneficial interests in the assets of the Trust
designated the 7 7/8% Trust Originated Preferred Securities(SM) (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. The designation,
rights, privileges, restrictions, preferences and other terms and provisions
of the Preferred Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of January 31, 1997, as
A1-1
<PAGE>
the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Preferred Securities as set forth in Annex I
to the Declaration. Capitalized terms used herein but not defined shall have
the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 7 7/8% (the "Coupon Rate") of the stated liquidation amount
of $25 per Preferred Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law).
The term "Distributions" as used herein includes such cash distributions and
any such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held
by the Institutional Trustee and to the extent the Institutional Trustee has
funds available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 90-day quarter.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing on March 31, 1997, to Holders of
record one (1) Business Day prior to such payment dates, which payment dates
shall correspond to the interest payment dates on the Debentures; provided
however, that if the Preferred Securities are not then in book-entry only
form, such Distributions shall be paid to the Holders of record fifteen (15)
days prior to such payment dates. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") and, as a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; provided that such Extension Period together with all such previous
and further extensions thereof may not exceed 20 consecutive quarters.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the end
of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of __________, 199__.
NSP FINANCING I
By:
------------------------------------
Name:
Title: Regular Trustee
A1-2
<PAGE>
_______________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate 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)
A1-3
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the Debenture Issuer
and any Related Party to the Debenture Issuer or a Related Party of the
Debenture Issuer; provided that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that
such transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NSP FINANCING I
7 7/8% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
NSP FINANCING I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that __________ (the
"Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 7 7/8% Trust Originated Common Securities (liquidation amount
$25 per Common Security) (the "Common Securities"). The Common 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. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject
to the provisions of the Amended and Restated Declaration of Trust of the
Trust dated as of January 31, 1997, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Common Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its principal
place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
A2-1
<PAGE>
Distributions payable on each Common Security will be fixed at a rate
per annum of 7 7/8% (the "Coupon Rate") of the stated liquidation amount of
$25 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at
the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 90-day quarter.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing on March 31, 1997, to Holders of
record one (1) Business Day prior to such payment dates, which payment dates
shall correspond to the interest payment dates on the Debentures; provided,
however, that if the Preferred Securities are not then in book-entry only
form, such distributions shall be paid to the Holders of record fifteen (15)
days prior to such payment dates. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") and, as a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; provided that such Extension Period together with all such previous
and further extensions thereof may not exceed 20 consecutive quarters.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the end
of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day
of __________, 199__.
NSP FINANCING I
By:_____________________________
Name:
Title: Regular Trustee
A2-2
<PAGE>
_______________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert assignee's social security or tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________________________________________________
______________________________________________________________________________
____________________________________________________________________ agent
to transfer this Common 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 Common Security
Certificate)
A2-3
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
C-1
<PAGE>
EXHIBIT 4-12
- -------------------------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of January 31, 1997
between
NORTHERN STATES POWER COMPANY,
AS ISSUER
and
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
AS TRUSTEE
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definition of Terms.. . . . . . . . . . . . . . . . . . . 2
ARTICLE II. GENERAL TERMS AND CONDITIONS OF THE DEBENTURES . . . . . . . . . 3
SECTION 2.1. Designation and Principal Amount. . . . . . . . . . . . . 3
SECTION 2.2. Maturity. . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.3. Form and Payment . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.4. Global Debenture. . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.5. Interest. . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.6. Preferred Security Holders' Rights . . . . . . . . . . . 5
ARTICLE III. REDEMPTION OF THE DEBENTURES. . . . . . . . . . . . . . . . . . 6
SECTION 3.1. Tax Event Redemption. . . . . . . . . . . . . . . . . . . 6
SECTION 3.2. Optional Redemption by Company. . . . . . . . . . . . . . 6
SECTION 3.3. No Sinking Fund . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . . . . . 7
SECTION 4.1. Extension of Interest Payment Period. . . . . . . . . . . 7
SECTION 4.2. Notice of Extension . . . . . . . . . . . . . . . . . . . 8
SECTION 4.3. Limitation of Transactions. . . . . . . . . . . . . . . . 8
ARTICLE V. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5.1. Payment of Expenses . . . . . . . . . . . . . . . . . . . 9
SECTION 5.2. Payment Upon Resignation or Removal . . . . . . . . . . . 9
ARTICLE VI. NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.1. Notice by the Company . . . . . . . . . . . . . . . . . . 10
ARTICLE VII. COVENANT TO LIST ON EXCHANGE. . . . . . . . . . . . . . . . . . 10
SECTION 7.1. Listing on an Exchange. . . . . . . . . . . . . . . . . . 10
ARTICLE VIII. FORM OF DEBENTURE. . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 8.1. Form of Debenture . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IX. ORIGINAL ISSUE OF DEBENTURES . . . . . . . . . . . . . . . . . . 20
SECTION 9.1. Original Issue of Debentures. . . . . . . . . . . . . . . 20
i
<PAGE>
ARTICLE X. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10.1. Ratification of Indenture. . . . . . . . . . . . . . . . 20
SECTION 10.2. Trustee Not Responsible for Recitals.. . . . . . . . . . 20
SECTION 10.3. Governing Law. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10.4. Separability.. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10.5. Counterparts.. . . . . . . . . . . . . . . . . . . . . . 21
ii
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of January 31, 1997 (the
"First Supplemental Indenture"), between NORTHERN STATES POWER COMPANY, a
corporation duly organized and existing under the laws of the State of
Minnesota, having its principal office at 414 Nicollet Mall, Minneapolis,
Minnesota 55401, (the "Company"), and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture dated as of
January 30, 1997 (the "Indenture"), to the Trustee to provide for the
future issuance of the Company's unsecured debentures, notes or other
evidence of indebtedness (the "Securities"), to be issued from time to time
in one or more series as might be determined by the Company under the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known
as its 7-7/8% Junior Subordinated Debentures due 2037 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the
Indenture and this First Supplemental Indenture;
WHEREAS, NSP Financing I, a Delaware statutory business trust (the
"Trust"), has offered to the public $200 million aggregate liquidation
amount of its 7-7/8% Trust Originated Preferred Securities (the "Preferred
Securities"), representing undivided beneficial interests in the assets of
the Trust and proposes to invest the proceeds from such offering, together
with the proceeds of the issuance and sale by the Trust to the Company of
$6.19 million aggregate liquidation amount of its 7-7/8% Trust Originated
Common Securities, in $206.19 million aggregate principal amount of the
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated
and delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this First Supplemental
Indenture has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees
with the Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Delaware Trustee;
(iv) Depositary; (v) Dissolution Tax Opinion; (vi) No Recognition Opinion;
(vii) Preferred Security Certificate; (viii) Institutional Trustee; (ix)
Regular Trustees; (x) Special Event; (xi) Tax Event; (xii) Investment Company
Event; and (xiii) Purchase Agreement;
(f) the following terms have the meanings given to them in this Section
1.1(f):
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Declaration" means the Amended and Restated Declaration of Trust of NSP
Financing I, a Delaware statutory business trust, dated as of January 31,
1997.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Declaration, and the Debentures held by the Institutional Trustee
are to be distributed to the holders of the Trust Securities issued by the
Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Global Debenture" shall have the meaning set forth in Section 2.4.
2
<PAGE>
"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Non Book-Entry Preferred Securities" shall have the meaning set forth in
Section 2.4.
"Optional Redemption Price" shall have the meaning set forth in Section
3.2.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the "7-7/8%
Junior Subordinated Debentures due 2037", limited in aggregate principal
amount to $206.19 million (the "Debentures"), which amount shall be as set
forth in any written order of the Company for the authentication and delivery
of Debentures pursuant to Section 303 of the Indenture.
SECTION 2.2. Maturity. The Maturity Date will be January 31, 2037.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons in denominations
of $25 and any integral multiple thereof. Principal and interest on the
Debentures issued in certificated form will be payable, the transfer of such
Debentures will be registrable and such Debentures will be exchangeable for
Debentures bearing identical terms and provisions at the office or agency of
the Trustee; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the Holder at such address as shall
appear in the Security Register. Notwithstanding the foregoing, so long as
the Holder of any Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Institutional Trustee will
be made at such place and to such account as may be designated by the
Institutional Trustee.
Section 205 of the Indenture is hereby amended to read in its entirety as
provided in the following Section 2.4:
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to the Trustee
by the Institutional Trustee in exchange for a global Debenture in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the name
of the Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant to the
instructions of the
3
<PAGE>
Regular Trustees. The Company upon any such presentation shall execute a
Global Debenture in such aggregate principal amount and deliver the same to
the Trustee for authentication and delivery in accordance with the Indenture
and this First Supplemental Indenture. Payments on the Debentures issued as
a Global Debenture will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry certificated
form, the Debentures in certificated form may be presented to the Trustee by
the Institutional Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will
be deemed to represent beneficial interests in Debentures presented to the
Trustee by the Institutional Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such Preferred
Security Certificates will be cancelled and a Debenture, registered in the
name of the holder of the Preferred Security Certificate or the transferee of
the holder of such Preferred Security Certificate, as the case may be, with
an aggregate principal amount equal to the aggregate liquidation amount of
the Preferred Security Certificate cancelled, will be executed by the Company
and delivered to the Trustee for authentication and delivery in accordance
with the Indenture and this First Supplemental Indenture. On issue of such
Debentures, Debentures with an equivalent aggregate principal amount that
were presented by the Institutional Trustee to the Trustee will be deemed to
have been cancelled.
(b) Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only
to another nominee of the Depositary, or to a successor Depositary selected
or approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good standing
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company
will execute, and, subject to Article III of the Indenture, the Trustee, upon
written notice from the Company, will authenticate and deliver the Debentures
in definitive registered form without coupons, in authorized denominations,
and in an aggregate principal amount equal to the principal amount of the
Global Debenture in exchange for such Global Debenture. In addition, the
Company may at any time determine that the Debentures shall no longer be
represented by a Global Debenture. In such event the Company will execute, and
subject to Section 301 of the Indenture, the Trustee, upon receipt of an
Officer's Certificate evidencing such determination by the Company, will
authenticate and deliver the Debentures in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Debenture in exchange for such
Global Debenture. Upon the exchange of the Global Debenture for such
Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be cancelled by the Trustee. Such
Debentures in definitive registered form issued in
4
<PAGE>
exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Securities to the Depositary for
delivery to the Persons in whose names such Securities are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest at the rate of 7-7/8% per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date") commencing on March 31, 1997, to the Person
in whose name such Debenture or any predecessor Debenture is registered, at
the close of business on the regular record date for such interest
installment, which, in respect of (i) Debentures of which the Institutional
Trustee is the Holder and the Preferred Securities are in book-entry only
form or (ii) a Global Debenture, shall be the close of business on the
Business Day next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if (i) the Debentures are held by the Institutional
Trustee and the Preferred Securities are no longer in book-entry only form or
(ii) the Debentures are not represented by a Global Debenture, the Company
may select a regular record date for such interest installment which shall be
any date at least one Business Day but less than 60 Business Days before an
Interest Payment Date.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will be computed
on the basis of the actual number of days elapsed in such a 90-day period.
In the event that any date on which interest is payable on the Debentures is
not a Business Day, then payment of interest payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(c) If, at any time while the Institutional Trustee is the Holder of any
Debentures, the Trust or the Institutional Trustee is required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Debentures held by the Institutional Trustee,
such additional amounts as shall be required so that the net amounts received
and retained by the Trust and the Institutional Trustee after paying such
taxes, duties, assessments or other governmental charges will be equal to the
amounts the Trust and the Institutional Trustee would have received had no
such taxes, duties, assessments or other government charges been imposed.
SECTION 2.6. Preferred Security Holders Rights.
If an Event of Default constituting the failure to pay interest or
principal on the Debentures on the date such interest or principal is
otherwise payable has occurred and is continuing, then a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder directly of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities or such holder on or after the respective due date specified in
the Debentures. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures
under this First Supplemental Indenture or under the Indenture unless the
Institutional Trustee fails to do so.
5
<PAGE>
ARTICLE III.
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution Tax Opinion
that a No Recognition Opinion cannot be delivered to the Trust; then,
notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company
shall have the right upon not less than 30 days nor more than 60 days notice
to the Holders of the Debentures to redeem the Debentures, in whole or in
part, for cash within 90 days following the occurrence of such Tax Event (the
"90 Day Period") at a redemption price equal to 100% of the principal amount
to be redeemed plus any accrued and unpaid interest thereon to the date of
such redemption (the "Redemption Price"), provided that if at the time there
is available to the Company the opportunity to eliminate, within the 90 Day
Period, the Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Company, the
Trust or the Holders of the Trust Securities issued by the Trust, the Company
shall pursue such Ministerial Action in lieu of redemption, and, provided,
further, that the Company shall have no right to redeem the Debentures while
the Trust is pursuing any Ministerial Action pursuant to its obligations
under the Declaration. The Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or such earlier time as
the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New
York time, on the date such Redemption Price is to be paid.
SECTION 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to the provisions of
Article Eleven of the Indenture, except as otherwise may be specified in this
First Supplemental Indenture, the Company shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after January 31,
2002, at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon to the date of such
redemption (the "Optional Redemption Price"). Any redemption pursuant to
this paragraph will be made upon not less than 30 days nor more than 60 days
notice to the Holder of the Debentures, at the Optional Redemption Price. If
the Debentures are only partially redeemed pursuant to this Section 3.2, the
Debentures will be redeemed pro rata or by lot or by any other method
utilized by the Trustee; provided, that if at the time of redemption the
Debentures are registered as a Global Debenture, the Depositary shall
determine, in accordance with its procedures, the
6
<PAGE>
principal amount of such Debentures held by each Holder of Debentures to be
redeemed. The Optional Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date of such redemption or at such earlier time as the
Company determines provided that the Company shall deposit with the Trustee
an amount sufficient to pay the Optional Redemption Price by 10:00 a.m., New
York time, on the date such Optional Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities
are then listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not exceeding 20
consecutive quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and payable;
provided that no Extended Interest Payment Period may extend beyond the
Maturity Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at
the Coupon Rate compounded quarterly for each quarter of the Extended
Interest Payment Period ("Compounded Interest"). At the end of the Extended
Interest Payment Period, the Company shall pay all interest accrued and
unpaid on the Debentures, including any Additional Interest and Compounded
Interest (together, "Deferred Interest") that shall be payable to the Holders
of the Debentures in whose names the Debentures are registered in the
Security Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest
Payment Period, the Company may further extend such period, provided that
such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters, or extend beyond the maturity date of the
Debentures. Upon the termination of any Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Company may commence
a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may
prepay at any time all or any portion of the interest accrued during an
Extended Interest Payment Period.
7
<PAGE>
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment
Period, the Company shall give written notice to the Regular Trustees, the
Institutional Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by the
Trust are payable, or (ii) the date the Trust is required to give notice of
the record date, or the date such Distributions are payable, to the New York
Stock Exchange or other applicable self-regulatory organization or to holders
of the Preferred Securities issued by the Trust, but in any event at least
one Business Day before such record date.
(b) If the Institutional Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest Payment
Period, the Company shall give the Holders of the Debentures and the Trustee
written notice of its selection of such Extended Interest Payment Period at
least 10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to the New York Stock
Exchange or other applicable self-regulatory organization or to Holders of
the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of interest
as provided in Section 4.1, or (ii) there shall have occurred any Event of
Default, as defined in the Indenture, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of shares of its
common stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the
Company of its obligations pursuant to any contract or security requiring the
Company to purchase shares of its common stock, (ii) as a result of a
reclassification of its capital stock or the exchange or conversion of one
class or series of its capital stock for another class or series of its
capital stock or, (iii) the purchase of fractional interests in shares of its
capital stock pursuant to the conversion or exchange provisions of such
capital stock or security being converted or exchanged) or make any guarantee
payment with respect thereto, (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company which rank pari passu with or junior to
the Debentures and the Company shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Security
Guaranty).
8
<PAGE>
ARTICLE V.
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Institutional Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with
respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Purchase Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 607 of the
Indenture;
(b) pay all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions to
the underwriters in connection therewith), the fees and expenses of the
Institutional Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limitation, costs
and expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing, and disposition of
Trust assets);
(c) be primarily liable for any indemnification obligations arising with
respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Indenture or
the removal or resignation of the Trustee pursuant to this Section 5.2, the
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or
the removal or resignation of the Delaware Trustee or the Institutional
Trustee, as the case may be, pursuant to Section 5.6 of the Declaration, the
Company shall pay to the Delaware Trustee or the Institutional Trustee, as
the case may be, all amounts accrued to the date of such termination, removal
or resignation.
9
<PAGE>
ARTICLE VI
NOTICE
SECTION 6.1. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article VI. Notwithstanding the
provisions of this Article VI or any other provision of the Indenture and
this First Supplemental Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Debentures pursuant
to the provisions of this Article VI, unless and until a Responsible Officer
of the Trustee shall have received written notice thereof from the Company or
a holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601 of the Indenture, shall be entitled in all respects
to assume that no such facts exist; provided, however, that if the Trustee
shall not have received the notice provided for in this Section 6.1 at least
two Business Days prior to the date upon which by the terms hereof any money
may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any
Debenture), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
The Trustee, subject to the provisions of Section 601 of the Indenture,
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 Indebtedness
of the Company, as the case may be (or a trustee on behalf of such holder),
to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article VI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent
to the rights of such Person under this Article VI, 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.
ARTICLE VII.
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange.
If the Debentures are to be issued as a Global Debenture in connection
with the distribution of the Debentures to the holders of the Preferred
Securities issued by the Trust upon
10
<PAGE>
a Dissolution Event, the Company will use its best efforts to list such
Debentures on the New York Stock Exchange, Inc. or on such other exchange as
the Preferred Securities are then listed.
ARTICLE VIII.
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
No.
--------------------------
$
----------------------------
CUSIP No.
--------------------
NORTHERN STATES POWER COMPANY
7-7/8% JUNIOR SUBORDINATED DEBENTURE
DUE 2037
NORTHERN STATES POWER COMPANY, a Minnesota corporation (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 January 31, 2037, and to pay interest on said
principal sum from January 31, 1997, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest
has been paid or
11
<PAGE>
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of each year
commencing March 31, 1997, at the rate of 7-7/8% per annum until the
principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, 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 same rate per annum compounded
quarterly. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day 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 such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Securities, as defined in said 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. [IF PURSUANT TO THE PROVISIONS
OF THE INDENTURE THE DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL
DEBENTURE--which shall be the close of business on the fifteenth day
next preceding such Interest Payment Date.] Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holders on such regular record date and may be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall
be given to the registered Holders of this series of Debentures not less than
10 days prior to such special record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Debenture shall be
payable at the office or agency of the Trustee maintained for that purpose in
any coin or currency of the United States of America that at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of this
Debenture is the Institutional Trustee, the payment of the principal of (and
premium, if any) and interest on this Debenture will be made at such place
and to such account as may be designated by the Institutional Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each Holder
12
<PAGE>
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused thiS instrument to be executed.
Dated:
---------------------------
NORTHERN STATES POWER COMPANY
By:
-------------------------------------
Name:
Title:
Attest:
By:
------------------------------
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.
By: By:
------------------------- ------------------------------------
as Trustee as Authentication Agent
13
<PAGE>
or
By: By:
------------------------- ------------------------------------
Authorized Signatory Authorized Signatory
14
<PAGE>
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture dated as of January 30, 1997, duly executed
and delivered between the Company and Norwest Bank Minnesota, National
Association as Trustee (the "Trustee"), as supplemented by the First
Supplemented Indenture dated as of January 31, 1997, between the Company and
the Trustee (the Indenture as so supplemented, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders of the
Securities. By the terms of the Indenture, the Securities are issuable in
series that may vary as to amount, date of maturity, rate of interest and in
other respects as provided in the Indenture. This series of Securities is
limited in aggregate principal amount as specified in said First Supplemental
Indenture.
Except as provided in the next paragraph, the Debentures may not be
redeemed by the Company prior to January 31, 2002. The Company shall
have the right to redeem this Debenture at the option of the Company, without
premium or penalty, in whole or in part at any time and from time to time on
or after January 31, 2002 (an "Optional Redemption"), at a redemption
price equal to 100% of the principal amount plus any accrued but unpaid
interest, including any Compounded Interest, if any, to the date of such
redemption (the "Optional Redemption Price"). Any redemption pursuant to
this paragraph will be made upon not less than 30 nor more than 60 days'
notice, at the Optional Redemption Price.
If, at any time, a Tax Event (as defined below) shall occur or be
continuing after receipt of a Dissolution Tax Opinion (as defined below) and
either (i) the Regular Trustees and the Company shall have received an
opinion (a "Redemption Tax Opinion") of a nationally recognized independent
tax counsel experienced in such matters that, as a result of a Tax Event (as
defined herein), there is more than an insubstantial risk that the Company
would be precluded from deducting the interest on the Debentures for United
States federal income tax purposes even after the Debentures were distributed
to the holders of Preferred Securities and Common Securities in liquidation
of such holder's interest in the Trust as set forth in the Declaration of
Trust or (ii) the Regular Trustees shall have been informed by such tax
counsel that a No Recognition Opinion (as defined below) cannot be delivered,
the Company shall have the right at any time, upon not less than 30 nor more
than 60 days' notice, to redeem the Debentures in whole or in part for cash
at the Optional Redemption Price within 90 days following the occurrence of
such Tax Event; provided, however, that, if at that time there is
available to the Company or the Trust the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or
pursuing some other
15
<PAGE>
similar reasonable measure, which has no adverse effect on the Trust, the
Company or the Holders of the Preferred Securities, the Company or the Trust
will pursue such measure in lieu of redemption and provided further that the
Company shall have no right to redeem the Debentures while the Trust is
pursuing any such Ministerial Action.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in
such matters (a "Dissolution Tax Opinion") to the effect that, as a result of
(a) any amendment to, or change (including any announced prospective change)
in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein or (b) any
amendment to or interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after such date),
there is more than an insubstantial risk that (i) the Trust would be subject
to United States federal income tax with respect to income accrued or
received on the Debentures, (ii) interest payable to the Trust on the
Debentures would not be deductible by the Company for United States federal
income tax purposes or (iii) the Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after January 28, 1997.
Any redemption pursuant to the occurrence of a Tax Event will be made
upon not less than 30 days nor more than 60 days notice, at the Optional
Redemption Price.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if, at the time of
redemption, the Debentures are registered as a Global Debenture, the
Depositary shall determine the principal amount of such Debentures held by
each Debentureholder to be redeemed in accordance with its procedures.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration
16
<PAGE>
shall become, due and payable, in the manner, with the effect and subject to
the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Debentures; provided, however, that no such supplemental indenture shall (i)
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Debenture so
affected, or (ii) reduce the aforesaid percentage of Debentures, the Holders
of which are required to consent to any such supplemental indenture, without
the consent of the Holders of each Debenture then outstanding and affected
thereby. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of any series at the
time outstanding affected thereby, on behalf of all of the Holders of the
Debentures of such series, to waive any Default or Event of Default with
respect to such series, and its consequences, except a Default or Event of
Default in the payment of the principal of or premium, if any, or interest on
any of the Securities of such series or in respect of a provision which under
the Indenture cannot be modified or amended without the consent of the Holder
of each Outstanding Security of that series affected. Any such consent or
waiver by the registered Holder of this Debenture (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such Holder and upon
all future Holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer
or otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Debenture at the time and place and at the rate and
in the money herein prescribed.
So long as the Company is not in default in the payment of interest on
the Debentures, the Company shall have the right at any time during the term
of the Debentures from time to time to extend the interest payment period of
such Debentures for up to 20 consecutive quarters (an "Extended Interest
Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with the interest thereon at the
rate specified for the Debentures to the extent that payment of such interest
is enforceable under applicable law). In the event that the Company
exercises this right, then (a) the Company shall not declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire, or
make a liquidation payment with respect to, any of its capital stock (other
than (i) purchases or acquisitions of shares of its Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security requiring the Company to purchase shares
of its Common Stock, (ii) as a result of a reclassification of the Company's
capital stock or the
17
<PAGE>
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock or (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged) or make any guarantee payments
with respect to the foregoing), (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company that rank pari
passu with or junior to such Debentures and (c) the Company shall not make
any guarantee payments with respect to the foregoing (other than pursuant to
the Preferred Securities Guarantee). Prior to the termination of any such
Extended Interest Payment Period, the Company may further extend the interest
payment period; provided, that such Extended Interest Payment Period,
together with all such previous and further extensions thereof, may not
exceed 20 consecutive quarters or extend beyond the maturity date of the
Debentures. At the termination of any such Extended Interest Payment Period
and upon the payment of all accrued and unpaid interest and any additional
amount then due, the Company may commence a new Extended Interest Payment
Period, subject to the above requirements.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on
the Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the City
of Minneapolis and State of Minnesota accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee
duly executed by the registered Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will
be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and the Security Registrar may
deem and treat the registered Holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any paying agent
nor any Security Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
18
<PAGE>
The Indenture imposes certain limitations on the ability of the Company
to, among other things, merge or consolidate with any other Person or sell,
assign, transfer or lease all or substantially all of its properties or
assets. [If other covenants are applicable pursuant to the provisions of
Section 301, insert here]. All such covenants and limitations are subject to
a number of important qualifications and exceptions. The Company must report
periodically to the Trustee on compliance with the covenants in the Indenture.
[The Debentures of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof.] [This Global
Debenture is exchangeable for Debentures in definitive form only under certain
limited circumstances set forth in the Indenture. Debentures of this series so
issued 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 [herein and] therein set forth, Debentures of this series
(so issued) are exchangeable for a like aggregate principal amount of Debentures
of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
19
<PAGE>
ARTICLE IX.
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $ 206,190,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures to or upon the written
order of the Company, signed by its Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided.
SECTION 10.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
SECTION 10.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the internal laws of the State of Minnesota, and for
all purposes shall be construed in accordance with the laws of said State.
SECTION 10.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of the Debentures, but this First
Supplemental Indenture and the Debentures shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein
or therein.
20
<PAGE>
SECTION 10.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
NORTHERN STATES POWER COMPANY
By: /s/ Edward J. McIntyre
-------------------------------------
Name: Edward J. McIntyre
Title: Vice President and Chief
Financial Officer
[Seal]
Attest:
By: /s/ Gary R. Johnson
-------------------------------
Name: Gary R. Johnson
Title: Vice President,
General Counsel and
Corporate Secretary
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By /s/ Raymond S. Haverstock
--------------------------------------
Name: Raymond S. Haverstock
Title: Vice President
21
<PAGE>
Exhibit 4.13
-----------------------------------
COMMON SECURITIES GUARANTEE AGREEMENT
NSP Financing I
Dated as of January 31, 1997
-----------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . . . . . 2
ARTICLE II. TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . . . . 5
SECTION 2.2. Lists of Holders of Securities . . . . . . . . . . . . . . 5
SECTION 2.3. Reports by the Common Guarantee Trustee. . . . . . . . . . 5
SECTION 2.4. Periodic Reports to Common Guarantee Trustee . . . . . . . 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . . . . 6
SECTION 2.6. Events of Default; Waiver. . . . . . . . . . . . . . . . . 6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . . 6
SECTION 2.8. Conflicting Interests. . . . . . . . . . . . . . . . . . . 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF COMMON GUARANTEE TRUSTEE. . . . . . 7
SECTION 3.1. Powers and Duties of the Common Guarantee Trustee. . . . . 7
SECTION 3.2. Certain Rights of Common Guarantee Trustee . . . . . . . . 8
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee. . .10
ARTICLE IV. COMMON GUARANTEE TRUSTEE. . . . . . . . . . . . . . . . . . . . .10
SECTION 4.1. Common Guarantee Trustee; Eligibility. . . . . . . . . . .10
SECTION 4.2. Appointment, Removal and Resignation of Common
Guarantee Trustees . . . . . . . . . . . . . . . . . . . .11
ARTICLE V. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.2. Waiver of Notice and Demand. . . . . . . . . . . . . . . .12
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . . . .12
SECTION 5.4. Rights of Holders. . . . . . . . . . . . . . . . . . . . .13
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . .14
SECTION 5.6. Subrogation. . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 5.7. Independent Obligations. . . . . . . . . . . . . . . . . .14
ARTICLE VI. LIMITATION OF TRANSACTIONS; SUBORDINATION . . . . . . . . . . . .14
SECTION 6.1. Limitation of Transactions . . . . . . . . . . . . . . . .14
SECTION 6.2. Ranking. . . . . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE VII. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 7.1. Termination. . . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE VIII. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 8.1. Exculpation. . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 8.2. Indemnification. . . . . . . . . . . . . . . . . . . . . .16
ARTICLE IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.1. Successors and Assigns . . . . . . . . . . . . . . . . . .17
SECTION 9.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 9.4. Benefit. . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 9.5. Governing Law. . . . . . . . . . . . . . . . . . . . . . .18
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as of
January 31, 1997, is executed and delivered by Northern States Power Company, a
Minnesota corporation (the "Guarantor"), and Wilmington Trust Company, as
trustee (the "Common Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of NSP Financing I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of January 31, 1997, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof 8,000,000 preferred securities, having
an aggregate liquidation amount of $200,000,000, designated the 7-7/8 % Trust
Originated Preferred Securities (the "Preferred Securities") and 247,600
common securities, having an aggregate liquidation amount of $6,190,000,
designated the 7-7/8% Trust Originated Common Securities (the "Common
Securities");
WHEREAS, as incentive for the Holders to purchase the Common Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Common Securities Guarantee, to pay to the Holders of the
Common Securities the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under the Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
<PAGE>
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation
In this Common Securities Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Common Securities Guarantee has the
same meaning throughout;
(c) all references to "the Common Securities Guarantee" or "this Common
Securities Guarantee" are to this Common Securities Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee,
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Common Securities Guarantee, unless otherwise defined in this
Common Securities Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than a day on which banking institutions
in the City of New York, New York are authorized or required by any applicable
law to close.
"Common Guarantee Trustee" means Wilmington Trust Company until a Successor
Common Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Common Securities Guarantee and thereafter means
each such Successor Common Guarantee Trustee.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Common Guarantee Trustee
at which the corporate trust business of the Common Guarantee Trustee shall, at
any particular time, be
-2-
<PAGE>
principally administered, which office at the date of execution of this
Agreement is located at Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Common Securities.
"Debentures" means the series of junior subordinated debt securities of the
Guarantor designated the 7-7/8% Junior Subordinated Debentures due 2037 held
by the Institutional Trustee (as defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Common Securities Guarantee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Common Securities, to the extent not paid or
made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration) that are required to be paid on such Common Securities to the
extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Common Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Common Securities as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Common Securities to the date of payment, to the extent the
Issuer shall have funds available therefor, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an event of default
under the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments hereunder are subordinated to the rights
of Holders of Preferred Securities to receive Guarantee Payments under the
Preferred Securities Guarantee Agreement.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer of any Common Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Common Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Common Guarantee Trustee, any Affiliate of
the Common Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Common Guarantee Trustee.
"Indenture" means the Indenture dated as of January 30, 1997, among the
Guarantor (the "Debenture Issuer") and Norwest Bank Minnesota, National
Association, as trustee, and any indenture supplemental thereto pursuant to
which certain subordinated debt securities of the Debenture Issuer are to be
issued to the Institutional Trustee of the Issuer.
-3-
<PAGE>
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Common Securities,
voting separately as a class, of more than 50% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Common Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Common Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Person" means 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 Common Guarantee Trustee,
any officer within the Corporate Trust Office of the Common Guarantee Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Common Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Common Guarantee Trustee" means a successor Common Guarantee
Trustee possessing the qualifications to act as Common Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
-4-
<PAGE>
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application
(a) This Common Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Common Securities
Guarantee and shall, to the extent applicable, be governed by such provisions;
and
(b) if and to the extent that any provision of this Common Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. Lists of Holders of Securities
(a) The Guarantor shall provide the Common Guarantee Trustee with a list,
in such form as the Common Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Common Securities ("List of Holders")
as of such date, (i) within 1 Business Day after January 1 and June 30 of each
year, and (ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Common Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Common Guarantee Trustee by the Guarantor. The Common Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Common Guarantee Trustee shall comply with its obligations under
Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Common Guarantee Trustee
Within 60 days after May 15 of each year, the Common Guarantee Trustee
shall provide to the Holders of the Common Securities 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 Common
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Common Guarantee Trustee
The Guarantor shall provide to the Common Guarantee Trustee such documents,
reports and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
-5-
<PAGE>
SECTION 2.5. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Common Guarantee Trustee such evidence
of compliance with any conditions precedent, if any, provided for in this Common
Securities Guarantee 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 Common Securities may,
by vote, on behalf of the Holders of all of the Common Securities, 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 Common Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.7. Event of Default; Notice
(a) The Common Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Common Securities, notices of all Events of
Default actually known to a Responsible Officer of the Common Guarantee Trustee,
unless such defaults have been cured before the giving of such notice, provided,
that, the Common Guarantee Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer of the Common Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Common Securities.
(b) The Common Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Common Guarantee Trustee shall have received
written notice, or unless a Responsible Officer of the Common Guarantee Trustee
charged with the administration of the Declaration shall have obtained actual
knowledge thereof.
SECTION 2.8. Conflicting Interests
The Declaration shall be deemed to be specifically described in this Common
Securities Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
-6-
<PAGE>
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
COMMON GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Common Guarantee Trustee
(a) This Common Securities Guarantee shall be held by the Common Guarantee
Trustee for the benefit of the Holders of the Common Securities, and the Common
Guarantee Trustee shall not transfer this Common Securities Guarantee to any
Person except a Holder of Common Securities exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Common Guarantee Trustee on
acceptance by such Successor Common Guarantee Trustee of its appointment to act
as Successor Common Guarantee Trustee. The right, title and interest of the
Common Guarantee Trustee shall automatically vest in any Successor Common
Guarantee Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Common Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Common Guarantee Trustee has occurred and is continuing, the Common Guarantee
Trustee shall enforce this Common Securities Guarantee for the benefit of the
Holders of the Common Securities.
(c) The Common 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 Common Securities Guarantee, and no implied covenants shall be read into
this Common Securities Guarantee against the Common Guarantee Trustee. In case
an Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Common
Guarantee Trustee, the Common Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Common Securities Guarantee, 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 Common Securities Guarantee shall be construed to
relieve the Common 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 Common Guarantee Trustee
shall be determined solely by the express provisions of this Common
Securities Guarantee, and the Common Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Common Securities Guarantee, and no
implied covenants or obligations shall be
-7-
<PAGE>
read into this Common Securities Guarantee against the Common
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Common
Guarantee Trustee, the Common 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
Common Guarantee Trustee and conforming to the requirements of this
Common Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically required to
be furnished to the Common Guarantee Trustee, the Common Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Common Securities
Guarantee;
(ii) the Common Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Common
Guarantee Trustee, unless it shall be proved that the Common Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Common 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 Common Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Common Guarantee Trustee, or exercising any trust or power conferred upon
the Common Guarantee Trustee under this Common Securities Guarantee; and
(iv) no provision of this Common Securities Guarantee shall require
the Common 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 Common 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 Common Securities Guarantee or indemnity, reasonably satisfactory to
the Common Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Common Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Common 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 believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
-8-
<PAGE>
(ii) Any direction or act of the Guarantor contemplated by this
Common Securities Guarantee shall be sufficiently evidenced by a Direction
(as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Common Securities
Guarantee, the Common Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Common Guarantee 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 Guarantor.
(iv) The Common Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Common Guarantee Trustee may consult with counsel, and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.
The Common Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Common Securities
Guarantee from any court of competent jurisdiction.
(vi) The Common Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Common Securities
Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Common Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Common Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses and the
expenses of the Common Guarantee Trustee's agents, nominees or custodians)
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
Common Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Common Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Common Securities Guarantee.
(vii) The Common 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 Common Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
-9-
<PAGE>
(viii) The Common Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Common Guarantee
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Common Guarantee Trustee or its agents
hereunder shall bind the Holders of the Common Securities, and the
signature of the Common Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Common Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions of
this Common Securities Guarantee, both of which shall be conclusively
evidenced by the Common Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Common Securities
Guarantee the Common Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Common Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Common Securities, (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 conclusively relying on or acting in accordance with
such instructions.
(b) No provision of this Common Securities Guarantee shall be deemed to
impose any duty or obligation on the Common Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the Common
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
Common Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Common Guarantee Trustee does not assume any
responsibility for their correctness. The Common Guarantee Trustee makes no
representation as to the validity or sufficiency of this Common Securities
Guarantee.
ARTICLE IV.
COMMON GUARANTEE TRUSTEE
SECTION 4.1. Common Guarantee Trustee; Eligibility
(a) There shall at all times be a Common Guarantee Trustee which shall:
-10-
<PAGE>
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Common Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Common Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2 (c).
(c) If the Common Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Common Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of Common Guarantee Trustees
(a) Subject to Section 4.2(b), the Common Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Common Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Common Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Common Guarantee Trustee and delivered to the Guarantor.
(c) The Common Guarantee Trustee appointed to office shall hold office
until a Successor Common Guarantee Trustee shall have been appointed or until
its removal or resignation. The Common Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Common Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Common Guarantee Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Common Guarantee Trustee and delivered to the
Guarantor and the resigning Common Guarantee Trustee.
(d) If no Successor Common Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the
-11-
<PAGE>
Guarantor of an instrument of resignation, the resigning Common Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Common Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Common Guarantee
Trustee.
(e) No Common Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Common Guarantee Trustee.
(f) Upon termination of this Common Securities Guarantee or removal or
resignation of the Common Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Common Guarantee Trustee all amounts accrued to the
date of such termination, removal or resignation.
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 the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Common Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION5.3. Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor under
this Common Securities Guarantee 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 Common Securities to be performed or
observed by the Issuer;
-12-
<PAGE>
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Common Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Common Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Common 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 Common Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Common
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Common Guarantee Trustee in
respect of this Common Securities Guarantee or exercising any trust or power
conferred upon the Common Guarantee Trustee under this Common Securities
Guarantee.
(b) If the Common Guarantee Trustee fails to enforce this Common
Securities Guarantee, any Holder of Common Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Common Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Common Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
-13-
<PAGE>
Payment, a holder of Common Securities may directly institute a proceeding
against the Guarantor for enforcement of the Common Security Guarantee for such
payment.
SECTION 5.5. Guarantee of Payment
This Common Securities Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6. Subrogation
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Common Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Common Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee. 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 Common Securities, and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Common Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions
So long as any Common Securities remain outstanding, if there shall have
occurred an Event of Default or an event of default under the Declaration, then
(a) the Guarantor shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of its common stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans or the satisfaction by the Guarantor of its obligations pursuant to any
contract or security requiring the Guarantor to purchase shares of its common
stock, (ii) as a result of a reclassification of its capital stock or the
exchange or conversion of one class or series of its capital stock for another
class or series of its capital stock or (iii) the purchase of fractional
interests in shares of its capital stock pursuant to the conversion or exchange
provisions of such capital stock or security being converted or
-14-
<PAGE>
exchanged) or make any guarantee payment with respect thereto, (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor which rank pari passu with or junior to the Debentures or (c) the
Guarantor shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Common Securities Guarantee Agreement).
SECTION 6.2. Ranking
This Common Securities Guarantee will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor except those liabilities of the Guarantor
made pari passu or subordinate by their terms, (ii) pari passu with the most
senior common or preference stock now or hereafter issued by the Guarantor and
with any guarantee now or hereafter entered into by the Guarantor in respect of
any common or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
If an Event of Default has occurred and is continuing under the
Declaration, the rights of the Holders of the Common Securities to receive
Guarantee Payments under this Common Securities Guarantee shall be subordinated
to the rights of the holders of the Preferred Securities to receive payment of
all amounts due and owing under the terms of the Preferred Securities Guarantee.
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination
This Common Securities Guarantee shall terminate upon (i) full payment of
the Redemption Price of all Common Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Common Securities or (iii) upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Common
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Common Securities must restore payment
of any sums paid under the Common Securities or under this Common Securities
Guarantee.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Common Securities
Guarantee and in a manner that such Indemnified
-15-
<PAGE>
Person reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Common Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Common Securities might properly be paid.
SECTION 8.2. Indemnification
(a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Guarantee 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 or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of the Common Securities Guarantee.
-16-
<PAGE>
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Successors and Assigns
All guarantees and agreements contained in this Common Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Common
Securities then outstanding.
SECTION 9.2. Amendments
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this Common
Securities Guarantee may only be amended with the prior approval of the Holders
of at least a Majority in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all the outstanding Common Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
SECTION 9.3. Notices
All notices provided for in this Common Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Common Guarantee Trustee, at the Common Guarantee
Trustee's mailing address set forth below (or such other address as the Common
Guarantee Trustee may give notice of to the Holders of the Common Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Common Securities):
Northern States Power Company
414 Nicollet Mall
Minneapolis, Minnesota 55401
Attention: Edward J. McIntyre
-17-
<PAGE>
(c) If given to any Holder of Common Securities, at the address set forth
on the books and records of the Issuer.
All such notices 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 9.4. Benefit
This Common Securities Guarantee is solely for the benefit of the Holders
of the Common Securities and, subject to Section 3.1(a), is not separately
transferable from the Common Securities.
SECTION 9.5. Governing Law
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA.
-18-
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.
NORTHERN STATES POWER COMPANY, as Guarantor
By: /s/ Edward J. McIntyre
----------------------------------------------
Name: Edward J. McIntyre
Title: Vice President and Chief Financial
Officer
WILMINGTON TRUST COMPANY, as Common
Guarantee Trustee
By: /s/ Donald G. MacKelcan
----------------------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
-19-
<PAGE>
Exhibit 4.14
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated as of January 28, 1997 (this "Agreement") between
NSP Financing I, a statutory business trust organized under the laws of the
State of Delaware (the "Trust") and Northern States Power Company, a Minnesota
corporation (the "Buyer").
In consideration of the foregoing, and intending to be legally bound
hereby, the parties hereto agree that, subject to the conditions contained
herein, the Buyer will purchase from the Trust and the Trust will sell to the
Buyer the Trust's 7-7/8% Common Securities (liquidation amount of $25 per common
security), representing undivided beneficial interests in the Trust (the "Common
Securities"), equal to an aggregate liquidation amount of approximately 3% of
the total capital of the Trust.
SALE OF STOCK AND TERMS OF PAYMENT
1.01 THE SALE. Upon the terms and subject to the conditions of this
Agreement, on January 31, 1997 (the "Closing Date"), the Trust will issue,
sell and deliver to the Buyer, and the Buyer will accept and purchase from
the Trust, 247,600 Common Securities (the "Amount"). The Amount shall be
subject to the adjustments provided for in Section 1.03 hereof.
1.02. PURCHASE PRICE. Upon the terms and subject to the conditions
contained in this Agreement, and in consideration of the aforesaid issuance,
sale and delivery of the Common Securities on the Closing Date the Buyer will
pay or cause to be paid to the Trust $6,190,000 in cash (the "Purchase Price")
for the Amount. The Purchase Price shall be subject to the adjustments provided
for in Section 1.03 hereof.
1.03. AMOUNT AND PURCHASE PRICE ADJUSTMENT. If on the Closing Date,
after giving effect to the issuance and sale of the Trust's 7-7/8% Trust
Preferred Securities, the Amount does not equal an aggregate liquidation amount
of at least 3% of the total capital of the Trust, the Amount shall be adjusted
to equal an aggregate liquidation amount of at least 3% of the total capital of
the Trust and the Purchase Price shall be adjusted accordingly.
<PAGE>
IN WITNESS WHEREOF, each of the Trust and the Buyer has caused this
Agreement to be signed by its duly authorized officers as of the date first
above written.
NSP FINANCING I
By: /s/ Paul Pender
--------------------------------
Name: Paul Pender
Title: Regular Trustee
NORTHERN STATES POWER COMPANY
By: /s/ Edward J. McIntyre
--------------------------------
Name: Edward J. McIntyre
Title: Vice President and Chief
Financial Officer
2
