As filed with the Securities and Exchange Commission on November
3, 1995
Registration No. 33-
Post-Effective Amendment No. 1 to Registration No. 33-52853
Post-Effective Amendment No. 1 to Registration No. 33-48750
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT AND
POST-EFFECTIVE AMENDMENT NO. 1
UNDER
THE SECURITIES ACT OF 1933
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NORAM ENERGY CORP. Delaware 72-0120530
NORAM FINANCING I Delaware Applied for
NORAM FINANCING II Delaware Applied for
(Exact name of registrant (State or other (I.R.S. Employer
as specified in its jurisdiction of Identification No.)
charter) incorporation or
organization)
1600 Smith Street
11th Floor
Houston, Texas 77002
(713) 654-5600
(Address, including zip code,
and telephone number, including
area code, of each registrant's
principal executive offices)
Hubert Gentry, Jr.
Senior Vice President
and General Counsel
NorAm Energy Corp.
1600 Smith Street
11th Floor
Houston, Texas 77002
(713) 654-5600
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
-------------------------------------------------------
Copies to:
Gerry D. Osterland, Esq.
Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
(214) 220-3939
Vincent J. Pisano, Esq.
Skadden, Arps, Slate, Meagher<PAGE>
& Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
------------------------------------------
Approximate date of commencement of proposed sale to the
public: From time to time after this Registration Statement
becomes effective, as determined by market conditions.
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If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box: / /
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, please check the following box: /X/
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering:
/ /
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: /X/
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each Amount to maximum maximum Amount of
class of be aggregate aggregate registration
securities to registered offering offering fee
be registered (1)(2) price per price(3)(4)
unit(2)(3)
Debt
Securities,
Preferred
Stock and
Common Stock
of NorAm $500,000,000 100% $500,000,000 $133,760 (5)
Energy Corp.,
Preferred
Securities of
NorAm
Trusts(6) . .
Guarantees of
Preferred
Securities of
NorAm Trusts
by NorAm
Energy
Corp.(7) . .
Total . . . . $500,000,000 $500,000,000 $133,760
(1) In no event will the aggregate initial offering price of the
Securities being registered and issued under this
Registration Statement exceed $500,000,000.
(2) Not specified as to each class of securities to be
registered pursuant to General Instruction II.D. of Form S-3
under the Securities Act.
(3) The proposed maximum offering price per unit will be
determined from time to time by the Registrants in
connection with, and at the time of, the issuance of the
securities registered hereunder.
(4) Estimated solely for the purpose of computing the
registration fee in accordance with Rule 457(o) of the
Securities Act.
(5) 14,950,000 shares of NorAm Energy Corp. Common Stock covered
by Registration Statement No. 33-52853 are being carried
forward to this Registration Statement, a registration fee
of $38,342 was previously paid with regard to such
securities. $1,000,000 of debt securities covered by
Registration Statement No. 33-48750 is being carried forward
to this Registration Statement, a registration fee of
$312.50 was previously paid with regard to such securities.
(6) Subordinated Debt Securities of NorAm Energy Corp. may be
issued and sold to NorAm Trusts in connection with the
issuance by the NorAm Trusts of Preferred Securities. The
Subordinated Debt Securities may be distributed, under
certain circumstances, to the holders of Preferred
Securities for no additional consideration.
(7) Includes the rights of holders of the Preferred Securities
under the Guarantee and certain back-up undertakings as
described in the Registration Statement. Pursuant to Rule<PAGE>
457(n) under the Securities Act of 1933, no fee is payable
with respect to the Guarantee and back-up undertaking.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
In accordance with Rule 429 under the Securities Act of
1993, the Prospectus included herein is a combined prospectus
which also relates to Registration Statement No. 33-52853 and
Registration Statement No. 33-48750 (the "Prior Registration
Statements") previously filed by the registrant. This
Registration Statement which is a new Registration Statement,
also constitutes the post-effective amendment no. 1, to each of
the Prior Registration Statements. Such post-effective
amendments shall hereafter become effective concurrently with the
effectiveness of this Registration Statement in accordance with
Section 8(a) of the Securities Act of 1933. This registration
statement and the Prior Registration Statements are collectively
referred to herein as the "Registration Statement".<PAGE>
EXPLANATORY NOTE
This Registration Statement contains three forms of
prospectus, one covering Debt Securities, one covering Equity
Securities and one covering Preferred Securities of the NorAm
Trusts.<PAGE>
*******************************************************************
*Information contained herein is subject to completion or *
*amendment. A registration statement relating to these securities*
*has been filed with the Securities and Exchange Commission. *
*These securities may not be sold nor may offers to buy be *
*accepted prior to the time the registration statement becomes *
*effective. This prospectus shall not constitute an offer to sell*
*or the solicitation of an offer to buy nor shall there be any *
*sale of these securities in any State in which such offer, *
*solicitation, or sale would be unlawful prior to registration or *
*qualification under the securities laws of any such State. *
*******************************************************************
SUBJECT TO COMPLETION, Dated November 3, 1995
PROSPECTUS
NORAM ENERGY CORP.
Debt Securities
---------------------------------------------
NorAm Energy Corp. (the "Company") may offer from time to
time its unsecured debt securities consisting of notes,
debentures or other evidences of indebtedness (the "Debt
Securities") in an aggregate initial offering price of not more
than $500,000,000. The Debt Securities may be offered as
separate series in amounts, at prices and on terms to be
determined in light of market conditions at the time of sale and
set forth in a Prospectus Supplement or Prospectus Supplements.
The terms of each series of Debt Securities, including,
where applicable, the specific designation, aggregate principal
amount, authorized denominations, maturity, interest rate or
rates and time or times of payment of interest, any terms for
optional or mandatory redemption or payment of additional amounts
or any sinking fund provisions, any initial public offering
price, the proceeds to the Company and any other specific terms
in connection with the offering and sale of such series ("Offered
Securities") will be set forth in a Prospectus Supplement or
Prospectus Supplements. Debt Securities may be issued with
amounts payable in respect of principal or premium or interest on
the Debt Securities determined by reference to the value, rate or
price of one or more specific indices.
The Prospectus Supplement will also contain information,
where applicable, concerning certain United States federal income
tax considerations relating to, and as to any listing on a
securities exchange of, the Debt Securities covered by such
Prospectus Supplement.
The Debt Securities may be sold directly by the Company,
through agents designated from time to time or to or through<PAGE>
underwriters or dealers. See "Plan of Distribution". If any
agents of the Company or any underwriters are involved in the
sale of any Debt Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and
any applicable commissions or discounts will be set forth in a
Prospectus Supplement. The net proceeds to the Company from such
sale also will be set forth in a Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is __________________, 1995.
-2-<PAGE>
No dealer, salesman or other person has been authorized to give
any information or to make any representation not contained in
this Prospectus or any Prospectus Supplement and, if given or
made, such information or representation must not be relied upon
as having been authorized by the Company or any underwriter or
agent. This Prospectus and any Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby and thereby in jurisdiction
to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall, under
any circumstances, create an implication that the information
herein or therein is correct as of any time subsequent to their
respective dates.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference
Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Certain securities
of the Company are listed on, and reports, proxy statements and
other information concerning the Company can be inspected at the
offices of, The New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
This Prospectus does not contain all of the information set
forth in the Registration Statement, of which this Prospectus is
a part, and exhibits relating thereto which the Company has filed
with the Commission under the Securities Act of 1933, as amended
(the "Act"). Reference is made to such Registration Statement
and to the exhibits relating thereto for further information with
respect to the Company and the Debt Securities offered hereby.
Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the copy
of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its
Annual Report on Form 10-K for the fiscal year ended December 31,
1994 (the "Form 10-K") and its Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995, June 30, 1995 and
[September 30, 1995] and its Current Reports on Form 8-K dated
August 3, 1995 and November 2, 1995, which have been filed
previously with the Commission under File No. 1-3751.
-3-<PAGE>
All documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of
the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement
contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any and all of the
foregoing documents incorporated by reference herein, other than
the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents).
Requests should be directed to the Office of the Secretary, NorAm
Energy Corp., P.O. Box 2628, Houston, Texas 77252, telephone
number (713) 654-5600.
-4-<PAGE>
THE COMPANY
NorAm Energy Corp., a Delaware corporation (the "Company"),
was incorporated in 1928 and is principally engaged in the
distribution and transmission of natural gas including gathering,
storage and marketing of natural gas. On May 10, 1994, the
stockholders of the Company approved an amendment to the
Company's Restated Certificate of Incorporation to change the
Company name from Arkla, Inc. to NorAm Energy Corp.
The Company's natural gas distribution business is conducted
through its three divisions, Arkla (formerly known as Arkansas
Louisiana Gas Company), Entex and Minnegasco, and their
affiliates, which collectively form the nation's third largest
gas distribution operation with over 500 billion cubic feet
("Bcf") of annual throughput to over 2.7 million customers.
Through these divisions and their affiliates, the Company engages
in both the natural gas distribution sales and transport
businesses. The facilities and terms of service related to
Arkla's, Entex's and Minnegasco's sales to their customers are
largely regulated by state public service commissions and, in
Texas, by municipalities.
The Company's natural gas transmission business
(collectively referred to as "Trading and Transportation") is
conducted principally through the following wholly-owned
subsidiaries of the Company: NorAm Gas Transmission Company
("NGT", formerly known as Arkla Energy Resources Company),
Mississippi River Transmission Corporation ("MRT"), NorAm Energy
Services, Inc. ("NES", formerly known as Arkla Energy Marketing
Company) and NorAm Field Services Corp. ("NFS", formerly known as
Arkla Gathering Services Company). Such subsidiaries form the
NorAm Trading and Transportation Group. Through these
subsidiaries and their affiliates, the Company engages in the
transmission and sale of natural gas, including gathering,
storage and marketing of natural gas. NGT and MRT are interstate
pipeline companies, NES serves as the Company's principal natural
gas supply aggregator and marketer and NFS owns and operates the
natural gas gathering assets previously held by NGT.
In March 1993, the Company transferred assets, liabilities
and service obligations of Arkla Energy Resources, formerly a
division of the Company, into a then newly-formed wholly-owned
subsidiary of the Company, now called NGT, pursuant to an order
from the Federal Energy Regulatory Commission (the "FERC")
approving the transfer. As a result of this transfer of assets,
liabilities and service obligations, the FERC now has
jurisdiction over NGT's interstate pipeline business, including
transportation services and certain of NGT's transactions with
affiliates of the Company, which historically were subject to
state regulatory oversight.
Effective February 1, 1995, after receipt of all necessary
authorization from the FERC, NFS assumed ownership and operation
of NGT's gathering assets pursuant to a transfer from NGT to NFS
of such assets. While the FERC provided for a two-year
gathering service option for existing customers under existing
-5-<PAGE>
terms and conditions, the scope of the FERC's jurisdiction over
NFS is limited, and NFS is not generally subject to traditional
cost-of-service rate regulation. These gathering assets consist
primarily of 3,500 miles of gathering pipeline which collect gas
from more than 200 separate systems in major producing fields in
Arkansas, Oklahoma, Louisiana and Texas.
NGT owns and operates a natural gas pipeline system located
in portions of Arkansas, Louisiana, Mississippi, Missouri,
Kansas, Oklahoma, Tennessee and Texas. The NGT system consists
of approximately 6,400 miles of transmission lines. The NGT
pipeline system extends generally in an easterly direction from
the Anadarko Basin area of the Texas Panhandle and western
Oklahoma through the Arkoma Basin area of eastern Oklahoma and
central Arkansas, from the mainline system in Oklahoma and
Arkansas to south central Kansas and southwest Missouri. In its
system, NGT operates various product extraction plants and
compressor facilities related to its transmission business.
The MRT system consists of approximately 2,200 miles of
pipeline serving principally the greater St. Louis area in
Missouri and Illinois. This pipeline system includes the "Main
Line System," the "East Line," and the "West Line." The Main
Line System includes three transmission lines extending
approximately 435 miles from Perryville, Louisiana, to the
greater St. Louis area. The East Line, also a main transmission
line, extends approximately 94 miles from southwestern Illinois
to St. Louis. The West Line extends approximately 140 miles from
east Texas to Perryville, Louisiana. The system also includes
various other branch, lateral, transmission and gathering lines
and compressor stations.
The Company owns and operates seven gas storage fields.
Four storage fields are associated with NGT's pipeline and have a
combined maximum deliverability of approximately 655 million
cubic feet ("MMcf") per day and a working gas capacity of
approximately 22.5 Bcf. Three storage fields are associated with
MRT's pipeline and have a maximum aggregate deliverability of
approximately 570 MMcf per day and a working gas capacity of
approximately 31 Bcf.
NES markets gas under daily, baseload and term agreements
which include either market sensitive or fixed pricing
provisions. Fixed price sales or purchase contracts are hedged
using gas futures contracts or other derivative financial
instruments. See Notes 1 and 11 of Notes to the Company's
Consolidated Financial Statements included in the Form 10-K.
On December 31, 1992, the Company completed the sale of
Arkla Exploration Company to Seagull Energy Corporation. The
sale terminated the Company's activities in the oil and gas
exploration and production business. On June 30, 1993 the
Company completed the sale of its intrastate pipeline businesses
as conducted by Louisiana Intrastate Gas Corporation and its
subsidiaries, LIG Chemical Company, LIG Liquids Corporation and
Tuscaloosa Pipeline to a subsidiary of Equitable Resources, Inc.
-6-<PAGE>
The Company's principal executive offices are located at
1600 Smith Street, 11th Floor, Houston, Texas 77002. Its
mailing address is P. O. Box 2628, Houston, Texas 77252-2628, and
its telephone number is (713) 654-5600.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the
net proceeds from the sale of the Debt Securities will be used to
reduce the Company's existing indebtedness and for general
corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
Six Months Year Ended December 31,
Ended
June 30, 1995 1994 1993 1992 1991 1990
Ratio of Earnings to
Fixed Charges (1)... 1.97 (2) 1.47 1.47 1.10 1.19 1.97
- ------------------------------
(1) The ratios of earnings to fixed charges have been computed
using earnings which are the sum of income from continuing
operations, income taxes and fixed charges. Fixed charges
are interest, amortization of debt discount and expense and
the estimated interest portion of rental charges.
(2) Because of the seasonal nature of the Company's business,
the ratio for the six month period may not necessarily be
indicative of the ratio which will result for the full year
1995.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated
as of April 15, 1990 (the "Indenture"), between the Company and
Citibank, N.A., as trustee (the "Trustee"), a copy of which is
filed as an exhibit to the Registration Statement of which this
Prospectus is a part. The statements under this caption are
brief summaries of certain provisions of the Indenture, do not
purport to be complete and are subject to, and are qualified in
their entirety by reference to, all of the provisions of the
Indenture, including the definitions therein of certain terms.
Wherever particular Sections of the Indenture or terms that are
defined in the Indenture are referred to herein or in a
Prospectus Supplement, it is intended that such Sections or
defined terms shall be incorporated by reference herein or
therein, as the case may be.
The term "Securities", as used under this caption, refers to
all Securities issued under the Indenture and includes the Debt
Securities.
The Debt Securities may be issued from time to time in one
or more series. The following description sets forth certain
general terms and provisions of the Debt Securities. The
particular terms of each series of Debt Securities offered by any
-7-<PAGE>
Prospectus Supplement or Prospectus Supplements will be described
in such Prospectus Supplement or Prospectus Supplements relating
to such series.
General
The Indenture does not limit the aggregate amount of
Securities which may be issued thereunder and Securities may be
issued thereunder from time to time in separate series up to the
aggregate amount from time to time authorized by the Company for
each series. The Securities will be unsecured obligations of the
Company and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement or Prospectus
Supplements will describe the following terms of the Offered
Securities: (1) the title of the Offered Securities; (2) any
limitation on the aggregate principal amount of the Offered
Securities; (3) whether any of the Offered Securities are to be
issuable in permanent global form (a "Global Security") and the
circumstances under which any such Global Security or Securities
may be exchanged for Securities registered in the name of, and
any transfer of such Global Security or Securities may be
registered to, a Person other than the depositary for such Global
Security (the "Depositary") or its nominee; (4) the price or
prices (expressed as a percentage of the aggregate principal
amount thereof) at which the Offered Securities will be issued;
(5) the date or dates on which the principal of the Offered
Securities will be payable; (6) the rate or rates per annum at
which the Offered Securities will bear interest, if any, or the
formula pursuant to which such rate or rates will be determined,
and the date or dates from which any such interest will accrue;
(7) the Interest Payment Dates on which any such interest on the
Offered Securities will be payable and the Regular Record Date
for any interest payable on any Offered Securities on any
Interest Payment Date; (8) the Person to whom any interest on any
Offered Security will be payable, if other than 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; (9) the place or places where the principal of
and any premium and interest on the Offered Securities will be
payable and where the Offered Securities may be surrendered for
registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Offered
Securities and the Indenture may be served; (10) the period or
periods within which and the price or prices at which the Offered
Securities may, pursuant to any optional redemption provisions,
be redeemed, in whole or in part, and the other detailed terms
and conditions of any such optional redemption provisions; (11)
the obligation, if any, of the Company to redeem or purchase the
Offered Securities pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period
or periods within which and the price or prices at which the
Offered Securities will be redeemed or purchased, in whole or in
part, pursuant to such obligation, and the other detailed terms
and conditions of such obligation; (12) the denominations in
which any Offered Securities will be issuable, if other than
-8-<PAGE>
denominations of $1,000 and any integral multiple thereof; (13)
if the amount of payment or principal of and any premium and
interest on any of the Offered Securities may be determined with
reference to an index, the manner in which such amounts shall be
determined; (14) whether the Offered Securities will have the
benefit of the covenant described under "Put Right of Holders
Upon a Designated Event and a Rating Decline" and, if so, the
dates as of which such covenant shall become effective and
expire, as applicable; (15) any additional events of default or
covenants applicable to the Offered Securities; (16) if other
than the principal amount thereof the portion of the principal
amount of the Offered Securities which shall be payable upon
declaration of acceleration of the Maturity thereof; and (17) any
other terms of the Offered Securities not inconsistent with the
provisions of the Indenture (Section 3.01.)
Securities may be issued as Original Issue Discount
Securities to be sold at a substantial discount below their
principal amount. Special United States federal income tax
considerations applicable to securities issued at an original
issue discount, including Original Issue Discount Securities,
will be described, if applicable, in a Prospectus Supplement.
Form, Exchange, Registration and Transfer
Although the Indenture provides for the issuance of
securities either in registered or bearer form, the Company
intends to issue Debt Securities of each series solely as
Registered Securities. Securities of a series may be
represented, in whole or in part, by one or more permanent Global
Securities in a denomination or aggregate denominations equal to
the portion of the aggregate principal amount of outstanding
Securities to be represented by such Global Security or
Securities. Any Global Security deposited with the Depositary or
its nominee identified in the applicable Prospectus Supplement
may not be surrendered for transfer or exchange except as may be
specified in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with
respect to any portion of a series of Securities to be
represented by one or more Global Securities will be described in
the applicable Prospectus Supplement. Beneficial interests in
Global Securities will only be evidenced by, and transfers
thereof will only be effected through, records maintained by the
Depositary and the institutions that are participants in the
Depositary.
At the option of the Holder, subject to the terms of the
Indenture and the limitations applicable to Global Securities,
Securities of any series will be exchangeable for other
Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. (Section 3.05)
Securities may be presented for exchange or registration of
transfer (with the form of transfer endorsed thereon duly
executed) as provided above, at the office of the Security
Registrar or at the office of any transfer agent designated by
-9-<PAGE>
the Company for such purpose with respect to any series of
Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes
and other governmental charges as described in the Indenture.
Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person
making the request. The Company has appointed the Trustee as
Security Registrar. (Section 3.05) If a Prospectus Supplement
refers to any transfer agents (in addition to the Security
Registrar) initially designated by the Company with respect to
any series of Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that
the Company will be required to maintain a transfer agent in each
Place of Payment for such series. The Company may at any time
designate additional transfer agents with respect to any series
of Securities. (Section 10.02)
In the event of any redemption in part, the Company shall
not be required to (i) issue, register the transfer of or
exchange any Security during a period beginning at the opening of
business 15 days before any selection for redemption of
Securities of like tenor and of the series of which such Security
is a part, and ending at the close of business on the date of
mailing of the relevant notice of redemption to all Holders of
Securities of like tenor and of such series to be redeemed or;
(ii) 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 3.05)
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus
Supplement, principal of (and premium, if any) and interest on
Debt Securities will be payable, subject to any applicable laws
and regulations, at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except
that at the option of the Company payment of any interest may be
made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on a Debt Security on any
Interest Payment Date will be made to the Person in whose name
such Debt Security (or Predecessor Security) is registered at the
close of business on the Regular Record Date for such interest.
(Section 3.07)
Unless otherwise indicated in an applicable Prospectus
Supplement, the corporate Trust Office of the Trustee in the City
of New York will be designated as the Company's sole Paying Agent
for payments with respect to offered Securities of each series.
Any Paying Agents initially designated by the Company for the
Offered Securities will be named in an applicable Prospectus
Supplement. The Company may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or
-10-<PAGE>
approve a change in the office through which any Paying Agent
acts, except that the Company will be required to maintain a
Paying Agent in each Place of Payment for such series. (Section
10.02)
All moneys paid by the Company to a Paying Agent for the
payment of the principal of (and premium, if any) or interest on
any Security of any series which remain unclaimed at the end of
two years after such principal (and premium, if any) or interest
shall have become due and payable will be repaid to the Company
and the Holder of such Security will thereafter look only to the
Company for payment thereof. (Section 10.03)
Certain Definitions
"Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Subsidiaries less, without
duplication: (a) total current liabilities (excluding
indebtedness due within 12 months), (b) all reserves for
depreciation and other asset valuation reserves but excluding
reserves for deferred federal income taxes, (c) all intangible
assets such as goodwill, trademarks, trade names, patents and
unamortized debt discount and expense carried as an asset and
(d) appropriate adjustments on account of minority interests of
other persons holding common stock in any Subsidiary, all as
reflected on the Company's most recent audited consolidated
balance sheet preceding the date of determination. (Section
1.01)
The term "indebtedness," as applied to the Company or any
Subsidiary, means bonds, debentures, notes and other instruments
representing obligations created or assumed by any such
corporation (i) for money borrowed (other than unamortized debt
discount or premium); (ii) evidenced by a note or similar
instrument given in connection with the acquisition of any
business, properties or assets of any kind; (iii) as lessee under
leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles; and
(iv) any amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligation listed in
clause (i), (ii) or (iii) above. All indebtedness secured by a
lien upon property owned by the Company or any Subsidiary and
upon which indebtedness any such corporation customarily pays
interest, although any such corporation has not assumed or become
liable for the payment of such indebtedness, is also deemed to be
indebtedness of any such corporation. All indebtedness for money
borrowed incurred by other persons which is directly guaranteed
as to payment of principal by the Company or any Subsidiary shall
for all purposes of the Indenture be deemed to be indebtedness of
any such corporation, but no other contingent obligation of any
such corporation in respect of indebtedness incurred by other
persons shall for any purpose be deemed indebtedness of such
corporation. Indebtedness of the Company or any Subsidiary does
not include (i) amounts which are payable only out of all or a
portion of the oil, gas, natural gas, helium, coal, metals,
minerals, steam, timber, hydrocarbons, or geothermal or other
natural resources produced, derived or extracted from properties
-11-<PAGE>
owned or developed by such corporation; (ii) any indebtedness
incurred to finance oil, gas, natural gas, helium, coal, metals,
minerals, steam, timber, hydrocarbons, or geothermal or other
natural resources or synthetic fuel exploration or development,
payable, with respect to principal and interest, solely out of
the proceeds of oil, gas, natural gas, helium, coal, metals,
minerals, steam, timber, hydrocarbons, or geothermal or other
natural resources or synthetic fuel to be produced, sold and/or
delivered by the Company or any Subsidiary; (iii) indirect
guarantees or other contingent obligations in connection with the
indebtedness of others, including agreements, contingent or
otherwise, with such other persons or with third persons with
respect to, or to permit or insure the payment of, obligations of
such other persons, including, without limitation, agreements to
advance or supply funds to or to invest in such other persons, or
agreements to pay for property, products or services of such
other persons (whether or not conferred, delivered or rendered),
and any demand charge, throughput, take-or-pay, keep-well, make-
whole, cash deficiency, maintenance of working capital or
earnings or similar agreements; and (iv) any guarantees with
respect to lease or other similar periodic payments to be made by
other persons. (Section 1.01)
"Principal Property" means any natural gas distribution
property, natural gas pipeline or gas processing plant located in
the United States, except any such property that in the opinion
of the Board of Directors is not of material importance to the
total business conducted by the Company and its consolidated
subsidiaries. "Principal Property" shall not include any oil or
gas property or the production or proceeds of production from an
oil or gas producing property or the production or any proceeds
of production of gas processing plants or oil or gas or petroleum
products in any pipeline or storage field. (Section 1.01)
"Restricted Subsidiary" means any Subsidiary which owns a
Principal Property. "Subsidiary" means any corporation of which
at least a majority of all outstanding stock having by the terms
thereof ordinary voting power in the election of directors of
such corporation (irrespective of whether or not at the time
stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned by the
Company or by one or more Subsidiaries, or by the Company and one
or more other Subsidiaries. (Section 1.01)
"Sale and Leaseback Transaction" means any arrangement with
any Person providing for the leasing to the Company or any
Restricted Subsidiary of any Principal Property (except for
temporary leases for a term, including any renewal thereof, of
not more than three years and except for leases between the
Company and a Restricted Subsidiary or between Restricted
Subsidiaries), which Principal Property has been or is to be sold
or transferred by the Company or such Restricted Subsidiary to
such person. (Section 10.09)
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Restrictive Covenants
The Indenture contains the covenants summarized below, which
are applicable so long as any of the Debt Securities are
outstanding.
Limitations On Liens. The Company will not, and will not
permit any Restricted Subsidiary to pledge, mortgage or
hypothecate, or permit to exist, except in favor of the Company
or any Restricted Subsidiary, any mortgage, pledge, lien or other
encumbrance upon, any Principal Property at any time owned by it
or a Restricted Subsidiary, to secure any indebtedness (as
defined above), unless effective provision is made whereby
outstanding Debt Securities will be secured equally and ratably
therewith (or prior thereto). This restriction will not apply
to: (a) mortgages, pledges, liens or encumbrances on any property
held or used by the Company or a Restricted Subsidiary in
connection with the exploration for, development of or production
of, oil, gas, natural gas, other hydrocarbons, helium, coal,
metals, minerals, steam, timber or geothermal or other natural
resources or synthetic fuels, such properties to include, but not
be limited to, the Company's or a Restricted Subsidiary's
interest in any mineral fee interests, oil, gas or other mineral
leases, royalty, overriding royalty or net profits interests,
production payments and other similar interests, wellhead
production equipment, tanks, field gathering lines, leasehold or
field separation and processing facilities, compression
facilities and other similar personal property and fixtures;
(b) mortgages, pledges, liens or encumbrances on oil, gas,
natural gas, other hydrocarbons, helium, coal, metals, minerals,
steam, timber, geothermal or other natural resources or synthetic
fuels produced or recovered from any property, an interest in
which is owned or leased by the Company or a Restricted
Subsidiary; (c) mortgages, pledges, liens or encumbrances (or
certain extensions, renewals or refundings thereof) upon any
property acquired before or after the date of the Indenture,
created at the time of acquisition or within one year thereafter
to secure all or a portion of the purchase price thereof or the
cost of construction or improvement, or existing thereon at the
date of acquisition, provided that every such mortgage, pledge,
lien or encumbrance applies only to the property so acquired or
constructed and fixed improvements thereon; (d) mortgages,
pledges, liens or encumbrances upon any property acquired by any
corporation that is or becomes a Restricted Subsidiary after the
date of the Indenture (an "Acquired Entity"), provided that every
such mortgage, pledge, lien or encumbrance (1) shall either
(i) exist prior to the time the Acquired Entity becomes a
Restricted Subsidiary or (ii) be created at the time the Acquired
Entity becomes a Restricted Subsidiary or within one year
thereafter to secure payment of the acquisition price thereof and
(2) shall only apply to those properties owned by the Acquired
Entity at the time it becomes a Restricted Subsidiary or
thereafter acquired by it from sources other than the Company or
any other Restricted Subsidiary; (e) pledges of current assets,
in the ordinary course of business, to secure current
liabilities; (f) mechanics' or materialmen's liens, any
mortgages, pledges, liens, encumbrances or charges arising by
-13-<PAGE>
reason of pledge or deposits to secure certain public or
statutory obligations; (g) mortgages, pledges, liens or
encumbrances upon any office, data processing or transportation
equipment; (h) mortgages, pledges, liens or encumbrances created
or assumed in connection with the issuance of debt securities,
the interest on which is excludable from gross income of the
holder of such security pursuant to the Internal Revenue Code of
1986, as amended (the "Code"), for the purpose of financing the
acquisition or construction of property to be used by the Company
or a Restricted Subsidiary; (i) pledges or assignments of
accounts receivable or conditional sales contracts or chattel
mortgages and evidence of indebtedness secured thereby, received
in connection with the sale of goods or merchandise to customer;
(j) certain liens for taxes, judgments and attachments; or
(k) certain other liens or encumbrances. (Section 10.08)
Notwithstanding the foregoing, the Company or a Restricted
Subsidiary may issue, assume or guarantee indebtedness secured by
a mortgage which would otherwise be subject to the foregoing
restrictions in an aggregate amount which, together with all
other indebtedness of the Company or a Restricted Subsidiary
secured by a mortgage which (if originally issued, assumed or
guaranteed at such time) would otherwise be subject to the
foregoing restrictions (not including secured indebtedness
permitted under the foregoing exceptions) and the Value of Sale
and Leaseback Transactions existing at such time (other than Sale
and Leaseback Transactions the proceeds of which have been
applied to the retirement of Debt Securities or of certain long-
term indebtedness or to the purchase of another Principal
Property (Section 10.09) and other than Sale and Leaseback
Transactions in which the property involved would have been
permitted to be mortgaged under (c) or (d) above) does not at the
time such indebtedness is incurred exceed 5% of Consolidated Net
Tangible Assets, as shown on the Company's most recent audited
consolidated balance sheet preceding the date of determination.
(Section 10.08)
Limitation on Sale and Leaseback Transactions. Sale and
Leaseback Transactions by the Company or any Restricted
Subsidiary of any Principal Property are generally prohibited
unless the net proceeds of such sale are at least equal to the
fair value of such Principal Property and either (a) the Company
or such Restricted Subsidiary would be entitled to incur
indebtedness secured by a lien on the Principal Property to be
leased without equally and ratably securing the Debt Securities
of each series, or (b) the Company applies an amount not less
than the fair value of such property (i) to the optional
redemption of Debt Securities in accordance with the provisions
of the Indenture and the terms of the Debt Securities so to be
redeemed, (ii) to the retirement of certain long-term
indebtedness of the Company or a Restricted Subsidiary or
(iii) to the purchase at not more than the fair value of
Principal Property (other than that involved in such Sale and
Leaseback Transaction). (Section 10.09)
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Put Right of Holders Upon a Designated Event and a Rating
Decline. If so specified in the terms of the Debt Securities of
any series, such series shall have the benefit of the following
covenant. In the event that there occurs at any time prior to
any date specified in the terms of such series of Debt Securities
both (a) a Designated Event (as hereinafter defined) with respect
to the Company and (b) a Rating Decline (as hereinafter defined),
each holder of the Debt Securities shall have the right, at the
holder's option, to require the Company to purchase all or any
part of such holder's Debt Securities on the date ("Repurchase
Date") that is 100 days after the last to occur of public notice
of the Designated Event and the Rating Decline, at 100% of the
principal amount thereof or such other price as is specified in
the applicable Prospectus Supplement, plus accrued interest to
the Repurchase Date.
On or about the twenty-eighth day after the last to occur of
public notice of the occurrence of a Designated Event and the
Rating Decline, the Company is obligated to notify the Trustee of
such events and give notice to all holders of the Debt Securities
of such series regarding the Designated Event, the Rating Decline
and the repurchase right. The notice shall state the Repurchase
Date, the date by which the repurchase right must be exercised
(which date shall be at least ten days prior to the Repurchase
Date), the applicable price for such Debt Securities and the
procedure which the holder must follow to exercise this right.
To exercise this right, the holder of such Debt Securities must
deliver at least ten days prior to the Repurchase Date written
notice to the Company (or an agent designated by the Company for
such purpose and notified to the Trustee and the holders) of the
holder's exercise of such right, the name in which such Debt
Securities were registered and the principal amount to be
repurchased, together with the Debt Securities with respect to
which the right is being exercised, duly endorsed for transfer to
the Company. Such written notice shall be irrevocable. Debt
Securities repurchased pursuant to this covenant shall be
cancelled as provided in the Indenture.
A default in the performance of this covenant which
continues for 90 days after the date on which written notice
thereof is given to the Company by the Trustee or the holders of
25% or more in aggregate principal amount of the Outstanding Debt
Securities of all series entitled to the benefits of this
covenant will be an Event of Default with respect to Debt
Securities of all series entitled to the benefits of this
covenant. The holders of 66-2/3% in principal amount of the
Outstanding Debt Securities of any series entitled to the
benefits of this covenant may on behalf of the holders of all
Debt Securities of that series waive, insofar as that series is
concerned, compliance by the Company with this covenant.
As used herein, a "Designated Event" shall be deemed to have
occurred at such time as (i) a "person" or "group" (within the
meaning of Sections 13(d)(3) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 30% of the total voting power of all classes of
stock then outstanding of the Company normally entitled to vote
-15-<PAGE>
in elections of directors ("Voting Stock"); or (ii) during any
period of two consecutive years, individuals who at the beginning
of such period constituted the Company's Board of Directors
(together with any new director whose election by the Company's
Board of Directors or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-
thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office;
or (iii) the Company consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially
all of its assets to any person, or any corporation consolidates
with or merges into the Company, in either event pursuant to a
transaction in which Voting Stock of the Company is changed into
or exchanged for cash, securities and other property, provided
that such transaction (a) between the Company and its
Subsidiaries or between Subsidiaries or (b) involving the
exchange of the Company's Voting Stock as consideration in the
acquisition of another business or businesses (without change or
exchange of the Company's outstanding Voting Stock into or for
cash, securities or other property) shall be excluded from the
operation of this clause (iii); or (iv) the Company, one or more
employee benefit plans ("Employee Benefit Plans") as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended, maintained by the Company or any Subsidiary
thereof, or any Subsidiary of the Company purchases or otherwise
acquires, directly or indirectly, beneficial ownership of Voting
Stock of the Company if, after giving effect to such purchase or
acquisition, the Company (together with such Employee Benefit
Plans and such Subsidiaries) acquires 20% or more of the
Company's Voting Stock within any 12-month period; or (v) on any
date (a "Calculation Date") the Company makes any distribution or
distributions of cash, property or securities (other than regular
dividends, and distributions of capital stock of the Company) to
holders of Voting Stock of the Company or the Company, any
Employee Benefit Plan or any Subsidiary purchases or otherwise
acquires beneficial ownership of Voting Stock of the Company and
the sum of the fair market value of such distribution or purchase
plus the fair market value of all other such distributions and
purchases which have occurred during the preceding 12-month
period, is at least 20% of the fair market value of the
outstanding Voting Stock of the Company. The percentage in (v)
above is calculated on such Calculation Date by determining the
percentage of fair market value of the Company's outstanding
Voting Stock as of such Calculation Date which is represented by
the fair market value of the distributions and purchases which
have occurred on such date and adding to that percentage all of
the percentages which have been similarly calculated on the
Calculation Dates of all such distributions and purchases during
the preceding 12-month period.
As used herein, a "Rating Decline" shall be deemed to have
occurred if on any date within the 90-day period following public
notice of the occurrence of a Designated Event (which period
shall be extended so long as the rating of the Debt Securities is
under publicly announced consideration for possible downgrade by
-16-<PAGE>
a Rating Agency (as hereinafter defined)) (i) in the event the
Debt Securities are rated by one or both Rating Agencies on the
Rating Date (as hereinafter defined) as Investment Grade (as
hereinafter defined), the rating of the Debt Securities by such
Rating Agency or Rating Agencies shall fall below Investment
Grade, or (ii) in the event the Debt Securities are rated by both
Rating Agencies on the Rating Date below Investment Grade, the
rating of the Debt Securities by either Rating Agency shall be at
least one Full Rating Category (as hereinafter defined) below the
rating of the Debt Securities by such Rating Agency on the Rating
Date. Since a Rating Decline will be deemed to exist only if the
conditions set forth in either (i) or (ii) above have occurred,
it is possible that events could occur which would result in a
significant downgrade in the rating of the Debt Securities
without necessarily allowing the Holders of Debt Securities
entitled to the benefits of this covenant the option to exercise
such right.
As used herein, "Rating Agency" shall mean Standard & Poor's
Corporation and its successors ("S&P"), and Moody's Investors
Service, Inc. and its successors ("Moody's"), or if S&P or
Moody's or both shall not make a rating on the Debt Securities
publicly available, a nationally recognized statistical rating
agency or agencies, as the case may be, selected by the Company
which shall be substituted for S&P or Moody's or both, as the
case may be, "Investment Grade" shall mean BBB -- or higher by
S&P or Baa3 or higher by Moody's or the equivalent of such
ratings by S&P or Moody's or by any other Rating Agency selected
as provided above, and "Rating date" shall mean the date which is
121 days prior to public notice of the occurrence of a Designated
Event.
As used herein, the term "Full Rating Category" shall mean
(i) with respect to S&P, any of the following categories: BB, B,
CCC, CC and C; (ii) with respect to Moody's any of the following
categories: Ba, B, Caa, Ca and C; and (iii) with respect to any
other Rating Agency, the equivalent of any such category of S&P
or Moody's used by such other Rating Agency. In determining
whether the rating of the Debt Securities has decreased by the
equivalent of one Full Rating Category, gradation within Full
Rating Categories (+ and - for S&P; 1, 2, and 3 for Moody's; or
the equivalent gradation for another Rating Agency) shall be
taken into account (e.g., with respect to S&P, a decline in a
rating from BB+ to BB-, or from BB to B+, will constitute a
decrease of less than one Full Rating Category).
The Company will comply with any applicable provisions of
the federal securities laws in connection with the put right
described above, including, if applicable, Section 14(e) of the
Exchange Act and the rules and regulations of the Commission
thereunder.
Other than the Debt Securities entitled to the benefit of
the put right described above, there are no other obligations of
the Company which would become accelerated upon the triggering of
such put right.
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In the event that the put right described above were
triggered, funds to repurchase the Debt Securities entitled to
the benefit of the put right would be obtained from cash on hand
and other internally generated funds, from external financing or
from a combination of these sources.
Because a Designated Event could be expected to occur in
connection with certain forms of takeover attempts, these
provisions could deter hostile or friendly acquisitions of the
Company where the person attempting the acquisition views itself
as unable to finance the purchase of the principal amount of the
Debt Securities which may be tendered to the Company upon
occurrence of a Designated Event and a Rating Decline. (Section
10.14)
Events of Default
The following are Events of Default under the Indenture with
respect to Debt Securities of any series: (i) failure to pay
principal of, or premium, if any, on any Debt Security of that
series when due; (ii) failure to pay any interest on any Debt
Security of that series when due, which failure continues for 30
days, (iii) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (iv) failure
to observe or perform any other covenants or agreements of the
Company in the Indenture other than a covenant or agreement a
default in whose performance or whose breach is elsewhere
specifically dealt with in the Indenture or which is specifically
included in the Indenture solely for the benefit of a series of
Debt Securities other than that series, which continues for 90
days after written notice as provided in the Indenture; (v)
certain events in bankruptcy, insolvency or reorganization; and
(vi) any other Event of Default provided with respect to Debt
Securities of that series. (Section 5.01)
A default under any indebtedness of the Company other than
the Debt Securities will not be an Event of Default under the
Indenture. An Event of Default under one series of Debt
Securities will not necessarily be an Event of Default with
respect to any other series of Debt Securities.
The Indenture provides that (1) if an Event of Default
described in clause (i), (ii), (iii) or (vi) above occurs and is
continuing with respect to Debt Securities of any series, either
the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Debt Securities of such series then
outstanding may declare the principal (or, if the Debt 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) of all outstanding Debt Securities of that series
and the interest accrued thereon, if any, to be due and payable
immediately; (2) if an Event of Default described in clause (iv)
above occurs and is continuing, then in such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of
all the then Outstanding Securities (treated as one class) of
each series entitled to the benefit of the covenant or agreement
which the Company has failed to observe or perform may declare
-18-<PAGE>
the principal amount (or, if any such Securities are Original
Issue Discount Securities, such portion of the principal amount
as may be specified in the terms of that series) of all of such
Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the
Holders) and upon any such declaration such principal amount (or
specified portion thereof) of such Securities shall become
immediately due and payable; and (3) if an Event of Default
described in clause (v) above occurs and is continuing, either
the Trustee or the Holders of not less than 25% in aggregate
principal amount of all Debt Securities then outstanding (treated
as one class) may declare the principal (or, in the case of
Original Issue Discount Securities, the portion of the principal
amount thereof specified in the terms thereof) of all Debt
Securities then outstanding and the interest accrued thereon, if
any, to be due and payable immediately. (Section 5.02.) Upon
certain conditions such declarations may be annulled and past
defaults (except for a default in the payment of principal of, or
premium, if any, or interest on such Debt Securities or in
respect of covenants or provisions which cannot be modified or
amended without the consent of the holder of each Debt Security
affected) may be waived by the holders of a majority in aggregate
principal amount of the then outstanding Debt Securities of each
such series. (Section 5.13.) For information as to waiver of
defaults, see "Meetings, Modification and Waiver" below.
The Indenture provides that the Trustee will be under no
obligation, subject to the duty of the Trustee during default to
act with the required standard of care, to exercise any of its
rights and powers under the Indenture at the request or direction
of any of the holders, unless such holders shall have offered to
the Trustee reasonable indemnity. (Sections 6.01 and 6.03.)
Subject to such provisions for indemnification of the Trustee,
the holders of a majority in principal amount of the outstanding
Securities of any series will 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 Debt Securities of
that series. (Section 5.12.)
The Company will be required to furnish to the Trustee
annually a statement as to the performance by the Company of
certain of its obligations under the Indenture and as to any
default in such performance. (Section 10.11.)
Under the Indenture, the Trustee must give to the holders of
each series of Debt Securities notice of all uncured defaults
with respect to such series within 90 days after the occurrence
of such a default (the term default to include the events
specified above without grace periods); provided that, except in
the case of default in the payment of principal of (or premium,
if any) or interest on, any of the Debt Securities, the Trustee
shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the
interests of the holders of the Debt Securities of such series.
(Section 6.02.)
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Meetings, Modifications and Waiver
Modifications and amendments of the Indenture may be made by
the Company and the Trustee with the consent of the Holders of
not less than 66 2/3% aggregate principal amount of the
Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder
of each Outstanding Security affected thereby, (a) change the
Stated Maturity of the principal of, or any installment of
principal of or interest on any Security, (b) reduce the
principal amount of, or premium or interest on, any Security,
(c) change any obligation of the Company to pay additional
amounts, (d) reduce the amount of principal of an Original Issue
Discount Security payable upon acceleration of the Maturity
thereof, (e) change the coin or currency in which any Security or
any premium or interest thereon is payable, (f) impair the right
to institute suit for the enforcement of any payment on or with
respect to any Security, (g) reduce the percentage in principal
amount of Outstanding Securities of any series, the consent of
whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults, (h) reduce the
requirements contained in the Indenture for quorum or voting,
(i) change any obligation of the Company to maintain an office or
agency in the places and for the purposes required by the
Indenture, or (j) modify any of the above provisions. (Section
9.02.)
The Holders of at least 66 2/3% in aggregate principal
amount of the Outstanding Securities of each series may, on
behalf of the Holders of all the Securities of that series,
waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the Indenture.
(Section 10.15.) The Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each
series may, on behalf of all Holders of Securities of that
series, waive any past default under the Indenture with respect
to Securities of that series, except a default (a) in the payment
of principal of (or premium, if any) or interest on any Security
of such series, or (b) in respect of a covenant or provision of
the Indenture which cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series
affected. (Section 5.13.)
The Indenture provides 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 thereunder or are present at
a meeting of Holders of Securities for quorum purposes, the
principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of
such determination upon acceleration of the Maturity thereof.
(Section 1.01.)
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The Indenture contains provisions for convening meetings of
the Holders of Securities of a series. (Section 13.01.) A
meeting may be called at any time by the Trustee, and also by the
Company or the Holders of at least 10% in principal amount of the
Outstanding Securities of such series if the Trustee fails to
call the meeting upon request of the Company or such Holders, in
any such case upon notice given in accordance with "Notices"
below. (Section 13.02.) Except for any consent which must be
given by the Holder of each Outstanding Security affected
thereby, as described above, any resolution presented at a
meeting or adjourned meeting at which a quorum is present may be
adopted by the affirmative vote of the Holders of a majority in
principal amount of the Outstanding Securities of that series;
provided, however, that any resolution with respect to any
consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the Holders of no
less than a specified percentage in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting at which a quorum is present only by the
affirmative vote of the Holders of not less than such specified
percentage in principal amount of the Outstanding Securities of
that series. Except for any consent which must be given by the
Holder of each Outstanding Security affected thereby, as
described above, any resolution passed or decision taken at any
meeting of Holders of Securities of any series duly held in
accordance with the Indenture will be binding on all Holders of
Securities of that series. The quorum at any meeting called to
adopt a resolution, and at any adjourned meeting, will be persons
holding or representing a majority in principal amount of the
Outstanding Securities of a series; provided, however, that if
any action is to be taken at such meeting with respect to a
consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the Holders of
not less than 66 2/3% in principal amount of the Outstanding
Securities of a series, the persons holding or representing such
66 2/3% in principal amount of the Outstanding Securities of such
series will constitute a quorum. (Section 13.04.)
Consolidation, Merger and Sale of Assets
The Company, without the consent of the Holders of any of
the Outstanding Securities under the Indenture, may consolidate
or merge with or into, or transfer or lease its assets
substantially as an entirety to, any Person or may permit any
such Person to consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially
as an entirety to the Company, provided that any successor Person
is a corporation, partnership or trust organized and validly
existing under the laws of any domestic jurisdiction, which
assumes the Company's obligations on the Securities and under the
Indenture, that, after giving effect to the transaction, no Event
of Default, and no event which, after notice or lapse of time,
would become an Event of Default, shall have happened and be
continuing, and that certain other conditions are met. (Sections
8.01 and 8.02.)
-21-<PAGE>
Notices
Notices to Holders of Debt Securities will be given by mail
to the addresses of such Holders as they appear in the Security
Register. (Section 1.06.)
Title
The Company, the Trustee and any agent of the Company or the
Trustee may treat the registered owner of any Debt Security as
the absolute owner thereof (whether or not such Debt Security
shall be overdue and notwithstanding any notice to the contrary)
for the purpose of making payment and for all other purposes.
(Section 3.08.)
Replacement of Securities
Any mutilated Security will be replaced by the Company at
the expense of the Holder upon surrender of such Security to the
Trustee. Securities that become destroyed, lost or stolen will
be replaced by the Company at the expense of the Holder upon
delivery to the Trustee of evidence of the destruction, loss or
theft thereof satisfactory to the Company and the Trustee. In
the case of a destroyed, lost or stolen Security, an indemnity
satisfactory to the Trustee and the Company may be required at
the expense of the Holder of such Security before a replacement
Security will be issued. (Section 3.06.)
Governing Law
The Indenture is and the Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
(Section 1.13.)
Discharge and Termination
The Company may terminate its obligations with respect to
any series of Debt Securities on the terms and subject to the
conditions specified in the Indenture, by irrevocably depositing
in trust with the Trustee cash or U.S. Government Obligations the
principal of and interest on which are sufficient (without
reinvestment and assuming no tax liability will be imposed on the
Trustee) to pay principal of and interest on such series to
redemption or maturity. The right of the Company to so terminate
its obligations is conditioned upon delivery to the Trustee of an
opinion of counsel to the Company to the effect that holders of
Debt Securities will not recognize any income, gain or loss for
federal income tax purposes as a result of such deposit and
termination. Upon termination of the Company's obligations with
respect to the Debt Securities of a series, the Trustee, at the
request of the Company, will release the Company from its
obligations under the Indenture, subject to the continuation of
certain obligations as set forth in the Indenture. Such
termination and release, however, will not relieve the Company of
its obligation to pay when due principal of or interest on such
Debt Securities, if such Debt Securities are not paid from the
-22-<PAGE>
cash or U.S. Government Obligations held by the Trustee for
payment thereof. (Sections 4.02, 4.03 and 4.04)
Regarding the Trustee
Citibank, N.A., the Trustee under the Indenture, has normal
commercial banking relationships with the Company and is the
agent bank and a lending bank under the Company's $400,000,000
revolving credit agreement.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to one or more
underwriters for public offering and sale by them or may sell
Debt Securities to investors directly or through agents. Any
such underwriter or agent involved in the offer and sale of the
Offered Securities will be named in an applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a
fixed price or prices, which may be changed, or from time to time
at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The Company also may offer and sell the Offered Securities in
exchange for one or more of its outstanding issues of debt or
convertible debt securities. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to
offer and sell the Offered Securities upon the terms and
conditions as shall be set forth in any Prospectus Supplement.
In connection with the sale of Offered Securities, underwriters
may be deemed to have received compensation from the Company in
the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for
whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions (which may be changed
from time to time) from the purchasers for whom they may act as
agent.
Any underwriting compensation paid by the Company to
underwriters or agents in connection with the offering of Offered
Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered
Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them
on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions, under the Act.
Underwriters, dealers and agents may be entitled, under
agreements with the Company, to indemnification against and
contribution toward certain civil liabilities, including
liabilities under the Act, and to reimbursement by the Company
for certain expenses.
-23-<PAGE>
If so indicated in an applicable Prospectus Supplement, the
Company will authorize dealers acting as the Company's agents to
solicit offers by certain institutions to purchase Offered
Securities from the Company at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each
Contract will be for an amount not less than, and the aggregate
principal amount of Offered Securities sold pursuant to Contracts
shall be not less nor more than, the respective amounts stated in
such Prospectus Supplement. Institutions with whom Contracts,
when authorized, may be made to include commercial and savings
banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions,
but will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except (i) the
purchase by an institution of the Offered Securities covered by
its Contracts shall not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which
such institution is subject, and (ii) if the Offered Securities
are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by
Contracts. Agents and underwriters will have no responsibility
in respect of the delivery or performance of Contracts.
All Offered Securities will be a new issue of securities
with no established trading market. Any underwriters to whom
Offered Securities are sold by the Company for public offering
and sale may make a market in such Offered Securities, but such
underwriters will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can
be given as to the liquidity of or the trading markets for any
Offered Securities.
Certain of the underwriters or agents and their associates
may be customers of, engage in transactions with and perform
services for the Company in the ordinary course of business.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon
for the Company by Hubert Gentry, Jr., Senior Vice President and
General Counsel of the Company, P.O. Box 2628, Houston, Texas
77252. Mr. Gentry beneficially owns 39,805 shares of common
stock of the Company acquired pursuant to various employee
benefit plans of the Company.
EXPERTS
The consolidated balance sheets of the Company as of
December 31, 1994 and 1993 and the consolidated statements of
income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1994 incorporated by
reference in the Form 10-K, which is incorporated by reference in
this Prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants,
-24-<PAGE>
given on the authority of that firm as experts in accounting and
auditing.
-25-<PAGE>
********************************************************************
*Information contained herein is subject to completion or *
*amendment. A registration statement relating to these securities *
*has been filed with the Securities and Exchange Commission. *
*These securities may not be sold nor may offers to buy be *
*accepted prior to the time the registration statement becomes *
*effective. This prospectus shall not constitute an offer to sell *
*or the solicitation of an offer to buy nor shall there be any *
*sale of these securities in any State in which such offer, *
*solicitation, or sale would be unlawful prior to registration or *
*qualification under the securities laws of any such State. *
********************************************************************
SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1995
PROSPECTUS
NORAM ENERGY CORP.
Preferred Stock and/or Common Stock
---------------------------------------------
This Prospectus may be used in connection with the offering
of shares of NorAm Energy Corp.'s (the "Company") preferred
stock, par value $.10 per share (the "Preferred Stock") and
shares of its common stock, par value $.625 per share (the
"Common Stock"). The Preferred Stock and Common Stock
(collectively, the "Securities") may be offered separately or
together, in separate series, in amounts, at prices and on terms
determined at the time of sale and set forth in one or more
supplements to this Prospectus (together, the "Prospectus
Supplement"). Pursuant to the terms of the Registration
Statement of which this prospectus forms a part, the Company's
debt securities may also be offered under the Registration
Statement.
The specific terms of each offering of Securities made
pursuant to this Prospectus will be set forth in the applicable
Prospectus Supplement, which in each case will identify any
underwriters or agents for the Securities being offered thereby
and their compensation, and the public offering or purchase
price.
The Prospectus Supplement will also include the following:
(a) in the case of any series of Preferred Stock, the specific
designation, the aggregate number of shares offered, the dividend
rate or method of calculation, the dividend period and dividend
payment dates, whether such dividends will be cumulative or
noncumulative, the liquidation preference, the currency or
composite currency, if not the U.S. dollar, in which dividends
and liquidation preference will be denominated, voting rights,
any terms for redemption at the option of the holder or the
Company and any applicable conversion provisions, in the event
that such series of Preferred Stock is convertible at the option
of the holder thereof or of the Company, into shares of Common
Stock or into other securities of the Company or another issuer,
and (b) in the case of Common Stock, the aggregate number of
shares offered.
The Prospectus Supplement will also contain information,
where applicable, concerning certain United States federal income
tax considerations relating to, and as to any listing on a
securities exchange of, the Securities covered by such Prospectus
Supplement.
The Securities may be offered by the Company or by other
selling securityholders directly to purchasers, through agents
designated from time to time, through underwriting syndicates led
by one or more managing underwriters or through one or more
underwriters acting alone. If the Company, directly or through
agents, solicits offers to purchase the Securities, the Company<PAGE>
reserves the sole right to accept and, together with its agents,
to reject in whole or in part any proposed purchase of
Securities. Affiliates of the Company may from time to time act
as agents or underwriters in connection with the sale of the
Securities to the extent permitted by applicable law.
If any agent or underwriter is involved in the sale of the
Securities offered hereby, any applicable commissions or
discounts will be set forth in, or will be calculable from, the
applicable Prospectus Supplement, and the net proceeds to the
Company or the selling securityholders from such sale will be the
purchase price of the Securities less such commissions or
discounts and other attributable issuance and distribution
expenses. See "Plan of Distribution" for possible
indemnification arrangements for agents, underwriters and their
controlling persons.
This Prospectus may not be used to consummate sales of
Securities unless a Prospectus Supplement is also delivered. The
delivery of this Prospectus together with a Prospectus Supplement
relating to particular Securities shall not constitute an offer
in any jurisdiction of any of the other Securities covered by
this Prospectus.
----------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------
The date of this Prospectus is ________, 1995.
-2-<PAGE>
No dealer, salesman or other person has been authorized to give
any information or to make any representation not contained in
this Prospectus or any Prospectus Supplement and, if given or
made, such information or representation must not be relied upon
as having been authorized by the Company or any underwriter or
agent. This Prospectus and any Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby and thereby in jurisdiction
to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall, under
any circumstances, create an implication that the information
herein or therein is correct as of any time subsequent to their
respective dates.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference
Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Certain securities
of the Company are listed on, and reports, proxy statements and
other information concerning the Company can be inspected at the
offices of, The New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
This Prospectus does not contain all of the information set
forth in the Registration Statement, of which this Prospectus is
a part, and exhibits relating thereto which the Company has filed
with the Commission under the Securities Act of 1933, as amended
(the "Act"). Reference is made to such Registration Statement
and to the exhibits relating thereto for further information with
respect to the Company and the Debt Securities offered hereby.
Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the copy
of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its
Annual Report on Form 10-K for the fiscal year ended December 31,
1994 (the "Form 10-K") and its Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995, June 30, 1995 and
[September 30, 1995] and its Current Reports on Form 8-K dated
August 3, 1995 and November 2, 1995, which have been filed
previously with the Commission under File No. 1-3751.
-3-<PAGE>
All documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of
the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement
contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any and all of the
foregoing documents incorporated by reference herein, other than
the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents).
Requests should be directed to the Office of the Secretary, NorAm
Energy Corp., P.O. Box 2628, Houston, Texas 77252, telephone
number (713) 654-5600.
-4-<PAGE>
THE COMPANY
NorAm Energy Corp., a Delaware corporation (the "Company"),
was incorporated in 1928 and is principally engaged in the
distribution and transmission of natural gas including gathering,
storage and marketing of natural gas. On May 10, 1994, the
stockholders of the Company approved an amendment to the
Company's Restated Certificate of Incorporation to change the
Company name from Arkla, Inc. to NorAm Energy Corp.
The Company's natural gas distribution business is conducted
through its three divisions, Arkla (formerly known as Arkansas
Louisiana Gas Company), Entex and Minnegasco, and their
affiliates, which collectively form the nation's third largest
gas distribution operation with over 500 billion cubic feet
("Bcf") of annual throughput to over 2.7 million customers.
Through these divisions and their affiliates, the Company engages
in both the natural gas distribution sales and transport
businesses. The facilities and terms of service related to
Arkla's, Entex's and Minnegasco's sales to their customers are
largely regulated by state public service commissions and, in
Texas, by municipalities.
The Company's natural gas transmission business
(collectively referred to as "Trade and Transportation") is
conducted principally through the following wholly-owned
subsidiaries of the Company: NorAm Gas Transmission Company
("NGT", formerly known as Arkla Energy Resources Company),
Mississippi River Transmission Corporation ("MRT"), NorAm Energy
Services, Inc. ("NES", formerly known as Arkla Energy Marketing
Company) and NorAm Field Services Corp. ("NFS", formerly known as
Arkla Gathering Services Company). Such subsidiaries form the
NorAm Trading and Transportation Group. Through these
subsidiaries and their affiliates, the Company engages in the
transmission and sale of natural gas, including gathering,
storage and marketing of natural gas. NGT and MRT are interstate
pipeline companies, NES serves as the Company's principal natural
gas supply aggregator and marketer and NFS owns and operates the
natural gas gathering assets previously held by NGT.
In March 1993, the Company transferred assets, liabilities
and service obligations of Arkla Energy Resources, formerly a
division of the Company, into a then newly-formed wholly-owned
subsidiary of the Company, now called NGT, pursuant to an order
from the Federal Energy Regulatory Commission (the "FERC")
approving the transfer. As a result of this transfer of assets,
liabilities and service obligations, the FERC now has
jurisdiction over NGT's interstate pipeline business, including
transportation services and certain of NGT's transactions with
affiliates of the Company, which historically were subject to
state regulatory oversight.
Effective February 1, 1995, after receipt of all necessary
authorization from the FERC, NFS assumed ownership and operation
of NGT's gathering assets pursuant to a transfer from NGT to NFS
of such assets. While the FERC provided for a two-year
gathering service option for existing customers under existing
terms and conditions, the scope of the FERC's jurisdiction over
-5-<PAGE>
NFS is limited, and NFS is not generally subject to traditional
cost-of-service rate regulation. These gathering assets consist
primarily of 3,500 miles of gathering pipeline which collect gas
from more than 200 separate systems in major producing fields in
Arkansas, Oklahoma, Louisiana and Texas.
NGT owns and operates a natural gas pipeline system located
in portions of Arkansas, Louisiana, Mississippi, Missouri,
Kansas, Oklahoma, Tennessee and Texas. The NGT system consists
of approximately 6,400 miles of transmission lines. The NGT
pipeline system extends generally in an easterly direction from
the Anadarko Basin area of the Texas Panhandle and western
Oklahoma through the Arkoma Basin area of eastern Oklahoma and
central Arkansas, from the mainline system in Oklahoma and
Arkansas to south central Kansas and southwest Missouri. In its
system, NGT operates various product extraction plants and
compressor facilities related to its transmission business.
The MRT system consists of approximately 2,200 miles of
pipeline serving principally the greater St. Louis area in
Missouri and Illinois. This pipeline system includes the "Main
Line System," the "East Line," and the "West Line." The Main
Line System includes three transmission lines extending
approximately 435 miles from Perryville, Louisiana, to the
greater St. Louis area. The East Line, also a main transmission
line, extends approximately 94 miles from southwestern Illinois
to St. Louis. The West Line extends approximately 140 miles from
east Texas to Perryville, Louisiana. The system also includes
various other branch, lateral, transmission and gathering lines
and compressor stations.
The Company owns and operates seven gas storage fields.
Four storage fields are associated with NGT's pipeline and have a
combined maximum deliverability of approximately 655 million
cubic feet ("MMcf") per day and a working gas capacity of
approximately 22.5 Bcf. Three storage fields are associated with
MRT's pipeline and have a maximum aggregate deliverability of
approximately 570 MMcf per day and a working gas capacity of
approximately 31 Bcf.
NES markets gas under daily, baseload and term agreements
which include either market sensitive or fixed pricing
provisions. Fixed price sales or purchase contracts are hedged
using gas futures contracts or other derivative financial
instruments. See Notes 1 and 11 of Notes to the Company's
Consolidated Financial Statements included in the Form 10-K.
On December 31, 1992, the Company completed the sale of
Arkla Exploration Company to Seagull Energy Corporation. The
sale terminated the Company's activities in the oil and gas
exploration and production business. On June 30, 1993 the
Company completed the sale of its intrastate pipeline businesses
as conducted by Louisiana Intrastate Gas Corporation and its
subsidiaries, LIG Chemical Company, LIG Liquids Corporation and
Tuscaloosa Pipeline to a subsidiary of Equitable Resources, Inc.
The Company's principal executive offices are located at
1600 Smith Street, 11th Floor, Houston, Texas 77002. Its
-6-<PAGE>
mailing address is P. O. Box 2628, Houston, Texas 77252-2628, and
its telephone number is (713) 654-5600.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the
net proceeds from the sale of the Securities will be used to
reduce the Company's indebtedness and for general corporate
purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
Six Months Year Ended
Ended December 31,
June 30, 1995 1994 1993 1992 1991 1990
Ratio of Earnings to
Fixed Charges
Including Preferred
Stock Dividends (1).... 1.90(2) 1.44 1.43 1.09 1.17 1.90
- ----------------------------
(1) The ratios of earnings to fixed charges Including Preferred
Stock Dividends have been computed using earnings which are
the sum of income from continuing operations, income taxes
and fixed charges including Preferred Stock Dividends.
Fixed charges are interest, amortization of debt discount
and expense and the estimated interest portion of rental
charges.
(2) Because of the seasonal nature of the Company's business,
the ratio for the six month period may not necessarily be
indicative of the ratio which will result for the full year
1995.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
(i) 250,000,000 shares of Common Stock, and (ii) 10,000,000
shares of Preferred Stock, of which 124,602,698 shares of Common
Stock and 2,600,000 shares of $3.00 Convertible Exchangeable
Preferred Stock, Series A ("Series A Preferred"), were issued and
outstanding at October 31, 1995. The following summary
description of these securities is qualified in its entirety by
reference to the Restated Certificate of Incorporation of the
Company ("Certificate") which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
Common Stock
Holders of the Common Stock are entitled to one vote for
each share held of record. The Company provides for cumulative
voting in the election of directors. Subject to the preferential
rights of the holders of Preferred Stock, the holders of Common
Stock are entitled to receive any dividends which may be declared
by the Company's Board of Directors out of funds legally
-7-<PAGE>
available therefor and to share pro rata in the net assets of the
Company upon liquidation. Holders of Common Stock have no
preemptive rights and have no rights to convert their Common
Stock into any other securities and there are no redemption
provisions with respect to such shares. All outstanding shares
of Common Stock are fully paid and not subject to further calls
or assessments. The Company's Common Stock is listed on the New
York Stock Exchange and prices are reported by the New York Stock
Exchange Composite Tape under the symbol NAE. The Transfer Agent
of the Company's Common Stock is Boatmen's Trust Company of
Arkansas and the Co-Transfer Agent is Mellon Securities Trust
Company and the Registrars are First Commercial Bank and Mellon
Securities Trust Company.
Preferred Stock
The following description of the terms of the Preferred
Stock sets forth certain general terms and provisions of the
Preferred Stock to which a Prospectus Supplement may relate.
Specific terms of any series of Preferred Stock offered by a
Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of Preferred Stock. The
description set forth below is subject to and qualified in its
entirety by reference to the Certificate and the form of
Certificate of Designations (the "Designation") establishing a
particular series of Preferred Stock.
General. Under the Certificate, the Board of Directors of
the Company (the "Board of Directors") is authorized, without
further shareholder action, to provide for the issuance of up to
10,000,000 shares of Preferred Stock, in one or more series, and
to fix the designations, terms, and relative rights and
preferences, including the dividend rate, voting rights,
conversion rights, redemption and sinking fund provisions and
liquidation values of each such series. The Company may amend
the Certificate from time to time to increase the number of
authorized shares of Preferred Stock. Any such amendment would
require the approval of the holders of a majority of the
outstanding shares of all series of Preferred Stock voting
together as a single class without regard to series. As of the
date of this Prospectus, the Company has one series of Preferred
Stock outstanding.
The Preferred Stock will have the dividend, liquidation,
redemption, conversion, and voting rights set forth below unless
otherwise provided in the Prospectus Supplement relating to a
particular series of Preferred Stock. Reference is made to the
Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including,
(i) the title and liquidation preference per share of such
Preferred Stock and the number of shares offered; (ii) the price
at which such Preferred Stock will be issued; (iii) the dividend
rate (or method of calculation), the dates on which dividends
shall be payable and the dates from which dividends shall
commence to accumulate; (iv) any redemption or sinking fund
provisions of such Preferred Stock; (v) any conversion or
exchange provisions of such Preferred Stock; (vi) the voting
rights, if any, of such Preferred Stock; and (vii) any additional
-8-<PAGE>
dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations, and restrictions of such
Preferred Stock. The Preferred Stock will, when issued, be fully
paid and nonassessable.
Dividend Rights. The Preferred Stock will be preferred over
the Common Stock as to payment of dividends. Before any
dividends or distributions on the Common Stock shall be declared
and set apart for payment or paid, the holders or shares of each
series of Preferred Stock shall be entitled to receive dividends
(either in cash, shares of Common Stock or Preferred Stock, or
otherwise) when, as, and if declared by the Board of Directors,
at the rate and on the date or dates as set forth in the
Prospectus Supplement. With respect to each series of Preferred
Stock, the dividends on each share of such series with respect to
which dividends are cumulative shall be cumulative from the date
of issue of such share unless some other date is set forth in the
Prospectus Supplement relating to any such series. Accruals of
dividends shall not bear interest.
Rights Upon Liquidation. The Preferred Stock shall be
preferred over the Common Stock as to assets so that the holders
of each series of Preferred Stock shall be entitled to be paid,
upon the voluntary or involuntary liquidation, dissolution, or
winding up of the Company, and before any distribution is made to
the holders of Common Stock, the amount set forth in the
Prospectus Supplement relating to any such series, but in such
case the holders of such series of Preferred Stock shall not be
entitled to any other or further payment. If upon any such
liquidation, dissolution, or winding up of the Company its net
assets shall be insufficient to permit the payment in full of the
respective amounts to which the holders of all outstanding
Preferred Stock are entitled, the entire remaining net assets of
the Company shall be distributed among the holders of each series
of Preferred Stock in amounts proportionate to the full amounts
to which the holders of each such series are respectively so
entitled.
Redemption and Conversion. All shares of any series of
Preferred Stock shall be redeemable to the extent set forth in
the Prospectus Supplement relating to any such series. All
shares of any series of Preferred Stock shall be convertible into
shares of Common Stock or into shares of any other series of
Preferred Stock to the extent set forth in the Prospectus
Supplement relating to any such series.
Voting Rights. All shares of any series of Preferred Stock
shall have the voting rights set forth in the Prospectus
Supplement relating to any such series.
Convertible Exchangeable Preferred Stock, Series A
In March 24, 1987, the Company issued 2,600,000 shares of
Series A Preferred Stock. Each share of Series A Preferred Stock
has a liquidation preference of $50 per share and is convertible
at the option of the holder at any time, unless previously
redeemed, into shares of Common Stock at a conversion price of
$28.625 per share of Common Stock, subject to adjustment in
-9-<PAGE>
certain events. The Series A Preferred Stock is redeemable for
cash at any time in whole or in part, at the option of the
Company, at redemption prices declining to $50 on March 15, 1997,
plus accrued dividends to the redemption date. Dividends on the
Series A Preferred Stock are cumulative and are payable quarterly
at a rate of $3.00 annually. The Series A Preferred Stock is
exchangeable, in whole but not in part, at the option of the
Company, on any dividend payment date for the Company's 6%
Convertible Subordinated Debentures due 2012 (the "Debentures")
at the rate of $50 principal amount of Debentures per share of
Series A Preferred Stock. The Debentures, if issued, will be
convertible at the option of the holder at any time, unless
previously redeemed, into shares of Common Stock at a price
equivalent to the conversion price applicable to the Series A
Preferred Stock for which the Debentures were exchanged, subject
to adjustment in certain events.
Certain Provisions of the Certificate and By-laws
Under the Certificate, holders of Common Stock are entitled
to cumulative voting rights for the election of Company
directors. Holders of Common Stock are not otherwise entitled to
cumulative voting rights. Under cumulative voting, a stockholder
may multiply the number of shares owned by the number of
directors to be elected, and cast that total number of votes in
any proportion among as many nominees as the stockholder desires.
The By-laws of the Company contain certain requirements
concerning advance notice of (i) nominations by stockholders of
persons for election to the Board, and (ii) other matters
introduced by stockholders at annual meetings.
PLAN OF DISTRIBUTION
The Company may sell the Securities to which this Prospectus
relates to or for resale to the public through one or more
underwriters, acting alone or in underwriting syndicates led by
one or more managing underwriters, and also may sell such
Securities directly to other purchasers or dealers or through
agents.
The distribution of Securities may be effected from time to
time in one or more transactions at a fixed price or prices,
which may be changed from time to time, at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution of
the Securities.
In connection with the sale of Securities, such
underwriters, dealers, and agents may receive compensation from
the Company, or from purchasers of Securities for whom they may
act as agents, in the form of discounts, concessions, or
commissions. Underwriters, dealers, and agents that participate
in the distribution of Securities and, in certain cases, direct
purchasers from the Company, may be deemed to be "underwriters"
and any discounts or commissions received by them and any profit
on the resale of Securities by them may be deemed to be
-10-<PAGE>
underwriting discounts and commissions under the Securities Act.
Any such underwriters, dealers, or agents will be identified and
any such compensation will be described in the applicable
Prospectus Supplement.
Under agreements which may be entered into by the Company,
underwriters, dealers, and agents who participate in the
distribution of Securities may be entitled to indemnification by
the Company against certain liabilities, including liabilities
under the Securities Act. The place and time of delivery for the
Securities in respect of which this Prospectus is delivered will
be set forth in the applicable Prospectus Supplement.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon
for the Company by Hubert Gentry, Jr., Senior Vice President and
General Counsel of the Company, P.O. Box 2628, Houston, Texas
77252. Mr. Gentry beneficially owns 39,805 shares of common
stock of the Company acquired pursuant to various employee
benefit plans of the Company.
EXPERTS
The consolidated balance sheets of the Company as of
December 31, 1994 and 1993 and the consolidated statements of
income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1994 incorporated by
reference in the Form 10-K, which is incorporated by reference in
this Prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and
auditing.
-11-<PAGE>
********************************************************************
*Information contained herein is subject to completion or *
*amendment. A registration statement relating to these securities *
*has been filed with the Securities and Exchange Commission. *
*These securities may not be sold nor may offers to buy be *
*accepted prior to the time the registration statement becomes *
*effective. This prospectus shall not constitute an offer to sell *
*or the solicitation of an offer to buy nor shall there be any *
*sale of these securities in any State in which such offer, *
*solicitation, or sale would be unlawful prior to registration or *
*qualification under the securities laws of any such State. *
********************************************************************
SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1995
PROSPECTUS
NORAM ENERGY CORP.
Subordinated Debt Securities
NORAM FINANCING I
NORAM FINANCING II
Preferred Securities
Guaranteed to the Extent Set Forth Herein by
NorAm Energy Corp.
---------------------------------------------
NorAm Financing I and NorAm Financing II, each a statutory
business trust formed under the laws of Delaware (each, a "NorAm
Trust"), may from time to time offer preferred securities
("Preferred Securities") evidencing undivided beneficial
interests in the assets of the respective NorAm Trust. The
payment of periodic cash distributions ("distributions") with
respect to Preferred Securities of each of the NorAm Trusts, out
of moneys held by each of the NorAm Trusts, and payments on
liquidation, redemption or otherwise with respect to such
Preferred Securities will be guaranteed by NorAm Energy Corp.
(the "Company") to the extent described herein (the "Preferred
Securities Guarantee"). The Company's obligations under the
Preferred Securities Guarantees will be subordinate and junior in
right of payment to all other liabilities of the Company and pari
passu with the most senior preferred stock issued by the Company.
Subordinated debt securities ("Subordinated Debt Securities") may
be issued and sold from time to time in one or more series by the
Company to a NorAm Trust in connection with the investment of the
proceeds from the offering of Preferred Securities and Common
Securities (as defined herein) of such NorAm Trust. The
Subordinated Debt Securities subsequently may be distributed pro
rata to holders of Preferred Securities and Common Securities in
connection with the dissolution of such NorAm Trust upon the
occurrence of certain events as may be described in the
Prospectus Supplement.
Specific terms of the particular Subordinated Debt
Securities of any series or the Preferred Securities of any NorAm
Trust in respect of which this Prospectus is being delivered (the
"Offered Securities") will be set forth in the accompanying
Prospectus Supplement with respect to such series of Subordinated
Debt Securities or such Preferred Securities, which will
describe, without limitation and where applicable the following:
(i) in the case of Subordinated Debt Securities, the specific
designation, aggregate principal amount, denomination, maturity,
premium, if any, interest rate (or the method of determining such
rate), if any, dates on which premium, if any, and interest, if
-1-<PAGE>
any, will be payable, any redemption provisions, any sinking fund
provisions, the initial public offering price, the conversion
terms (if any), the subordination terms, any listing on a
securities exchange and any other terms and (ii) in the case of
Preferred Securities, the specific designation, number of
Preferred Securities, distribution rate (or the method of
determining such rate), dates on which distributions will be
payable, liquidation amount, voting rights (if any), any
redemption provisions, terms for any conversion or exchange into
other securities (if any), the initial public offering price, any
listing on a securities exchange, and any other rights,
preferences, privileges, limitations and restrictions.
The Offered Securities may be offered in amounts, at prices
and on terms to be determined at the time of offering; provided,
however, that the aggregate initial public offering price of all
Offered Securities shall not exceed $500,000,000. The Prospectus
Supplement relating to any series of Offered Securities will
contain information concerning certain United States federal
income tax considerations, if applicable, to the Offered
Securities.
The Offered Securities will be sold directly, through
agents, underwriters or dealers as designated from time to time,
or through a combination of such methods. If agents or any
dealers or underwriters are involved in the sale of the Offered
Securities in respect of which this Prospectus is being
delivered, the names of such agents, dealers or underwriters and
any applicable commissions or discounts will be set forth in or
may be calculated from the Prospectus Supplement with respect to
such Offered Securities.
This Prospectus may not be used to consummate sales of
securities unless accompanied by a Prospectus Supplement.
- -----------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIESCOMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------
The date of this Prospectus is _________________, 1995.<PAGE>
No dealer, salesman or other person has been authorized to give
any information or to make any representation not contained in
this Prospectus or any Prospectus Supplement and, if given or
made, such information or representation must not be relied upon
as having been authorized by the Company or any underwriter or
agent. This Prospectus and any Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby and thereby in jurisdiction
to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall, under
any circumstances, create an implication that the information
herein or therein is correct as of any time subsequent to their
respective dates.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference
Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Certain securities
of the Company are listed on, and reports, proxy statements and
other information concerning the Company can be inspected at the
offices of, The New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
This Prospectus does not contain all of the information set
forth in the Registration Statement, of which this Prospectus is
a part, and exhibits relating thereto which the Company has filed
with the Commission under the Securities Act of 1933, as amended
(the "Act"). Reference is made to such Registration Statement
and to the exhibits relating thereto for further information with
respect to the Company and the Debt Securities offered hereby.
Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the copy
of the applicable document filed with the Commission.
No separate financial statements of the NorAm Trusts are
included herein. NorAm does not believe that such statements
would be material to holders of the Preferred Securities. The
NorAm Trusts are not currently subject to the informational
reporting requirements of the Exchange Act. The NorAm Trusts
will become subject to such requirements upon the effectiveness
of the Registration Statement of which this Prospectus forms a
part, although they intend to seek and expect to receive an
exemption therefrom.
-3-<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its
Annual Report on Form 10-K for the fiscal year ended December 31,
1994 (the "Form 10-K") and its Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995, June 30, 1995 and
[September 30, 1995] and its Current Reports on Form 8-K dated
August 3, 1995 and November 2, 1995, which have been filed
previously with the Commission under File No. 1-3751.
All documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of
the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement
contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any and all of the
foregoing documents incorporated by reference herein, other than
the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents).
Requests should be directed to the Office of the Secretary, NorAm
Energy Corp., P.O. Box 2628, Houston, Texas 77252, telephone
number (713) 654-5600.
THE NORAM FINANCING TRUSTS
Each of NorAm Financing I and NorAm Financing II is a
statutory business trust formed under Delaware law pursuant to
(i) a separate declaration of trust (each a "Declaration")
executed by the Company, as sponsor for such trust (the
"Sponsor") and the NorAm Trustees (as defined herein) for such
trust and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on November 2, 1995. Each NorAm
Trust exists for the exclusive purposes of (i) issuing the
Preferred Securities and common securities representing undivided
beneficial interests in the assets of such Trust (the "Common
Securities" and, together with the Preferred Securities, the
"Trust Securities"), (ii) investing the gross proceeds of the
Trust Securities in the Subordinated Debt Securities and
(iii) engaging in only those other activities necessary or
incidental thereto. All of the Common Securities will be
directly or indirectly owned by the Company. The Common
Securities will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities except that upon
an event of default under the Declaration, the rights of the
holders of the Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and
-4-<PAGE>
otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Company will, directly or
indirectly, acquire Common Securities in an aggregate liquidation
amount equal to 3% of the total capital of each NorAm Trust.
Each NorAm Trust has a term of approximately 55 years, but may
earlier terminate as provided in the Declaration. Each NorAm
Trust's business and affairs will be conducted by the trustees
(the "NorAm Trustees") appointed by the Company, as the direct or
indirect holder of all the Common Securities. The holder of the
Common Securities will be entitled to appoint, remove or replace
any of, or increase or reduce the number of, the NorAm Trustees
of a NorAm Trust. The duties and obligations of the NorAm
Trustees shall be governed by the Declaration of such NorAm
Trust. A majority of the NorAm Trustees (the "Regular Trustees")
of each NorAm Trust will be persons who are employees or officers
of or affiliated with the Company. In certain limited
circumstances set forth in a Prospectus Supplement, the holders
of a majority of the Preferred Securities will be entitled to
appoint one additional Regular Trustee, who need not be an
employee or officer of or otherwise affiliated with the Company.
One NorAm Trustee of each NorAm Trust will be a financial
institution which will be unaffiliated with the Company and which
shall act as property trustee and as indenture trustee for
purposes of the Trust Indenture Act of 1939 (the "Trust Indenture
Act"), pursuant to the terms set forth in a Prospectus Supplement
(the "Property Trustee"). In addition, unless the Property
Trustee maintains a principal place of business in the State of
Delaware, and otherwise meets the requirements of applicable law,
one NorAm Trustee of each NorAm Trust will have its principal
place of business or reside in the State of Delaware (the
"Delaware Trustee"). The Company will pay all fees and expenses
related to the NorAm Trusts and the offering of Trust Securities,
the payment of which will be guaranteed by the Company. The
office of the Delaware Trustee for each NorAm Trust in the State
of Delaware is 23 White Clay Center, Route 273, Newark, Delaware
19711. The principal place of business of each NorAm Trust shall
be c/o NorAm Energy Corp., 1600 Smith Street, 11th Floor,
Houston, Texas 77002.
THE COMPANY
NorAm Energy Corp., a Delaware corporation (the "Company"),
was incorporated in 1928 and is principally engaged in the
distribution and transmission of natural gas including gathering,
storage and marketing of natural gas. On May 10, 1994, the
stockholders of the Company approved an amendment to the
Company's Restated Certificate of Incorporation to change the
Company name from Arkla, Inc. to NorAm Energy Corp.
The Company's natural gas distribution business is conducted
through its three divisions, Arkla (formerly known as Arkansas
Louisiana Gas Company), Entex and Minnegasco, and their
affiliates, which collectively form the nation's third largest
gas distribution operation with over 500 billion cubic feet
("Bcf") of annual throughput to over 2.7 million customers.
Through these divisions and their affiliates, the Company engages
in both the natural gas distribution sales and transport
businesses. The facilities and terms of service related to
-5-<PAGE>
Arkla's, Entex's and Minnegasco's sales to their customers are
largely regulated by state public service commissions and, in
Texas, by municipalities.
The Company's natural gas transmission business
(collectively referred to as "Trading and Transportation") is
conducted principally through the following wholly-owned
subsidiaries of the Company: NorAm Gas Transmission Company
("NGT", formerly known as Arkla Energy Resources Company),
Mississippi River Transmission Corporation ("MRT"), NorAm Energy
Services, Inc. ("NES", formerly known as Arkla Energy Marketing
Company) and NorAm Field Services Corp. ("NFS", formerly known as
Arkla Gathering Services Company). Such subsidiaries form the
NorAm Trading and Transportation Group. Through these
subsidiaries and their affiliates, the Company engages in the
transmission and sale of natural gas, including gathering,
storage and marketing of natural gas. NGT and MRT are interstate
pipeline companies, NES serves as the Company's principal natural
gas supply aggregator and marketer and NFS owns and operates the
natural gas gathering assets previously held by NGT.
In March 1993, the Company transferred assets, liabilities
and service obligations of Arkla Energy Resources, formerly a
division of the Company, into a then newly-formed wholly-owned
subsidiary of the Company, now called NGT, pursuant to an order
from the Federal Energy Regulatory Commission (the "FERC")
approving the transfer. As a result of this transfer of assets,
liabilities and service obligations, the FERC now has
jurisdiction over NGT's interstate pipeline business, including
transportation services and certain of NGT's transactions with
affiliates of the Company, which historically were subject to
state regulatory oversight.
Effective February 1, 1995, after receipt of all necessary
authorization from the FERC, NFS assumed ownership and operation
of NGT's gathering assets pursuant to a transfer from NGT to NFS
of such assets. While the FERC provided for a two-year
gathering service option for existing customers under existing
terms and conditions, the scope of the FERC's jurisdiction over
NFS is limited, and NFS is not generally subject to traditional
cost-of-service rate regulation. These gathering assets consist
primarily of 3,500 miles of gathering pipeline which collect gas
from more than 200 separate systems in major producing fields in
Arkansas, Oklahoma, Louisiana and Texas.
NGT owns and operates a natural gas pipeline system located
in portions of Arkansas, Louisiana, Mississippi, Missouri,
Kansas, Oklahoma, Tennessee and Texas. The NGT system consists
of approximately 6,400 miles of transmission lines. The NGT
pipeline system extends generally in an easterly direction from
the Anadarko Basin area of the Texas Panhandle and western
Oklahoma through the Arkoma Basin area of eastern Oklahoma and
central Arkansas, from the mainline system in Oklahoma and
Arkansas to south central Kansas and southwest Missouri. In its
system, NGT operates various product extraction plants and
compressor facilities related to its transmission business.
-6-<PAGE>
The MRT system consists of approximately 2,200 miles of
pipeline serving principally the greater St. Louis area in
Missouri and Illinois. This pipeline system includes the "Main
Line System," the "East Line," and the "West Line." The Main
Line System includes three transmission lines extending
approximately 435 miles from Perryville, Louisiana, to the
greater St. Louis area. The East Line, also a main transmission
line, extends approximately 94 miles from southwestern Illinois
to St. Louis. The West Line extends approximately 140 miles from
east Texas to Perryville, Louisiana. The system also includes
various other branch, lateral, transmission and gathering lines
and compressor stations.
The Company owns and operates seven gas storage fields.
Four storage fields are associated with NGT's pipeline and have a
combined maximum deliverability of approximately 655 million
cubic feet ("MMcf") per day and a working gas capacity of
approximately 22.5 Bcf. Three storage fields are associated with
MRT's pipeline and have a maximum aggregate deliverability of
approximately 570 MMcf per day and a working gas capacity of
approximately 31 Bcf.
NES markets gas under daily, baseload and term agreements
which include either market sensitive or fixed pricing
provisions. Fixed price sales or purchase contracts are hedged
using gas futures contracts or other derivative financial
instruments. See Notes 1 and 11 of Notes to the Company's
Consolidated Financial Statements included in the Form 10-K.
On December 31, 1992, the Company completed the sale of
Arkla Exploration Company to Seagull Energy Corporation. The
sale terminated the Company's activities in the oil and gas
exploration and production business. On June 30, 1993 the
Company completed the sale of its intrastate pipeline businesses
as conducted by Louisiana Intrastate Gas Corporation and its
subsidiaries, LIG Chemical Company, LIG Liquids Corporation and
Tuscaloosa Pipeline to a subsidiary of Equitable Resources, Inc.
The Company's principal executive offices are located at
1600 Smith Street, 11th Floor, Houston, Texas 77002. Its
mailing address is P. O. Box 2628, Houston, Texas 77252-2628, and
its telephone number is (713) 654-5600.
RATIOS OF EARNINGS TO FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
Six Months Year Ended
Ended December 31,
June 30,
1995 1994 1993 1992 1991 1990
Ratio of Earnings to
Fixed Charges
Including Preferred
Stock Dividends(1)..... 1.90(2) 1.44 1.43 1.09 1.17 1.90
- --------------------------
(1) The ratios of earnings to fixed charges have been computed
using earnings which are the sum of income from continuing
-7-<PAGE>
operations, income taxes and fixed charges. Fixed charges
are interest, amortization of debt discount and expense and
the estimated interest portion of rental charges.
(2) Because of the seasonal nature of the Company's business,
the ratio for the six month period may not necessarily be
indicative of the ratio which will result for the full year
1995.
USE OF PROCEEDS
Each NorAm Trust will invest all proceeds received from the
sale of its Trust Securities in Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement, the
Company will apply the net proceeds from the sale of the
Subordinated Debt Securities to its general funds.
The summaries set forth below and in the applicable
Prospectus Supplement address the material terms of the Preferred
Securities but do not purport to be complete and are subject to,
and qualified in their entirety by reference to, the applicable
Declaration.
DESCRIPTION OF THE PREFERRED SECURITIES
Each NorAm Trust may issue, from time to time, only one
series of Preferred Securities having terms described in the
Prospectus Supplement relating thereto. The Declaration of each
NorAm Trust authorizes the Regular Trustees of such NorAm Trust
to issue on behalf of such NorAm Trust one series of Preferred
Securities. The Declaration will be qualified as an indenture
under the Trust Indenture Act. The Preferred Securities will
have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other
special rights or such restrictions as shall be set forth in the
Declaration or made part of the Declaration by the Trust
Indenture Act. Reference is made to the Prospectus Supplement
relating to the Preferred Securities of the Company for specific
terms, including (i) the distinctive designation of such
Preferred Securities; (ii) the number of Preferred Securities
issued by such NorAm Trust; (iii) the annual distribution rate
(or method of determining such rate) for Preferred Securities
issued by such NorAm Trust and the date or dates upon which such
distributions shall be payable; provided, however, that
distributions on such Preferred Securities shall be payable on a
quarterly basis to holders of such Preferred Securities as of a
record date in each quarter during which such Preferred
Securities are outstanding; (iv) whether distributions on
Preferred Securities issued by such NorAm Trust shall be
cumulative, and, in the case of Preferred Securities having such
cumulative distribution rights, the date or dates or method of
determining the date or dates from which distributions on
Preferred Securities issued by such NorAm Trust shall be
cumulative; (v) the amount or amounts which shall be paid out of
the assets of such NorAm Trust to the holders of Preferred
Securities of such NorAm Trust upon voluntary or involuntary
dissolution, winding-up or termination of such NorAm Trust;
(vi) the obligation, if any, of such NorAm Trust to purchase or
-8-<PAGE>
redeem Preferred Securities issued by such NorAm Trust and the
price or prices at which, the period or periods within which, and
the terms and conditions upon which, Preferred Securities issued
by such NorAm Trust shall be purchased or redeemed, in whole or
in part, pursuant to such obligation; (vii) the voting rights, if
any, of Preferred Securities issued by such NorAm Trust in
addition to those required by law, including the number of votes
per Preferred Security and any requirement for the approval by
the holders of Preferred Securities, or of Preferred Securities
issued by one or more NorAm Trusts, or of both, as a condition to
specified action or amendments to the Declaration of such NorAm
Trust; (viii) the terms and conditions, if any, upon which
Preferred Securities issued by such NorAm Trust may be converted
into shares of NorAm Common Stock, including the conversion price
per share and the circumstances, if any, under which any such
conversion right shall expire; (ix) the terms and conditions, if
any, upon which the Subordinated Debt Securities may be
distributed to holders of Preferred Securities; (x) if
applicable, any securities exchange upon which the Preferred
Securities shall be listed; and (xi) any other relevant rights,
preferences, privileges, limitations or restrictions of Preferred
Securities issued by such NorAm Trust not inconsistent with the
Declaration of such NorAm Trust or with applicable law. All
Preferred Securities offered hereby will be guaranteed by the
Company to the extent set forth below under "Description of the
Preferred Securities Guarantees." Any United States federal
income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Preferred Securities,
each NorAm Trust will issue one series of Common Securities. The
Declaration of each NorAm Trust authorizes the Regular Trustees
of such trust to issue on behalf of such NorAm Trust one series
of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities
issued by a NorAm Trust will be substantially identical to the
terms of the Preferred Securities issued by such trust and the
Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities except that, upon
an event of default under the Declaration, the rights of the
holders of the Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of
the Preferred Securities. Except in certain limited
circumstances, the Common Securities will also carry the right to
vote to appoint, remove or replace any of the NorAm Trustees of a
NorAm Trust. All of the Common Securities of each NorAm Trust
will be directly or indirectly owned by the Company.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the
Preferred Securities Guarantees which will be executed and
delivered by the Company for the benefit of the holders from time
to time of Preferred Securities. Each Preferred Securities
Guarantee will be qualified as an indenture under the Trust
-9-<PAGE>
Indenture Act. The Bank of New York will act as indenture
trustee under each Preferred Securities Guarantee (the "Preferred
Guarantee Trustee"). The terms of each Preferred Securities
Guarantee will be those set forth in such Preferred Securities
Guarantee and those made part of such Preferred Securities
Guarantee by the Trust Indenture Act. The summary does not
purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to,
the form of Preferred Securities Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. Each Guarantee will
be held by the Preferred Guarantee Trustee for the benefit of the
holders of the Preferred Securities of the applicable NorAm
Trust.
General
Pursuant to each Preferred Securities Guarantee, the Company
will irrevocably and unconditionally agree, to the extent set
forth therein, to pay in full, to the holders of the Preferred
Securities issued by a NorAm Trust, the Guarantee Payments (as
defined herein)(except to the extent paid by such NorAm Trust),
as and when due, regardless of any defense, right of set-off or
counterclaim which such NorAm Trust may have or assert. The
following payments with respect to Preferred Securities issued by
a NorAm Trust to the extent not paid by such NorAm Trust (the
"Guarantee Payments"), will be subject to the Preferred
Securities Guarantee thereon (without duplication): (i) any
accrued and unpaid distributions which are required to be paid on
such Preferred Securities, to the extent such NorAm Trust shall
have funds available therefor; (ii) the redemption price,
including all accrued and unpaid distributions (the "Redemption
Price"), to the extent such NorAm Trust has funds available
therefor with respect to any Preferred Securities called for
redemption by such NorAm Trust and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of such NorAm
Trust (other than in connection with the distribution of
Subordinated Debt Securities to the holders of Preferred
Securities or the redemption of all of the Preferred Securities),
the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Preferred Securities to
the date of payment, to the extent such NorAm Trust has funds
available therefor and (b) the amount of assets of such NorAm
Trust remaining available for distribution to holders of such
Preferred Securities in liquidation of such NorAm Trust. The
Company's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Company to the
holders of Preferred Securities or by causing the applicable
NorAm Trust to pay such amounts to such holders.
Each Preferred Securities Guarantee will be a full and
unconditional guarantee with respect to the Preferred Securities
issued by the applicable NorAm Trust, but will not apply to any
payment of distributions except to the extent such NorAm Trust
shall have funds available therefor. If the Company does not
make interest payments on the Subordinated Debt Securities
purchased by a NorAm Trust, such NorAm Trust will not pay
distributions on the Preferred Securities issued by such NorAm
-10-<PAGE>
Trust and will not have funds available therefor. See
"Description of the Subordinated Debt Securities -- Certain
Covenants."
The Company has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the NorAm Trusts
with respect to the Common Securities (the "Common Securities
Guarantees") to the same extent as the Preferred Securities
Guarantee, except that upon an event of default under the
Indenture, holders of Preferred Securities shall have priority
over holders of Common Securities with respect to distributions
and payments on liquidation, redemption or otherwise.
Certain Covenants of the Company
In each Preferred Securities Guarantee, the Company will
covenant that, so long as any Preferred Securities issued by the
applicable NorAm Trust remain outstanding, if there shall have
occurred any event that would constitute an event of default
under such Preferred Securities Guarantee or the Declaration of
such NorAm Trust, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or
redeem, purchase or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or
acquisitions of shares of NorAm Common Stock in connection with
the satisfaction by NorAm of its obligations under any employee
benefit plans or the satisfaction by NorAm of its obligations
pursuant to any contract or security requiring NorAm to purchase
shares of NorAm Common Stock, (ii) as a result of a
reclassification of NorAm capital stock or the exchange or
conversion of one class or series of NorAm's capital stock for
another class or series of NorAm capital stock or, (iii) the
purchase of fractional interests in shares of NorAm's capital
stock pursuant to the conversion or exchange provisions of such
NorAm capital stock or the security being converted or exchanged)
or make any guarantee payments with respect to the foregoing) and
(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 which
rank pari passu with or junior to such Subordinated Debt
Securities.
Modification of the Preferred Securities Guarantees; Assignment
Except with respect to any changes which do not adversely
affect the rights of holders of Preferred Securities (in which
case no vote will be required), each Preferred Securities
Guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities issued by the applicable NorAm
Trust. The manner of obtaining any such approval of holders of
such Preferred Securities will be as set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained
in a Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the holders of the Preferred
Securities of the applicable NorAm Trust then outstanding.
-11-<PAGE>
Termination
Each Preferred Securities Guarantee will terminate as to the
Preferred Securities issued by the applicable NorAm Trust (a)
upon full payment of the Redemption Price of all Preferred
Securities of such NorAm Trust, (b) upon distribution of the
Subordinated Debt Securities held by such NorAm Trust to the
holders of the Preferred Securities of such NorAm Trust or (c)
upon full payment of the amounts payable in accordance with the
Declaration of such NorAm Trust upon liquidation of such NorAm
Trust. Each 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 issued by the applicable
NorAm Trust must restore payment of any sums paid under such
Preferred Securities or such Preferred Securities Guarantee.
Events of Default
An event of default under a Preferred Securities Guarantee
will occur upon (a) the failure of the Company to perform any of
its payment or other obligations thereunder or (b) if applicable,
the failure by the Company to deliver NorAm Common Stock upon an
appropriate election by the holder or holders of Preferred
Securities to convert the Preferred Securities into shares of
NorAm Common Stock.
The holders of a majority in liquidation amount of the
Preferred Securities relating to such Preferred Securities
Guarantee have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee in respect of the Preferred
Securities Guarantee or to direct the exercise of any trust or
power conferred upon the Preferred Guarantee Trustee under such
Preferred Securities Guarantee. If the Preferred Guarantee
Trustee fails to enforce such Preferred Securities Guarantee, any
holder of Preferred Securities relating to such Preferred
Securities Guarantee may institute a legal proceeding directly
against the Company to enforce the Preferred Guarantee Trustee's
rights under such Preferred Securities Guarantee, without first
instituting a legal proceeding against the relevant NorAm Trust,
the Preferred Guarantee Trustee or any other person or entity.
The Company waives any right or remedy to require that any action
be brought first against such NorAm Trust or any other person or
entity before proceeding directly against the Company.
Status of the Preferred Securities Guarantees
The Preferred Securities Guarantees will constitute
unsecured obligations of the Company and will rank
(i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the
Company and with any guarantee now or hereafter entered into by
NorAm in respect of any preferred or preference stock of any
affiliate of the Company; and (iii) senior to the Company's
common stock. The terms of the Preferred Securities provide that
each holder of Preferred Securities issued by the applicable
NorAm Trust by acceptance thereof agrees to the subordination
-12-<PAGE>
provisions and other terms of the Preferred Securities Guarantee
relating thereto.
The Preferred Securities Guarantees will constitute a
guarantee of payment and not of collection (that is, the
guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the guarantee
without instituting a legal proceeding against any other person
or entity).
Information Concerning the Preferred Guarantee Trustee
The Preferred Guarantee Trustee, prior to the occurrence of
a default with respect to a Preferred Securities Guarantee,
undertakes to perform only such duties as are specifically set
forth in such Preferred Securities Guarantee and, after default,
shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject
to such provisions, the Preferred Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a
Preferred Securities Guarantee at the request of any holder of
Preferred Securities, unless offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred
thereby.
The Company and certain of its affiliates maintain a banking
relationship with the Preferred Guarantee Trustee.
Governing Law
The Preferred Securities Guarantees will be governed by and
construed in accordance with the internal laws of the State of
New York.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Subordinated Debt Securities may be issued from time to time
in one or more series under an Indenture (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the
"Debt Trustee"). The terms of the Subordinated Debt Securities
will include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act. The
following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its
entirety by reference to, the Indenture, which is filed as an
exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. Whenever particular
provisions or defined terms in the Indenture are referred to
herein, such provisions or defined terms are incorporated by
reference herein. Section and Article references used herein are
references to provisions of the Indenture unless otherwise noted.
General
The Subordinated Debt Securities will be unsecured,
subordinated obligations of the Company. The Indenture does not
limit the aggregate principal amount of Subordinated Debt
Securities which may be issued thereunder and provides that the
-13-<PAGE>
Subordinated Debt Securities may be issued from time to time in
one or more series. The Subordinated Debt Securities are
issuable in one or more series pursuant to an indenture
supplemental to the Indenture or a resolution of the Company's
Board of Directors or a special committee thereof (each, a
"Supplemental Indenture") (Section 2.1).
In the event Subordinated Debt Securities are issued to a
NorAm Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such NorAm Trust, such
Subordinated Debt Securities subsequently may be distributed pro
rata to the holders of such Trust Securities in connection with
the dissolution of such NorAm Trust upon the occurrence of
certain events described in the Prospectus Supplement relating to
such Trust Securities. Only one series of Subordinated Debt
Securities will be issued to a NorAm Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such
NorAm Trust.
Reference is made to the Prospectus Supplement which will
accompany this Prospectus for the following terms of the series
of Subordinated Debt Securities being offered thereby: (i) the
specific title of such Subordinated Debt Securities; (ii) any
limit on the aggregate principal amount of such Subordinated Debt
Securities; (iii) the date or dates on which the principal of
such Subordinated Debt Securities is payable and the right, if
any, to extend such date or dates; (iv) the rate or rates at
which such Subordinated Debt Securities will bear interest or the
method of determination of such rate or rates; (v) the date or
dates from which such interest shall accrue, the interest payment
dates on which such interest will be payable or the manner of
determination of such interest payment dates and the record dates
for the determination of holders to whom interest is payable on
any such interest payment dates; (vi) the right, if any, to
extend the interest payment periods and the duration of such
extension; (vii) the period or periods within which, the price or
prices at which, and the terms and conditions upon which, such
Subordinated Debt Securities may be redeemed, in whole or in
part, at the option of the Company; (viii) the right and/or
obligation, if any, of the Company to redeem or purchase such
Subordinated Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of the holder thereof and
the period or periods for which, the price or prices at which,
and the terms and conditions upon which, such Subordinated Debt
Securities shall be redeemed or purchased, in whole or part,
pursuant to such right and/or obligation; (ix) the terms and
conditions, if any, upon which the Subordinated Debt Securities
may be converted into shares of NorAm Common Stock, including the
conversion price and the circumstances, if any, under which such
conversion right shall expire; (x) the terms of subordination;
(xi) the form of such Subordinated Debt Securities; (xii) if
other than denominations of $25 or any integral multiple thereof,
the denominations in which such Subordinated Debt Securities
shall be issuable; (xiii) any and all other terms with respect to
such series; and (xiv) whether such Subordinated Debt Securities
are issuable as a global security, and in such case, the identity
of the depositary. (Section 2.1).
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The Indenture does not contain any provisions that afford
holders of Subordinated Debt Securities protection in the event
of a highly leveraged transaction involving the Company.
Subordination
The Subordinated Debt Securities will be subordinated and
junior in right of payment to certain other indebtedness of the
Company to the extent set forth in the Prospectus Supplement that
will accompany this Prospectus.
Certain Covenants
If Subordinated Debt Securities are issued to a NorAm Trust
or a trustee of such trust in connection with the issuance of
Trust Securities by such NorAm Trust and (i) there shall have
occurred any event that would constitute an Event of Default or
(ii) the Company shall be in default with respect to its payment
of any obligations under the related Preferred Securities
Guarantee or Common Securities Guarantee, then (a) the Company
shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of NorAm Common Stock in
connection with the satisfaction by NorAm of its obligations
under any employee benefit plans or the satisfaction by NorAm of
its obligations pursuant to any contract or security requiring
NorAm to purchase shares of NorAm Common Stock, (ii) as a result
of a reclassification of NorAm capital stock or the exchange or
conversion of one class or series of NorAm's capital stock for
another class or series of Nor Am capital stock or, (iii) the
purchase of fractional interests in shares of NorAm's capital
stock pursuant to the conversion or exchange provisions of such
NorAm capital stock or the security being converted or exchanged)
or make any guarantee payments with respect to the foregoing),
and (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
which rank pari passu with or junior to such Subordinated Debt
Securities.
If Subordinated Debt Securities are issued to a NorAm Trust
or a trustee of such trust in connection with the issuance of
Trust Securities by such NorAm Trust and the Company shall have
given notice of its election to defer payments of interest on
such Subordinated Debt Securities by extending the interest
payment period as provided in the Indenture and such period, or
any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, and (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 which
rank pari passu with or junior to such Subordinated Debt
Securities.
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In the event Subordinated Debt Securities are issued to a
NorAm Trust or a trustee of such trust in connection with the
issuance of Trust Securities of such NorAm Trust, for so long as
such Trust Securities remain outstanding, the Company will
covenant (i) to directly or indirectly maintain 100% ownership of
the Common Securities of such NorAm Trust; provided, however,
that any permitted successor of the Company under the Indenture
may succeed to the Company's ownership of such Common Securities
the Company, (ii) to use its reasonable efforts to cause such
NorAm Trust (a) to remain a statutory business trust, except in
connection with the distribution of Subordinated Debt Securities
to the holders of Trust Securities in liquidation of such NorAm
Trust, the redemption of all of the Trust Securities of such
NorAm Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration of such NorAm Trust, and
(b) to otherwise continue not to be classified as an association
taxable as a corporation or partnership for United States federal
income tax purposes and (iii) to use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an
undivided beneficial interest in the Subordinated Debt
Securities. (Section 4.7).
Form, Exchange, Registration and Transfer
Subordinated Debt Securities of each series will be issued
in registered form and in either certificated form or represented
by one or more global securities. If not represented by one or
more global securities, Subordinated Debt Securities may be
presented for registration of transfer (with the form of transfer
endorsed thereon duly executed) or exchange, at the office of the
Debenture Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to any
series of Subordinated Debt Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon
payment of any taxes and other governmental charges as described
in the Indenture. Such transfer or exchange will be effected
upon the Debenture Registrar or such transfer agent, as the case
may be, being satisfied with the documents of title and identity
of the person making the request. The Company has appointed the
Debt Trustee as Debenture Registrar with respect to the
Subordinated Debt Securities. (Section 2.5). If a Prospectus
Supplement refers to any transfer agents (in addition the
Debenture Registrar) initially designated by the Company with
respect to any series of Subordinated Debt Securities, the
Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which
any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each Place of Payment
for such series. (Section 4.2). The Company may at any time
designate additional transfer agents with respect to any series
of Subordinated Debt Securities.
In the event of any redemption in part, the Company shall
not be required to (i) issue, register the transfer of or
exchange any Subordinated Debt Securities during a period
beginning at the opening of business 15 days before any selection
for redemption of Subordinated Debt Securities of like tenor and
of the series of which such Subordinated Debt Securities are a
-16-<PAGE>
part, and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been
given to all holders of Subordinated Debt Securities of like
tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Subordinated Debt Securities so
selected for redemption, in whole or in part, except the
unredeemed portion of any Subordinated Debt Securities being
redeemed in part. (Section 2.5).
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of and premium (if any) on any
Subordinated Debt Securities will be made only against surrender
to the Paying Agent of such Subordinated Debt Securities. Unless
otherwise indicated in an applicable Prospectus Supplement,
principal of and any premium and interest, if any, on
Subordinated Debt Securities will be payable, subject to any
applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as the Company may designate from time to
time, except that at the option of the Company payment of any
interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Debenture
Register with respect to such Subordinated Debt Securities.
(Section 4.3). Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on a Subordinated Debt
Security on any Interest Payment Date will be made to the person
in whose name such Subordinated Debt Security (or predecessor
security) is registered at the close of business on the Regular
Record Date for such interest payment. (Section 2.3).
The Company will act as Paying Agent with respect to the
Subordinated Debt Securities. The Company may at any time
designate additional Paying Agents or rescind the designation of
any Paying Agents or approve a change in the office through which
any Paying Agent acts, except that the Company will be required
to maintain a Paying Agent in each Place of Payment for each
series of the respective Subordinated Debt Securities.
(Sections 4.2 and 4.3).
All moneys paid by the Company to a Paying Agent for the
payment of the principal of or premium or interest, if any, on
any Subordinated Debt Securities of any series which remain
unclaimed at the end of two years after such principal, premium,
if any, or interest shall have become due and payable will be
repaid to the Company and the holder of such Subordinated Debt
Securities will thereafter look only to the Company for payment
thereof. (Section 11.5).
Global Securities
If any Subordinated Debt Securities of a series are
represented by one or more global securities (each, a "Global
Security"), the applicable Prospectus Supplement will describe
the circumstances, if any, under which beneficial owners of
interests in any such Global Security may exchange such interests
for Subordinated Debt Securities of such series and of like tenor
and principal amount in any authorized form and denomination.
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Principal of and any premium and interest on a Global Security
will be payable in the manner described in the applicable
Prospectus Supplement. (Section 2.11).
The specific terms of the depositary arrangement with
respect to any portion of a series of Subordinated Debt
Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement.
Modification of the Indenture
The Indenture contains provisions permitting the Company and
the Debt Trustee, with the consent of the holders of not less
than a majority in principal amount of the Subordinated Debt
Securities of each series which are affected by the modification,
to modify the Indenture or any supplemental indenture affecting
that series or the rights of the holders of that series of
Subordinated Debt Securities; provided that no such modification
may, without the consent of the holder of each outstanding
Subordinated Debt Security affected thereby, (i) extend the fixed
maturity of any Subordinated Debt Securities of any series, or
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 Subordinated Debt Security so affected or
(ii) reduce the percentage of Subordinated Debt Securities, the
holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of each then
outstanding Subordinated Debt Security affected thereby.
(Section 9.2).
In addition, the Company and the Debt Trustee may execute,
without the consent of any holder of Subordinated Debt
Securities, any supplemental indenture for certain other usual
purposes including the creation of any new series of Subordinated
Debt Securities. (Sections 2.1, 9.1 and 10.1).
Events of Default
The Indenture provides that any one or more of the following
described events which has occurred and is continuing constitutes
an "Event of Default" with respect to each series of Subordinated
Debt Securities:
(a) failure for 90 days to pay interest on the
Subordinated Debt Securities of that series, including any
Additional Interest in respect thereof, when due; provided,
however, that a valid extension of the interest payment
period by the Company shall not constitute a default in the
payment of interest for this purpose; or
(b) failure to pay principal or premium, if any, on
the Subordinated Debt Securities of that series when due
whether at maturity, upon redemption by declaration or
otherwise, or to make any sinking fund payment with respect
to that series; provided, however, that a valid extension of
the maturity of such Subordinated Debt Securities shall not
constitute a default for this purpose; or
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(c) if applicable, failure by the Company to deliver
NorAm Common Stock upon an appropriate election by the
holder or holders of Preferred Securities to convert the
Preferred Securities into shares of NorAm Common Stock; or
(d) failure to observe or perform any other covenant
(other than those specifically relating to another series)
contained in the Indenture for 90 days after written notice
to the Company from the Debt Trustee or the holders of at
least 25% in principal amount of the outstanding
Subordinated Debt Securities of that series; or
(e) certain events in bankruptcy, insolvency or
reorganization of the Company; or
(f) in the event Subordinated Debt Securities are
issued to a NorAm Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such
NorAm Trust, the voluntary or involuntary dissolution,
winding-up or termination of such NorAm Trust, except in
connection with the distribution of Subordinated Debt
Securities to the holders of Trust Securities in liquidation
of such NorAm Trust, the redemption of all of the Trust
Securities of such NorAm Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the
Declaration of such NorAm Trust. (Section 6.1).
The holders of a majority in aggregate outstanding principal
amount of any series of the Subordinated Debt Securities have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Debt Trustee for that
series. (Section 6.6). The Debt Trustee or the holders of not
less than 25% in aggregate outstanding principal amount of any
particular series of the Subordinated Debt Securities may declare
the principal due and payable immediately on default with respect
to such series, but the holders of a majority in aggregate
outstanding principal amount of such series may annul such
declaration and waive the default with respect to such series if
the default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than
by acceleration and any applicable premium has been deposited
with the Debt Trustee. (Sections 6.1 and 6.6).
The holders of a majority in aggregate outstanding principal
amount of any series of the Subordinated Debt Securities affected
thereby may, on behalf of the holders of all the Subordinated
Debt Securities of such series, waive any past default, except
(i) a default in the payment of principal, premium, if any, or
interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due
otherwise than by acceleration and any applicable premium has
been deposited with the Debt Trustee) or (ii) a default in the
covenants described in the first or second paragraph under "--
Certain Covenants." (Section 6.6).
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Consolidation, Merger and Sale
The Indenture does not contain any covenant which restricts
the ability of the Company to merge or consolidate with or into
any other corporation, sell or convey all or substantially all of
its assets to any person, firm or corporation or otherwise engage
in restructuring transactions. (Section 10.1).
Defeasance and Discharge
Under the terms of the Indenture, the Company will be
discharged from any and all obligations in respect of the
Subordinated Debt Securities of any series (except in each case
for certain obligations to register the transfer or exchange of
Subordinated Debt Securities, replace stolen, lost or mutilated
Subordinated Debt Securities, maintain paying agencies and hold
moneys for payment in trust) if the Company deposits with the
Debt Trustee, in trust, moneys or Government Obligations, in an
amount sufficient to pay all the principal of, and interest on,
the Subordinated Debt Securities of such series on the dates such
payments are due in accordance with the terms of such
Subordinated Debt Securities. (Section 11.1).
Governing Law
The Indenture and the Subordinated Debt Securities will be
governed by, and construed in accordance with, the internal laws
of the State of New York. (Section 13.5).
Information Concerning the Debt Trustee
The Debt Trustee, prior to default, undertakes to perform
only such duties as are specifically set forth in the Indenture
and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her
own affairs. (Section 7.1). Subject to such provision, the Debt
Trustee is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of
Subordinated Debt Securities, unless offered reasonable indemnity
by such holder against the costs, expenses and liabilities which
might be incurred thereby. (Section 7.2). The Debt Trustee is
not required to expand or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if
the Debt Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.1).
The Company and certain of its affiliates maintain a banking
relationship with the Debt Trustee.
Miscellaneous
The Company will have the right at all times to assign any
of their respective rights or obligations under the Indenture to
a direct or indirect wholly-owned subsidiary of the Company;
provided that, in the event of any such assignment, the Company
will remain liable for all of their respective obligations.
Subject to the foregoing, the Indenture will be binding upon and
inure to the benefit of the parties thereto and their respective
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successors and assigns. The Indenture provides that it may not
otherwise be assigned by the parties thereto. (Section 13.12).
PLAN OF DISTRIBUTION
The Company may sell any series of Subordinated Debt
Securities and the NorAm Trusts may sell the Preferred Securities
being offered hereby in one or more of the following ways from
time to time: (i) to underwriters for resale to the public or to
institutional investors; (ii) directly to institutional
investors; or (iii) through agents to the public or to
institutional investors. The Prospectus Supplement with respect
to any Offered Securities will set forth the terms of the
offering of such Offered Securities, including the name or names
of any underwriters or agents, the purchase price of such Offered
Securities and the proceeds to the Company or the applicable
NorAm Trust, as the case may be, from such sale, any underwriting
discounts or agency fees and other item's constituting
underwriters' or agents' compensation, any initial public
offering price, any discounts or concessions allowed or reallowed
or paid to dealers and any securities exchanges on which such
Offered Securities may be listed.
If underwriters are used in the sale, such Offered
Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time
of sale.
Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase any series of Offered
Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all of such series
of Offered Securities, if any are purchased.
Underwriters and agents may be entitled under agreements
entered into with the Company and/or a NorAm Trust to
indemnification by the Company and/or such NorAm Trust against
certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which
the underwriters or agents may be required to make in respect
thereof. Underwriters and agents may be customers of, engage in
transactions with, or perform services for the Company and its
affiliates in the ordinary course of business.
Each series of Offered Securities will be a new issue of
securities and will have no established trading market. Any
underwriters to whom Offered Securities are sold by a NorAm Trust
for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice.
The Offered Securities may or may not be listed on a national
securities exchange.
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VALIDITY OF OFFERED SECURITIES
Certain matters of Delaware law relating to the validity of
the Preferred Securities, the Preferred Securities Guarantees,
Subordinated Debt Securities and certain United States federal
income taxation matters will be passed upon by Skadden, Arps,
Slate, Meagher & Flom, special counsel to the Company.
EXPERTS
The consolidated balance sheets of the Company as of
December 31, 1994 and 1993 and the consolidated statements of
income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1994 incorporated by
reference in the Form 10-K, which is incorporated by reference in
this Prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and
auditing.
-22-<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses to be
paid by the registrant in connection with the sale and
distribution of the securities being registered hereby, other
than underwriting discounts and commissions. All amounts are
estimated except for the Securities and Exchange Commission
registration fee.
Amount
Securities and Exchange Commission Registration $172,414
Fee . . . . . . . . . . . . . . . . . . . . . .
Printing Fees . . . . . . . . . . . . . . . . .
Trustee Fees and Expenses . . . . . . . . . . .
Accountant's Fees and Expenses . . . . . . . .
Legal Fees and Expenses . . . . . . . . . . . .
Blue Sky Fees and Expenses . . . . . . . . . .
Miscellaneous . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . $172,414
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware (the
"DGCL") gives corporations the power to indemnify officers and
directors under certain circumstances.
Article III of the Company's By-Laws provides for
indemnification of officers and directors to the extent permitted
by the DGCL. The Company also has policies insuring its officers
and directors against certain liabilities for action taken in
such capacities, including liabilities under the Act.
Article Seventh of the Company's Restated Certificate of
Incorporation, as amended, adopted the provision of Delaware law
limiting or eliminating the potential monetary liability of
directors to the Company or its stockholders for breaches of a
director's fiduciary duty of care. However, the provision does
not limit or eliminate the liability of a director for disloyalty
to the Company or its stockholders, failing to act in good faith,
engaging in intentional misconduct or a knowing violation of the
law, obtaining an improper personal benefit or paying a dividend
or approving a stock repurchase that was illegal under
section 174 of the DGCL.
Article Seventh also provides that if the DGCL is
subsequently amended to authorize further limitation or
elimination of the liability of directors, such subsequent
limitation or elimination of director's liability will be
automatically implemented without further stockholder action.
Furthermore, repeal or modification of the terms of the Article
Seventh will not adversely affect any right or protection of a
director existing at the time of such repeal or modification.<PAGE>
The Declaration of each NorAm Trust provides that no
Institutional Trustee or any of its Affiliates, Delaware Trustee
or any of its Affiliates, or officer, director, shareholder,
member, partner, employee, representative or agent of the
Institutional Trustee or the Delaware Trustee (each a "Fiduciary
Indemnified Person"), and no Regular Trustee, Affiliate of any
Regular Trustee, or any officer, director, shareholder, member,
partner, employee, representative or agent of any Regular
Trustee, or any employee or agent of the NorAm Trust or its
Affiliates (each a "Company Indemnified Person") shall be liable,
responsible or accountable in damages or otherwise to such Trust
or any officer, director, shareholder, partner, member,
representative, employee or agent of the NorAm Trust or its
Affiliates for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Fiduciary
Indemnified Person or Company Indemnified Person in good faith on
behalf of such NorAm Trust and in a manner such Fiduciary
Indemnified Person or Company Indemnified Person reasonably
believed to be within the scope of the authority conferred on
such Fiduciary Indemnified Person or Company Indemnified Person
by such Declaration or by law, except that a Fiduciary
Indemnified Person or Company Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such
Fiduciary Indemnified Person's or Company Indemnified Person's
gross negligence (or, in the case of a Fiduciary Indemnified
Person, negligence) or willful misconduct with respect to such
acts or omissions.
The Declaration of each NorAm Trust also provides that to
the full extent permitted by law, NorAm shall indemnify 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 any 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 Declaration of each NorAm Trust
also provides that to the full extent permitted by law, the
Company shall indemnify 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 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
II-2<PAGE>
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. The Declaration of each NorAm Trust further
provides that 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 the immediately preceding two sentences shall be
paid by the Company 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 NorAm as authorized in the Declaration. The
directors and officers of NorAm and the Regular Trustees are
covered by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), which
might be incurred by them in such capacities and against which
they cannot be indemnified by NorAm or the NorAm Trusts.
Any agents, dealers or underwriters who execute any of the
Agreements filed as Exhibit 1 to this Registration Statement will
agree to indemnify the Company's directors and their officers and
the NorAm Trustees who signed the Registration Statement against
certain liabilities that may arise under the Securities Act with
respect to information furnished to NorAm or any of the NorAm
Trusts by or on behalf of any such indemnifying party.
Item 16. Exhibits.
Exhibit
Number Description of Exhibit
1.1 --
Form of Agency Agreement for Debt or Equity
Securities (incorporated herein by reference to
Exhibit 1.2 to the Company's Registration
Statement on Form S-3 (Registration No. 33-
48750)).
1.2 --
Form of Underwriting Agreement for Debt or Equity
Securities (incorporated by reference to Exhibit
1.1 to the Company's Registration Statement on
Form S-3 (Registration No. 33-48750)).
1.3 --
Form of Underwriting Agreement for Offering of
Preferred Securities.
4.1 --
Restated Certificate of Incorporation of the
Company, dated May 11, 1994, as amended
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3
(Registration No. 33-52853)).
II-3<PAGE>
Exhibit
Number Description of Exhibit
4.2 --
By-Laws of the Company, dated May 11, 1994
(incorporated herein by reference to Exhibit 4.2
to the Company's Registration Statement on Form
S-8 (Registration No. 33-54241)).
4.3 --
Indenture, dated as of April 15, 1990, between the
Company and Citibank, N.A., as trustee
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3
(Registration No. 33-23375)).
4.4 --
Certificate of Trust of NorAm Financing I.
4.5 --
Certificate of Trust of NorAm Financing II.
4.6 --
Form of Amended and Restated Declaration of Trust
for Convertible Preferred Securities.
4.7 --
Form of Amended and Restated Declaration of Trust
for Non-convertible Preferred Securities
4.8 --
Form of Indenture between the Company and The Bank
of New York, as trustee.
4.9 --
Form of Supplemental Indenture, between the
Company and The Bank of New York, as trustee,
providing for issuance of convertible junior
subordinated debentures.
4.10 --
Form of Supplemental Indenture, between the
Company and The Bank of New York, as trustee
providing for issuance of non-convertible junior
subordinated debentures.
4.11 --
Form of Convertible Preferred Security (included
in Exhibit 4.6).
4.12 --
Form of Non-Convertible Preferred Security
(included in Exhibit 4.7).
4.13 --
Form of Convertible Junior Subordinated Note
(included in Exhibit 4.9).
4.14 --
Form of Non-convertible Junior Subordinated Note
(included in Exhibit 4.10).
II-4<PAGE>
Exhibit
Number Description of Exhibit
4.15 --
Form of Preferred Securities Guarantee.
5.1** --
Opinion of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of the
Company as to validity of Common Stock registered
under Registration Statement 33-52853.
5.2*** --
Opinion of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of the
Company as to validity of Debt Securities
registered under Registration Statement 33-48750.
5.3* --
Opinion of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of the
Company as to the validity of the Equity and Debt
Securities of NorAm offered pursuant to this
Registration Statement.
5.4* --
Opinion of Skadden, Arps, Slate, Meagher & Flom as
to validity of Preferred Securities, Preferred
Securities Guarantees and Subordinated Debt
Securities offered pursuant to this Registration
Statement.
8* --
Opinion of Skadden, Arps, Slate, Meagher & Flom as
to certain tax matters relating to the issuance of
the Preferred Securities.
12 --
Computation of Ratio of Earnings to Fixed Charges.
23.1 --
Consent of Coopers & Lybrand L.L.P.
23.2* --
Consent of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of the
Company (included in Exhibits 5.1, 5.2 and 5.3).
23.3* --
Consent of Skadden, Arps, Slate, Meagher & Flom
(included in Exhibits 5.4 and 8).
24.1 --
Powers of Attorney of each of the directors and
officers of the Company whose name appears on the
signature pages hereof.
24.2** --
Powers of Attorney of each of the directors and
officers of the Company whose name appears on the
signature pages of the Registration Statement No.
33-52853.
II-5<PAGE>
Exhibit
Number Description of Exhibit
--
24.3*** Powers of Attorney of each of the directors and
officers of the Company whose name appears on the
signature pages of the Registration Statement No.
33-48750.
25.1 --
Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Citibank, N.A. as
Trustee under the Indenture (incorporated herein
by reference to Exhibit 26.1 to the Company's
Registration Statement on Form S-3 (Registration
No. 33-48750)).
25.2* --
Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York,
as Trustee under the Indenture.
25.3* --
Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York,
as Trustee under the Amended and Restated
Declaration of Trust of NorAm Financing I and the
Preferred Securities Guarantee of NorAm Energy
Corp. for the Benefit of the holders of Preferred
Securities of NorAm Financing I.
25.4* --
Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York,
as Trustee under the Amended and Restated
Declaration of Trust of NorAm Financing II and the
Preferred Securities Guarantee of NorAm Energy
Corp. for the Benefit of the holders of Preferred
Securities of NorAm Financing II.
27 --
Financial Data Schedule.
- -----------------------------------
* To be filed by Amendment or by a Current Report on Form 8-K.
** Previously filed as part of Registration Statement
No. 33-52853.
*** Previously filed as part of Registration Statement
No. 33-48750.
Item 17. Undertakings.
The undersigned registrant hereby undertakes that:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement, Registration Statement No. 33-52853
and/or Registration Statement No. 33-48750:
II-6<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933,
unless the information required to be
included in such post-effective amendment is
contained in periodic reports filed by the
registrants pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934
and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this Registration Statement, Registration
Statement No. 33-52853, and/or Registration
Statement No. 33-48750 (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set
forth in this Registration Statement,
Registration Statement No. 33-52853, and/or
Registration Statement No. 33-48750, unless
the information required to be included in
such post-effective amendment is contained in
periodic reports filed by the registrants
pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and
incorporated herein by reference; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this Registration
Statement, Registration Statement No.
33-52853, and/or Registration Statement No.
33-48750 or any material change to such
information in this Registration Statement,
Registration Statement No. 33-52853, and/or
Registration Statement No. 33-48750.
(2) For purposes of determining any liability under
the Securities Act of 1933, each post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) For purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Act of 1934)
that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
II-7<PAGE>
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) For purpose of determining any liability under the
Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act shall
be deemed to be part of this Registration Statement as of
the time it was declared effective.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons for the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
The undersigned Trust registrants hereby undertake to
provide to the underwriters at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such name as required by the underwriters to permit
prompt delivery to each purchaser.
II-8<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this Registration Statement, Post-
Effective Amendment No. 1 to Registration Statement No. 33-52853
and Post-Effective Amendment No. 1 to Registration Statement No.
33-48750 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on this
3rd day of November, 1995.
NORAM ENERGY CORP.
(Registrant)
By /s/ Michael B. Bracy
(Michael B. Bracy)
Executive Vice President and
Principal Financial Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
T. MILTON HONEA* Principal executive
(T. Milton Honea) officer and Director
Chairman of the Board and
Chief Executive Officer
/s/ Michael B. Bracy Principal financial
(Michael B. Bracy) officer and Director
Executive Vice President and
Principal Financial Officer
JACK W. ELLIS, II* Principal accounting
(Jack W. Ellis, II) officer
Vice President and
Corporate Controller
JOE E. CHENOWETH* Director
(Joe E. Chenoweth)
O. HOLCOMBE CROSSWELL* Director November 3, 1995
(O. Holcombe Crosswell)
WALTER A. DeROECK* Director
(Walter A. DeRoeck)
MICKEY P. FORET* Director
(Mickey P. Foret)
JOHN P. GOVER* Director
(John P. Gover)
JOSEPH M. GRANT* Director
(Joseph M. Grant)
II-9<PAGE>
ROBERT C. HANNA* Director
(Robert C. Hanna)
JEFFREY W. HART* Director
(Jeffrey W. Hart)
MYRA JONES* Director
(Myra Jones)
LARRY C. WALLACE* Director
(Larry C. Wallace)
*By /s/ Michael B. Bracy
(Michael B. Bracy November 3,1995
Attorney-in-Fact)
II-10<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
NorAm Financing I and NorAm Financing II certify that they have
reasonable grounds to believe that they meet all of the
requirements for filing on Form S-3 and have duly caused this
Registration Statement to be signed on their behalf by the
undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on this 3rd day of November, 1995.
NORAM FINANCING I
By: NorAm Energy Corp., as sponsor
By /s/ Michael B. Bracy
(Michael B. Bracy)
Executive Vice President and
Principal Financial Officer
NORAM FINANCING II
By: NorAm Energy Corp., as sponsor
By /s/ Michael B. Bracy
(Michael B. Bracy)
Executive Vice President and
Principal Financial Officer
II-11<PAGE>
INDEX TO EXHIBITS
Exhibit Description of Exhibit Sequentially
Number Numbered
Page
1.1 --
Form of Agency Agreement for Debt or Equity
Securities (incorporated herein by reference
to Exhibit 1.2 to the Company's Registration
Statement on Form S-3 (Registration No. 33-
48750)).
1.2 --
Form of Underwriting Agreement for Debt or
Equity Securities (incorporated herein by
reference to Exhibit 1.1 to the Company's
Registration Statement on Form S-3
(Registration No. 33-48750)).
1.3 --
Form of Underwriting Agreement for offering
of Preferred Securities.
4.1 --
Restated Certificate of Incorporation of the
Company, dated May 11, 1994, as amended
(incorporated by reference to Exhibit 4.1 to
the Company's Registration Statement on Form
S-3 (Registration No. 33-52853)).
4.2 --
By-Laws of the Company, dated May 11, 1994
(incorporated herein by reference to Exhibit
4.2 to the Company's Registration Statement
on Form S-8 (Registration No. 33-54241)).
4.3 --
Indenture, dated as of April 15, 1990,
between the Company and Citibank, N.A., as
trustee (incorporated by reference to
Exhibit 4.1 to the Company's Registration
Statement on Form S-3 (Registration No.
33-23375)).
4.4 --
Certificate of Trust of NorAm Financing I.
4.5 --
Certificate of Trust of NorAm Financing II.
4.6 --
Form of Amended and Restated Declaration of
Trust for Convertible Preferred Securities.
4.7 --
Form of Amended and Restated Declaration of
Trust for Non-convertible Preferred
Securities.<PAGE>
Exhibit Description of Exhibit Sequentially
Number Numbered
Page
4.8 --
Form of Indenture between the Company and
The Bank of New York, as trustee.
4.9 --
Form of Supplemental Indenture, between the
Company and The Bank of New York, as
trustee, providing for the issuance of
convertible junior subordinated debentures.
4.10 --
Form of Supplemental Indenture between the
Company and The Bank of New York, as trustee
providing for issuance of non-convertible
junior subordinated debentures.
4.11 --
Form of Convertible Preferred Security
(included in Exhibit 4.6)
4.12 --
Form of Non-convertible Preferred Security
(included in Exhibit 4.7).
4.13 --
Form of Convertible Junior Subordinated Note
(included in Exhibit 4.9).
4.14 --
Form of Non-convertible Junior Subordinated
Note (included in Exhibit 4.10).
4.15 --
Form of Preferred Securities Guarantee.
5.1** --
Opinion of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of
the Company as to validity of Common Stock
registered under Registration Statement
33-52853.
5.2*** --
Opinion of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of
the Company as to validity of Debt
Securities registered under Registration
Statement 33-48750.
5.3* --
Opinion of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of
the Company as to the validity of the Equity
and Debt Securities of NorAm offered
pursuant to this Registration Statement.<PAGE>
Exhibit Description of Exhibit Sequentially
Number Numbered
Page
5.4* --
Opinion of Skadden, Arps, Slate, Meagher &
Flom as to validity of Preferred Securities,
Preferred Securities Guarantees and
Subordinated Debt Securities offered
pursuant to this Registration Statement.
8* --
Opinion of Skadden, Arps, Slate, Meagher &
Flom as to certain tax matters relating to
the issuance of Preferred Securities.
12 --
Computation of Ratio of Earnings to Fixed
Charges.
23.1 --
Consent of Coopers & Lybrand L.L.P.
23.2* --
Consent of Hubert Gentry, Jr., Senior Vice
President, General Counsel and Secretary of
the Company (included in Exhibits 5.1, 5.2
and 5.3).
23.3* --
Consent of Skadden, Arps, Slate, Meagher &
Flom (included in Exhibits 5.4 and 8).
24.1 --
Powers of Attorney of each of the directors
and officers of the Company whose name
appears on the signature pages hereof.
24.2** --
Powers of Attorney of each of the directors
and officers of the Company whose name
appears on the signature pages of the
Registration Statement No. 33-52853.
24.3*** --
Powers of Attorney of each of the directors
and officers of the Company whose name
appears on the signature pages of the
Registration Statement No. 33-48750.
25.1 --
Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of
Citibank, N.A. as Trustee under the
Indenture (incorporated herein by reference
to Exhibit 26.1 to the Company's
Registration Statement on Form S-3
(Registration No. 33-48750)).<PAGE>
Exhibit Description of Exhibit Sequentially
Number Numbered
Page
25.2* --
Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The
Bank of New York, as Trustee under the
Indenture.
25.3* --
Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The
Bank of New York, as Trustee under the
Amended and Restated Declaration of Trust of
NorAm Financing I and the Preferred
Securities Guarantee of NorAm Energy Corp.
for the Benefit of the holders of Preferred
Securities of NorAm Financing I.
25.4* --
Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The
Bank of New York, as Trustee under the
Amended and Restated Declaration of Trust of
NorAm Financing II and the Preferred
Securities Guarantee of NorAm Energy Corp.
for the Benefit of the holders of Preferred
Securities of NorAm Financing II.<PAGE>
Exhibit Description of Exhibit Sequentially
Number Numbered
Page
27 --
Financial Data Schedule.
* To be filed by Amendment or by Current Report on Form 8-K.
** Previously filed as part of Registration Statement
No. 33-52853.
*** Previously filed as part of Registration Statement
No. 33-48750.<PAGE>
_________ Preferred Securities
NORAM FINANCING { }
(a Delaware Trust)
___% Trust Originated Preferred Securities
(Liquidation Amount of $50 Per Preferred Security)
FORM OF UNDERWRITING AGREEMENT
[DATE]
[Underwriter]
[Address]
Dear Sirs:
NORAM FINANCING { } (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. Section 3801 ET SEQ.), NORAM ENERGY CORP., a
Delaware corporation (the "Company") and, together with the Trust
(the "Offerors"), confirm their agreement (the "Agreement") with
[Representative] and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term
shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom [Representative] is
acting as representative (in such capacity, [Representative]
shall hereinafter be referred to as the "Representative"), with
respect to the sale by the Trust and the purchase by the
Underwriters, acting severally and not jointly, of the respective
numbers of ___% Trust Originated Preferred Securities
(liquidation amount of $50 per preferred security) of the Trust
("Preferred Securities") set forth in said Schedule A and with
respect to the grant by the Trust to the Underwriters, acting
severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of _______
additional Preferred Securities to cover over-allotments, in each
case except as may otherwise be provided in the Pricing
Agreement, as hereinafter defined. The aforesaid _______ shares
of Preferred Securities [(the "Initial Securities")] to be
purchased by the Underwriters [and all or any part of the
__________ shares of Preferred Securities subject to the option
described in Section 2(b) hereof (the "Option Securities")] are
collectively hereinafter called the "[Designated] Securities".
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 Guaranty Agreement"), dated as of<PAGE>
__________, 199_, between the Company and Bank of New York, as
Trustee, and entitled to the benefits of certain undertakings
described in the Prospectus with respect to the Company's
agreement pursuant to the Supplemental Indenture (as defined
herein) to pay all expenses relating to administration of the
Trust. The Preferred Securities and the related Preferred
Securities Guarantees are referred to herein as the "Securities".
Prior to the purchase and public offering of the
[Designated] Securities by the several Underwriters, the Offerors
and the Representative, 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
Representative and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the
[Designated] 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 Offerors have filed with the Securities and
Exchange Commission (the "Commission") a registration statement
on Form S-3 (No. 33-__) and a related preliminary prospectus for
the registration under the Securities Act of 1933 (the "1933
Act") of (i) the Preferred Securities, (ii) the Preferred
Securities Guarantee, and (iii) $_________ million aggregate
principal amount of Subordinated Debt Securities (the
"Subordinated Debt Securities") to be issued and sold to the
Trust by the Company, have filed such amendments thereto, if any,
and such amended preliminary prospectuses as may have been
required to the date hereof, and will file such additional
amendments thereto and such amended prospectuses as may hereafter
be required. Such registration statement (as amended, if
applicable) and the prospectus constituting a part thereof
(including, in each case, all documents incorporated or deemed to
be incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act and the information, if any, deemed
to be part thereof pursuant to Rule 430A(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations")), as from time to time amended or supplemented
pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act") or otherwise, are hereinafter referred
to as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be
provided to the Underwriters by the Offerors for use in
connection with the offering of the [Designated] Securities,
which differs from the Prospectus on file at the Commission at
the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the
Offerors pursuant to Rule 424(b) of the 1933 Act Regulations),
-2-<PAGE>
the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for
such use. All references in this Agreement to financial
statements and schedules and other information that is
"contained," "included" or "stated" in the Registration Statement
or the Prospectus (and all other references of like import) shall
be deemed to mean and include all such financial statements and
schedules and other information that are or are deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act that is or is
deemed to be incorporated by reference in the Registration
Statement 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
Representative deems 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 Securities will be combined
with the entire proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities")
guaranteed by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon
liquidation, redemption and maturity (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"), dated as of ___________, 199_, between
the Company and the Bank of New York, as Trustee, and will be
used by the Trust to purchase 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, dated as of _______________,
199_ (the "Declaration"), among the Company, as Sponsor, the
trustees named therein (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, dated as of _____________, 199_ (the "Base
Indenture"), between the Company and the Bank of New York as
trustee (the "Debt Trustee"), and a supplement to the Base
Indenture, dated as of _____________, 199_ (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.
Section 1. REPRESENTATIONS AND WARRANTIES.
-3-<PAGE>
(a) The Offerors jointly and severally represent
and warrant to each Underwriter as of the date hereof and as of
the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") as follows:
(i) At the time the Registration Statement
becomes effective and at the Representation Date, the
Registration Statement will comply in all material respects
with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1934 Act, the regulations of the Commission
under the 1934 Act (the "1934 Act Regulations"), and the
1939 Act and the rules and regulations of the Commission
under the 1939 Act (the "1939 Act Regulations"), 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.
The Prospectus, at the Representation Date (unless the term
"Prospectus" refers to a prospectus that has been provided
to the Underwriters by the Trust for use in connection with
the offering of the Securities and that differs from the
Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case, at
the time it is first provided to the Underwriters for such
use) and at Closing Time referred to in Section 2 hereof,
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; provided, however,
that the representations and warranties in this subsection
shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon
and in conformity with information furnished to the Offerors
in writing by any Underwriter through [Representative]
expressly for use in the Registration Statement or
Prospectus.
(ii) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has
been no material adverse change or any development involving
a prospective material adverse change in the financial
condition or results of operation of the Company and its
subsidiaries taken as a whole.
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, severally and not jointly, 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
-4-<PAGE>
number of [Initial] Securities set forth in Schedule A opposite
the name of such Underwriter (except as otherwise provided in the
Pricing Agreement), plus any additional number of [Initial]
Securities that such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
The purchase price per security to be paid by the
several Underwriters for the [Designated] Securities shall be an
amount equal to the initial public offering price. The initial
public offering price per Preferred Security shall be a fixed
price to be determined by agreement between the Representative
and the Offerors. The initial public offering price and the
purchase price, when so determined, shall be set forth in the
Pricing Agreement. In the event that such prices have not been
agreed upon and the Pricing Agreement has not been executed and
delivered by all parties thereto by the close of business on the
fourth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any
party to any other party, unless otherwise agreed to by the
Offerors and the Representative. As compensation to the
Underwriters for their commitments hereunder and in view of the
fact that the proceeds of the sale of the Preferred Securities
will be used to purchase the Subordinated Debt Securities of the
Company, the Company hereby agrees to pay at Closing Time (as
defined below) to the Representative, for the accounts of the
several Underwriters, a commission per Preferred Security
determined by agreement between the Representative and the
Company for the Preferred Securities to be delivered by the Trust
hereunder at Closing Time or relevant Date of Delivery (as
defined below), as the case may be. The commission, when so
determined, shall be set forth in the Pricing Agreement.
[(b) In addition, on the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Trust hereby
grants an option to the Underwriters, severally and not jointly,
to purchase up to an additional ______ Preferred Stock at the
price per share set forth in the Pricing Agreement, less an
amount per share equal to any dividends declared by the Company
and payable on the [Initial] Securities but not payable on the
Option Securities. The option hereby granted will expire 30 days
after the Representation Date and may be exercised in whole or in
part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and
distribution of the [Initial] Securities upon notice by the
Representative to the Trust setting forth the number of Option
Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the
Representative, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to
-5-<PAGE>
the Closing Time, as hereinafter defined, unless otherwise agreed
by the Representative and the Trust. If the option is exercised
as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of Option Securities then
being purchased which the number of [Initial] Securities set
forth in Schedule A opposite the name of such Underwriter bears
to the total number of [Initial] Securities (except as otherwise
provided in the Pricing Agreement), subject in each case to such
adjustments as the Representative in its discretion shall make to
eliminate any sales or purchases of fractional securities.]
(c) Payment of the purchase price for, and
delivery of certificates for, the [Initial] Securities shall be
made at the office of _______________, or at such other place as
shall be agreed upon by the Representative and the Trust, at
10:00 A.M. New York time on the fifth business day (unless
postponed in accordance with the provisions of Section 10)
following the fifth business day after execution of the Pricing
Agreement, or such other time not later than ten business days
after such date as shall be agreed upon by the Representative,
the Trust and the Company (such time and date of payment and
delivery being herein called "Closing Time"). [In addition, in
the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price for, and
delivery of certificates for, such Option Securities shall be
made at the above-mentioned offices of _______________, or at
such other place as shall be agreed upon by the Representative
and the Trust, on each Date of Delivery as specified in the
notice from the Representative to the Trust.] Payment shall be
made to the Company by certified or official bank check or checks
drawn in New York Clearing House funds or similar next day funds
payable to the order of the Trust to an account designated by the
Trust, against delivery to the Representative for the respective
accounts of the Underwriters of certificates for the [Designated]
Securities to be purchased by them. Certificates for the
[Initial] Securities [and the Option Securities, if any,] shall
be in such denominations and registered in such names as the
Representative may request in writing at least two business days
before the Closing Time or the relevant Date of Delivery, as the
case may be. It is understood that each Underwriter has
authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price
for, the [Initial] Securities [and the Option Securities, if
any,] which it has agreed to purchase. [Representative],
individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase
price for the [Initial] Securities [or the Option Securities, if
any,] to be purchased by any Underwriter whose check has not been
received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
-6-<PAGE>
The certificates for the [Initial] Securities [and
the Option Securities, if any,] will be made available for
examination and packaging by the Representative not later than
10:00 A.M. on the last business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be.
At the Closing Time or each Date of Delivery, as
the case may be, the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under
Section 2 hereof by certified or official bank check or checks
payable to [Representative] in New York Clearing House funds or
other similar next day funds.
Section 3. COVENANTS OF THE OFFERORS. Each of the
Offerors jointly and severally covenants with each Underwriter as
follows:
(a) The Offerors will notify the Representative
immediately, and confirm the notice in writing, (i) of the
effectiveness of the Registration Statement and any amendment
thereto (including any post-effective amendment), (ii) of 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, and (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. 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.
(b) The Offerors will give the Representative
notice of their intention to file or prepare any amendment to the
Registration Statement (including any post-effective amendment)
or any amendment or supplement to the Prospectus (including any
revised prospectus which the Offerors propose for use by the
Underwriters in connection with the offering of the Preferred
Securities which differs from the prospectus on file at the
Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to
be filed pursuant to Rule 424(b) of the 1933 Act Regulations),
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representative with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which the
Representative or counsel for the Underwriters shall reasonably
object unless the Company shall conclude that such amendment or
supplement must be filed in accordance with applicable law.
Subject to the foregoing, the Offerors will promptly prepare a
supplement to the Prospectus to reflect the terms of the
-7-<PAGE>
[Designated] Securities and the terms of the Offering. The
Offerors will file the Prospectus as so supplemented pursuant to
Rule 424(b) under the Act not later than the Commission's close
of business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act.
(c) The Offerors will furnish to the
Representatives copies of the Registration Statement, including
all exhibits thereto, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available
and in such quantities as are reasonably requested.
(d) If any event shall occur as a result of which
it is necessary to amend or supplement the Prospectus in order to
make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a
purchaser, the Offerors will forthwith amend or supplement the
Prospectus in accordance with paragraph (b) above so that, as so
amended or supplemented, 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, in the
light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Offerors will furnish to
the Underwriters a reasonable number of copies of such amendment
or supplement.
(e) The Offerors will endeavor, in cooperation
with the Underwriters, to qualify the Preferred Securities and
Subordinated Debt Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions
of the United States as the Representative may designate;
provided, however, that each of the Offerors shall not be
obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified.
(f) The Trust will make generally available to
its security holders as soon as practicable, an earnings
statement (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 Trust's fiscal
quarter next following the "effective date" (as defined in said
Rule 158) of the Registration Statement.
(g) The Offerors will use their reasonable
efforts to effect the listing of the Preferred Securities on the
[New York Stock Exchange]; if the Preferred Securities are
exchanged for Subordinated Debt Securities, the Company will use
its reasonable efforts to effect the listing of the Subordinated
Debt Securities on the exchange on which the Preferred Securities
were then listed.
-8-<PAGE>
(h) During a period of 30 days from the date of
the Pricing Agreement, neither the Trust nor the Company will,
without the Representative's prior written consent, directly or
indirectly, sell, offer to sell, grant any option for the sale
of, or otherwise dispose of, any Preferred Securities, any
security convertible into or exchangeable into or exercisable for
Preferred Securities or any equity securities substantially
similar to the Preferred Securities (except for Preferred
Securities issued pursuant to this Agreement).
Section 4. PAYMENT OF EXPENSES. The Company will pay
all expenses incident to the performance of each Offeror's
obligations under this Agreement, including, but not limited to,
(i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto; (ii) the printing
of this Agreement and the Pricing Agreement; (iii) the
preparation, issuance of the certificates for the Preferred
Securities to the Underwriters; (iv) the fees and disbursements
of the Company's and the Trust's counsel and accountants; (v) the
qualification of the Preferred Securities and Subordinated Debt
Securities under securities laws in accordance with the
provisions of Section 3(e) hereof, 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, 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) the fee of the National
Association of Securities Dealers, Inc.; (ix) the fees and
expenses of the Debt Trustee, including the fees and
disbursements of counsel for the Debt Trustee in connection with
the Indenture and the Subordinated Debt Securities; (x) the fees
and expenses of the Property Trustee and Delaware Trustee,
including the fees and disbursements of counsel for the Property
Trustee and Delaware Trustee in connection with the Declaration
and the Certificate of Trust; (xi) any fees payable in connection
with the rating of the Preferred Securities and Subordinated Debt
Securities; (xii) 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]; (xiii) the cost and charges of any transfer agent or
registrar; and (xiv) the cost of qualifying the Preferred
Securities with The Depository Trust Company.
If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or
Section 9 hereof, the Company shall reimburse the Underwriters
for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the
-9-<PAGE>
Underwriters, which shall not exceed the amount set forth in the
applicable Terms Agreement.
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Offerors
herein contained, to the performance by the Offerors of their
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof, or with
the consent of the Representative, at a later time and date, not
later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time and date as may
be approved by the Representative; and at Closing Time no stop
order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. The Prospectus shall
have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by
the 1933 Regulations and in accordance with Section 3(b) and
prior to Closing Time the Offerors shall have provided evidence
satisfactory to the Representative of such timely filing.
(b) At Closing Time the Representative shall have
received:
(1) The favorable opinion, dated as of
Closing Time, of ______________, counsel for the Offerors, in
form and substance reasonably satisfactory to counsel for the
Underwriters, substantially in the form set forth in Annex 1.
(2) The favorable opinion, dated as of
Closing Time, of Hubert Gentry, Jr., Esq., General Counsel for
the Company, in form and substance satisfactory to counsel for
the Underwriters, substantially in the form set forth in Annex 2.
(3) The favorable opinion, dated as of
Closing Time, of ______________, counsel of Bank of New York, as
Property Trustee under the Declaration, in form and substance
satisfactory to counsel for the Underwriters, substantially in
the form of Annex 3.
(4) The favorable opinion, dated as of
Closing Time, of_________________, counsel for the Underwriters,
in form and substance satisfactory to the Underwriters.
(c) At Closing Time, since the date of the
Pricing Agreement (i) there shall not have occurred any change,
or any development involving a prospective change, in or
affecting particularly the business or properties of the Company
and any of its subsidiaries, taken as a whole, which, in the
-10-<PAGE>
judgment of the Representatives, materially impairs the
investment quality of the [Designated] Securities and (ii) there
has not been any decrease in the ratings of any of the debt
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 Act) and no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
ratings of any of the debt securities of the Company or of the
Preferred Securities.
(d) At the time the execution of this Agreement,
the Representative shall have received from Coopers & Lybrand
L.L.P. a letter dated such date, in form and substance
satisfactory to the Representative, to the effect that:
(i) they are independent public accountants
with respect to the Company and its consolidated
subsidiaries within the meaning of the 1933 Act and the 1933
Act Regulations; and the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally
accepted accounting principles;
(ii) in their opinion, the consolidated
financial statements and any supplementary financial
information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated
by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act or the
1934 Act and the related published rules and regulations
thereunder; and if applicable, they have made a review in
accordance with standards established by the American
Institute of Certified Public Accountants of the
consolidated interim financial statements, selected
financial data, statements and/or condensed financial
statements derived from audited financial statements of the
Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have
been furnished to the Representatives;
(iii) based upon limited procedures set forth
in detail in such letter, nothing has come to their
attention which causes them to believe that
(A) the unaudited consolidated
financial statements and supporting schedules of the Company
included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations or
are not presented in conformity with accepted accounting
-11-<PAGE>
principles applied on a basis substantially consistent with
that of the audited financial statements included in the
Registration Statement, or
(B) the unaudited amounts of revenues,
net income and net income per share set forth under ["NORAM
ENERGY CORP. Summary Financial Information"] in the
Prospectus were not determined on a basis substantially
consistent with that used in determining the corresponding
amounts in the audited financial statements included in the
Registration Statement, or
(C) at a specified date not more than
five days prior to the date of this Agreement, there has
been any change in the capital stock of the Company and its
subsidiaries or any increase in the consolidated long-term
debt of the Company and its subsidiaries or any decrease in
consolidated net current assets or net assets as compared
with the amounts shown on the date of the most recent
consolidated balance sheet included in or incorporated by
reference in the Registration Statement and the Prospectus
(, 199_ balance sheet included in the Registration
Statement) or, during the period from the date of the most
recent consolidated balance sheet included in or
incorporated by reference in the Registration Statement and
the Prospectus to a specified date not more than five days
prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues, net income or net
income per share of the Company and its subsidiaries, except
in all instances for changes, increases or decreases which
the Registration Statement and the Prospectus disclose have
occurred or may occur; and
(iv) in addition to the examination referred
to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with
respect to certain amounts, percentages and financial
information which are included in the Registration Statement
and Prospectus, or incorporated therein by reference, and
which are specified by the Representative, and have found
such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other
records of the Company and its subsidiaries, identified in
such letter.
(e) At Closing Time, the Representative shall
have received from Coopers & Lybrand L.L.P. a letter, dated as of
Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d) of this
-12-<PAGE>
Section, except that the specified date referred to shall be a
date not more than five days prior to Closing Time.
(f) At the Closing Time, the Representative shall
have received (i) a certificate, dated as of the Closing Time, of
an officer of the Company, and (ii) a certificate, dated as of
the Closing Time, of a Trustee of the Trust, in each case in
which such officers shall state that, to the best of their
knowledge after reasonable investigation, the representations and
warranties of the Offerors in this Agreement are true and
correct, that the Offerors have complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Time, that no stop order
suspending the effectiveness of the Registration Statement is in
effect and no proceedings for that purpose are pending or are
contemplated by the Commission and that, subsequent to the date
of the most recent financial statements in the Prospectus, there
has been no material adverse change in the financial position or
results of operations of the Company and any of its subsidiaries,
taken as a whole, except as set forth in or contemplated by the
Prospectus.
(g) At Closing Time and each Date of Delivery, if
any, 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
Preferred 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
Offeror, in connection with the issuance and sale of the
Preferred Securities as herein contemplated shall be satisfactory
in form and substance to the Representative and counsel for the
Underwriters.
[(h) In the event that the Underwriters exercise
their option provided in Section 2(b) hereof to purchase all or
any portion of the Option Securities, the representations and
warranties of the Offerors contained herein and the statements in
any certificates furnished by the Offerors hereunder shall be
true and correct as of each Date of Delivery and, at the relevant
Date of Delivery, the Representative shall have received:
(1) The certificates, each dated such Date of Delivery, of
the relevant officer of the respective Offeror confirming
that the respective certificates delivered at the Closing
Time pursuant to Section 5(f) hereof remains true and
correct as of such Date of Delivery.
(2) The favorable opinion of ______________, counsel for
the Offerors, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating
-13-<PAGE>
to the Option Securities to be purchased on such Date of
Delivery, and otherwise to the same effect as the opinion
required by Sections 5(b)(1).
(3) The favorable opinion of Hubert Gentry, Jr., Esq.,
General Counsel, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Sections 5(b)(2).
(4) The favorable opinion of _________________, counsel of
the Bank of New York, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Sections 5(b)(3).
(5) The favorable opinion of _____________________, special
counsel for Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Sections 5(b)(4).
(6) A letter from Coopers & Lybrand L.L.P., in form and
substance satisfactory to the Representative and dated such
Date of Delivery, substantially the same in form and
substance as the letter furnished to the Representative
pursuant to Section 5(d) hereof, except that the "specified
date" in the letter furnished pursuant to this Section
5(h)(8) shall be a date not more than five days prior to
such Date of Delivery.]
(i) At Closing Time, the Preferred Securities and
the Subordinated Debt 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 Representative a
letter, dated the Closing Time, from such nationally recognized
statistical rating agency, or other evidence satisfactory to the
Representative, confirming that the Preferred Securities and the
Subordinated Debt Securities have Investment Grade ratings.
(j) At the Closing Time, the Preferred Securities
shall have been approved for listing on the [New York Stock
Exchange] upon notice of issuance.
If any condition specified in this Section shall not
have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to
the Offerors at any time at or prior to Closing Time, and such
-14-<PAGE>
termination shall be without liability of any party to any other
party except as provided in Section 4 hereof.
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 information deemed to
be the Registration Statement pursuant to Rule 430A(b) of
the 1933 Act Regulations, 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 contained in any
preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or the omission or the 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,
if such settlement is effected with the written consent of
the Company; and
(iii) against any and all reasonable expense
as incurred (including, subject to Section 6(c) hereof, the
fees and disbursements of counsel chosen by
[Representative]), 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, to the extent that any such expense is not paid
under (i) or (ii) above;
PROVIDED, HOWEVER, that this 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 Trust or the Company by
-15-<PAGE>
any Underwriter through [Representative] expressly for use in the
Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and PROVIDED, FURTHER, that this indemnity
agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter from whom the person
asserting any such losses, liabilities, claims, damages or
expenses purchased Securities, or any person controlling such
Underwriter, if the Offerors sustain the burden that a copy of
the Prospectus (as then amended or supplemented if the Company
shall have furnished any such amendments or supplements thereto),
but excluding documents incorporated or deemed to be incorporated
by reference, was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or
prior to the written confirmation of the sale of such Securities
to such person and if the Prospectus (as so amended or
supplemented, but excluding documents incorporated or deemed to
be incorporated by reference therein) would have corrected the
defect giving rise to such loss, liability, claim, damage or
expense, it being understood that this proviso shall have no
application if such defect shall have been corrected in a
document which is incorporated or deemed to be incorporated by
reference in the Prospectus.
(b) The Company agrees to indemnify the Trust
against all loss, liability, claim, damage and expense
whatsoever, as due from the Trust under Section 6(a) hereunder.
(c) Each Underwriter severally agrees to
indemnify and hold harmless the Offerors, their directors,
trustees, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Offerors
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) 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 [Representative] expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto).
(d) 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 which it may have otherwise than on account of this
-16-<PAGE>
indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. If it so
elects within a reasonable time after receipt of such notice, an
indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume the defense of such action with
counsel satisfactory to such indemnifying party (who shall not,
except with the consent of the indemnified party, be counsel to
the indemnifying party), unless such indemnified parties
reasonably object to such assumption on the ground that there may
be legal defenses available to them which are different from or
in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. 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. The indemnifying party or parties shall not be
liable under this Agreement with respect to any settlement made
by any indemnified party or parties without prior written consent
by the indemnifying party or parties to such settlement.
Section 7. CONTRIBUTION. In order to provide for just
and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 6 hereof is for any
reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Offerors
and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Offerors
and one or more of the Underwriters, as incurred, in such
proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting
compensation paid by the Company appearing on the cover page of
the Prospectus bears to the initial public offering price
appearing thereon and the Offerors are responsible for the
balance; provided, however, that 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, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who
signed the Registration Statement, each trustee of the Trust and
each person, if any, who controls an Offeror within the meaning
of Section 15 of the 1933 Act shall have the same rights to
contribution as the Offerors.
-17-<PAGE>
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 or Trustees of the
Offerors 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 Offerors and shall survive delivery of the
Preferred Securities to the Underwriters.
Section 9. TERMINATION OF AGREEMENT.
(a) The Representative may terminate this
Agreement, by notice to the Offerors, at any time at or prior to
Closing Time (i) if there has been, since the date of this
Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse
change or any development involving a prospective material
adverse change, in the financial condition or results of
operations of the Company and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, or
(ii) if there has occurred any outbreak of hostilities or
material escalation thereof or other calamity or crisis the
effect of which is such as to make it, in the judgment of the
Representative, impracticable to market the [Designated]
Securities, (iii) if trading in the [Designated] Securities has
been suspended by the Commission, or if trading generally on
[New York Stock Exchange] has been suspended, limited or
restricted or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been
required, by said exchange or by order of the Commission or any
other governmental authority, or if a banking moratorium has been
declared by either Federal or New York authorities or (iv) if
there has been any decrease in the ratings of any of the debt
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 Act) and such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the debt securities of the Company or of the
Preferred Securities.
(b) If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof.
Section 10. DEFAULT BY ONE OR MORE OF THE
UNDERWRITERS. If one or more of the Underwriters shall fail at
Closing Time to purchase the [Initial] Securities that it or they
are obligated to purchase under this Agreement and the Pricing
Agreement (the "Defaulted Securities"), the Representative shall
have the right, within 24 hours thereafter, to make arrangements
-18-<PAGE>
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, the Representatives
shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does
not exceed 10% of the number of [Initial] Securities, each
of 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 of Defaulted Securities exceeds
10% of the number of [Initial] Securities, this Agreement
shall terminate without liability on the part of any non-
defaulting Underwriter.
No action taken pursuant to this Section 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 the Representative, or
the Offerors shall have the right to postpone Closing Time for a
period not exceeding seven days in order to effect any required
changes in the Registration Statement or 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 a standard
form of telecommunication. Notices to the Underwriters shall be
directed to the Representative at ______________________________
_________________________________________________; notices to the
Trust and the Company shall be directed to them at 1600 Smith
Street, 32nd Floor, Houston, Texas 77002, attention of Hubert
Gentry, Jr., Esq., General Counsel.
Section 12. PARTIES. This Agreement and the Pricing
Agreement shall each inure to the benefit and be binding upon the
Underwriters and the Trust and the Company 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 Trust and the Company and their respective successors and the
controlling persons and officers, directors and trustees 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
-19-<PAGE>
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
Underwriters and the Trust and the Company and their respective
successors, and said controlling persons and officers, directors
and trustees 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 New York applicable to
agreements made and to be performed in said State. Except as
otherwise set forth herein, specified times of day refer to New
York City time.
-20-<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please sign an 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,
NORAM ENERGY CORP.
By________________________________
Title:
NORAM FINANCING { }
By_________________________________
Title: Trustee
By________________________________
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
[REPRESENTATIVE]
By______________________________
Authorized Signatory
For itself and as Representative of the other
Underwriters named in Schedule A hereto.
-21-<PAGE>
SCHEDULE A
Number of
Name of Underwriter Securities
Total . . . . . . . . . . . . . . . . . . . . __________
-22-<PAGE>
EXHIBIT A
_______________ Preferred Securities
NORAM FINANCING { }
(a Delaware business trust)
____% Trust Originated Preferred Securities
(Liquidation Amount of $50 Per Security)
PRICING AGREEMENT
[UNDERWRITER] _____________, 199_
[ADDRESS]
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
____________, 199_ (the "Underwriting Agreement"), relating to
the purchase by the several Underwriters named in Schedule A
thereto, for whom ___________________________________ is acting
as representative (the "Representative"), of the above ___% Trust
Originated Preferred Securities (the "Preferred Securities"), of
NORAM FINANCING { }, a Delaware business trust (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement,
the Trust and NorAm Energy Corp., a Delaware corporation (the
"Company"), 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 $50.00.
2. The purchase price per security for the
Preferred Securities to be paid by the several Underwriters
shall be $50.00, being an amount equal to the initial public
offering price set forth above; [PROVIDED that the purchase
price per Preferred Security for any Option Securities (as
defined in the Purchase Agreement) purchased upon exercise
of the over-allotment option described in Section 2(b) of
the Purchase Agreement shall be reduced by an amount per
share equal to any distribution declared by the Trust and
payable on the [Initial] Securities (as defined in the
-23-<PAGE>
Purchase Agreement) but not payable on the Option
Securities.]
3. The compensation per Preferred Security to be
paid by the Company to the several Underwriters in respect
of their commitments hereunder shall be $______; provided,
however, that the compensation per Preferred Security for
sales of __________ or more Preferred Securities to a single
purchaser shall be $_______.
If the foregoing 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,
NORAM ENERGY CORP.
By________________________________
Title:
NORAM FINANCING { }
By________________________________
Title: Trustee
By________________________________
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
[REPRESENTATIVE]
By______________________________
Authorized Signatory
For itself and as Representative of the other
Underwriters named in the Underwriting Agreement.
-24-<PAGE>
CERTIFICATE OF TRUST
The undersigned, the trustees of NorAm Financing I, desiring
to form a business trust pursuant to Delaware Business Trust Act,
12 Del. C. Section 3810, hereby certify as follows:
(d) The name of the business trust being formed hereby (the
"Trust") is "NorAm Financing I."
(e) The name and business address of the trustee of the
Trust which has its principal place of business in the
State of Delaware is as follows:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
(f) This Certificate of Trust shall be effective as of the
date of filing.
Dated: November 1, 1995
/s/ Michael B. Bracy
Name: Michael B. Bracy
Title: Trustee
/s/ Michael A. Creel
Name: Michael A. Creel
Title: Trustee
The Bank of New York
(Delaware), as Delaware
Trustee
By: /s/ Joseph F. Leary
Name: Joseph F. Leary
Title: Vice President<PAGE>
CERTIFICATE OF TRUST
The undersigned, the trustees of NorAm Financing II,
desiring to form a business trust pursuant to Delaware Business
Trust Act, 12 Del. C. Section 3810, hereby certify as follows:
(d) The name of the business trust being formed hereby (the
"Trust") is "NorAm Financing II."
(e) The name and business address of the trustee of the
Trust which has its principal place of business in the
State of Delaware is as follows:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
(f) This Certificate of Trust shall be effective as of the
date of filing.
Dated: November 1, 1995
/s/ Michael B. Bracy
Name: Michael B. Bracy
Title: Trustee
/s/ Michael A. Creel
Name: Michael A. Creel
Title: Trustee
The Bank of New York
(Delaware), as Delaware
Trustee
By: /s/ Joseph F. Leary
Name: Joseph F. Leary
Title: Vice President<PAGE>
[Form of Amended and
Restated Declaration of
Trust for convertible securities]
------------------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
NORAM FINANCING [I] [II]
Dated as of October __, 1995
------------------------------------<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . 8
SECTION 2.2 Lists of Holders of Securities . . . . . . 9
SECTION 2.3 Reports by the Institutional Trustee . . . 9
SECTION 2.4 Periodic Reports to Institutional Trustee 9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . 9
SECTION 2.6 Events of Default; Waiver . . . . . . . 10
SECTION 2.7 Event of Default; Notice . . . . . . . . . 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . 12
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . 13
SECTION 3.4 Authority . . . . . . . . . . . . . . . . 13
SECTION 3.5 Title to Property of the Trust . . . . . . 13
SECTION 3.6 Powers and Duties of the Regular Trustees 13
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees . . . . . . . . . . . . . . . 16
SECTION 3.8 Powers and Duties of the Institutional
Trustee . . . . . . . . . . . . . . . . . 17
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee . . . . . . . . 19
SECTION 3.10 Certain Rights of Institutional Trustee . 22
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . 24
SECTION 3.12 Execution of Documents . . . . . . . . . . 24
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . 24
SECTION 3.14 Duration of Trust . . . . . . . . . . . . 25
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . 25
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . 27
i<PAGE>
Page
SECTION 4.2 Responsibilities of the Sponsor . . . . . 27
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . 28
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . 28
SECTION 5.3 Institutional Trustee; Eligibility . . . . 29
SECTION 5.4 Certain Qualifications of Regular Trust-
ees and Delaware Trustee Generally . . . . 29
SECTION 5.5 Regular Trustee . . . . . . . . . . . . . 30
SECTION 5.6 Appointment, Removal and Resignation of
Trustees . . . . . . . . . . . . . . . . . 30
SECTION 5.7 Delaware Trustee . . . . . . . . . . . . . 30
SECTION 5.8 Vacancies among Trustees . . . . . . . . . 32
SECTION 5.9 Effect of Vacancies . . . . . . . . . . . 32
SECTION 5.10 Meetings . . . . . . . . . . . . . . . . . 32
SECTION 5.11 Delegation of Power . . . . . . . . . . . 33
SECTION 5.12 Merger, Conversion, Consolidation or Suc-
cession to Business . . . . . . . . . . . 33
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . 34
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities . 34
SECTION 7.2 Paying Agent and Conversion Agent . . . . 35
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . 36
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities . . . . . . . . . . 37
SECTION 9.2 Transfer of Certificates . . . . . . . . . 37
SECTION 9.3 Deemed Security Holders . . . . . . . . . 38
SECTION 9.4 Book Entry Interests . . . . . . . . . . . 38
ii<PAGE>
Page
SECTION 9.5 Notices to Clearing Agency . . . . . . . . 39
SECTION 9.6 Appointment of Successor Clearing Agency . 39
SECTION 9.7 Definitive Convertible Preferred Security
Certificates . . . . . . . . . . . . . . . 39
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Cer-
tificates . . . . . . . . . . . . . . . . 40
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . 41
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . 41
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . 42
SECTION 10.4 Indemnification . . . . . . . . . . . . . 44
SECTION 10.5 Outside Businesses . . . . . . . . . . . . 46
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . 47
SECTION 11.2 Certain Accounting Matters . . . . . . . . 47
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . 47
SECTION 11.4 Withholding . . . . . . . . . . . . . . . 48
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . 48
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent . . . . . . . . 50
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Inst-
itutional Trustee . . . . . . . . . . . . 52
SECTION 13.2 Representations and Warranties of Dela-
ware Trustee . . . . . . . . . . . . . . . 53
ARTICLE XIV
MISCELLANEOUS
iii<PAGE>
Page
SECTION 14.1 Notices . . . . . . . . . . . . . . . . . 54
SECTION 14.2 Governing Law . . . . . . . . . . . . . . 55
SECTION 14.3 Intention of the Parties . . . . . . . . . 55
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . 55
SECTION 14.5 Successors and Assigns . . . . . . . . . . 55
SECTION 14.6 Partial Enforceability . . . . . . . . . . 55
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . 55
ANNEX I TERMS OF SECURITIES . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF CONVERTIBLE PREFERRED SECURITY
CERTIFICATE . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . A2-1
EXHIBIT B SPECIMEN OF DEBENTURE . . . . . . . . . . B-1
EXHIBIT C UNDERWRITING AGREEMENT . . . . . . . . . . C-1
iv<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.
v<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NORAM FINANCING [I] [II]
____________, 1995
AMENDED AND RESTATED DECLARATION OF TRUST ("Declara-
tion") dated and effective as of October __, 1995, by the Trust-
ees (as defined herein), the Sponsor (as defined herein) and by
the holders, from time to time, of undivided beneficial interests
in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established NorAm
Capital Financing [I] [II] (the "Trust"), a trust under the Dela-
ware Business Trust Act pursuant to a Declaration of Trust dated
as of October __, 1995, (the "Original Declaration") and a
Certificate of Trust filed with the Secretary of State of the
State of Delaware on October __, 1995, 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 gov-
erning 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 securi-
ties representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this
Declaration.<PAGE>
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 Dec-
laration" are to this Declaration as modified, supplemented
or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sec-
tions 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 thereun-
der.
"Agent" means any Paying Agent or Conversion 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.
2<PAGE>
"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
Convertible 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 Convertible 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
Convertible 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 [choose one of the following
options: [Use Option 1 if no over allotment -- ___________,
1995] [Use Option 2 if over-allotment is provided - the "Closing
Time" and each "Date of Delivery" under the Underwriting Agree-
ment]].
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commis-
sion.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Common Securities Guarantee" means the guarantee
agreement to be dated as of ___________, 1995 of the Sponsor in
respect of the Common Securities.
"Common Security" has the meaning specified in Section
7.1.
3<PAGE>
"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.
"Conversion Agent" has the meaning specified in Section
7.2.
"Convertible Preferred Securities Guarantee" means the
guarantee agreement to be dated as of ______, 1995, of the
Sponsor in respect of the Preferred Securities.
"Convertible Preferred Security" has the meaning speci-
fied in Section 7.1.
"Convertible 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 main-
taining 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).
"Convertible Preferred Security Certificate" means a
certificate representing a Preferred Security substantially in
the form of Exhibit A-1.
"Corporate Trust Office" means the office of the
Institutional Trustee at which the corporate trust business of
the Convertible Preferred Guarantee Trustee shall, at any partic-
ular time, be principally administered, which office at the date
of execution of this Agreement is located at [address].
"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 NorAm Energy Corp. in its
capacity as issuer of the Debentures under the Indenture.
4<PAGE>
"Debenture Trustee" means ___________________ as
trustee under the Indenture until a successor is appointed there-
under, 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 Exhibit B.
"Delaware Trustee" has the meaning set forth in Section
5.2.
"Definitive Convertible Preferred Security Certifi-
cates" has the meaning set forth in Section 9.4.
"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 _______,
1995, among the Debenture Issuer and the Debenture Trustee, and
any indenture supplemental thereto pursuant to which the Deben-
tures are to be issued.
5<PAGE>
"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 Convertible Pre-
ferred 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 Convertible Pre-
ferred 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 Certifi-
cate has read the covenant or condition and the definitions
relating thereto;
6<PAGE>
(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
3.8(h).
"Person" means a legal person, including any individu-
al, corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust, unincorpo-
rated association, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"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
Convertible Preferred Securities.
"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-presi-
dent, 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
7<PAGE>
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
Convertible 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 NorAm Energy Corp., a Delaware corpo-
ration, 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 Sec-
tion 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 Convertible Preferred
Securities or by the Trust Indenture Act, Holder(s) of outstand-
ing Securities voting together as a single class or, as the
context may require, Holders of outstanding Convertible 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 regula-
tions, 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 provi-
sions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has
signed this Declaration as a trustee, so long as such Person
8<PAGE>
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 provi-
sions 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.
"Underwriting Agreement" means the Underwriting Agree-
ment for the offering and sale of Convertible Preferred Securi-
ties in the form of Exhibit C.
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 Inden-
ture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties
imposed by Sections 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 Distribu-
tions, a list, in such form as the Institutional Trustee may
reasonably require, of the names and addresses of the Holders of
the Securities ("List of Holders") as of such record date, pro-
9<PAGE>
vided 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 Sections 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 1 of each year, the Institu-
tional Trustee shall provide to the Holders of the Convertible
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 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 re-
quired by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Prece-
dent.
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 pursu-
10<PAGE>
ant 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 Convertible Preferred Securities may, by vote, on behalf of
the Holders of all of the Convertible Preferred Securities, waive
any past Event of Default in respect of the Convertible Preferred
Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(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 Deben-
tures (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 Convertible Preferred Securi-
ties 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
Convertible 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 Convertible
Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Convertible Preferred Securities of
an Event of Default with respect to the Convertible 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
11<PAGE>
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 Securi-
ties 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 princi-
pal 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 consequenc-
es until all Events of Default with respect to the Convertible
Preferred Securities have been cured, waived or otherwise elimi-
nated, 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 Con-
vertible Preferred Securities and only the Holders of the Con-
vertible Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securi-
ties. The foregoing provisions of this Section 2.6(b) shall be
in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Inden-
ture Act and such Sections 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 there-
from 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 Inden-
ture by the Institutional Trustee at the direction of the Holders
of the Convertible Preferred Securities, constitutes a waiver of
12<PAGE>
the corresponding Event of Default under this Declaration. 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 Inden-
ture 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 De-
bentures or in the payment of any sinking fund installment estab-
lished for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Respon-
sible Officer of the Institutional Trustee in good faith deter-
mines 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 ____ and ____ of the
Indenture; or
(ii) any default as to which the Institutional Trust-
ee shall have received written notice or of which a Respon-
sible Officer of the Institutional Trustee charged with the
administration of the Declaration shall have actual knowl-
edge.
13<PAGE>
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NorAm Financing [I], [II]" 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
NorAm Energy Corp., 1600 Smith Street, 32nd Floor, Houston, Texas
77002. 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 neces-
sary, 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.
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 authori-
ty of the Trustees as set forth in this Declaration.
14<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 Convertible Preferred
Securities and the Common Securities in accordance with this
Declaration; provided, however, that the Trust may issue no
more than one series of Convertible 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 [one-time], simultaneous issuance of both Con-
vertible Preferred Securities and Common Securities on
choose one: [each] [the] Closing Date;
(b) in connection with the issue and sale of the
Convertible 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 Convertible 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 Convertible Preferred Securities in
any State in which the Sponsor has determined to quali-
fy or register such Convertible Preferred Securities
for sale;
(iii) execute and file an application, pre-
pared by the Sponsor, to the New York Stock Exchange,
Inc. or any other national stock exchange or the Nasdaq
15<PAGE>
Stock Market's National Market for listing upon notice
of issuance of any Convertible 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 Convertible Preferred Secu-
rities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting
Agreement and Pricing Agreement providing for the sale
of the Convertible Preferred Securities;
(c) to acquire the Debentures with the proceeds of
the sale of the Convertible Preferred Securities and the
Common Securities; provided, however, that the Regular
Trustees shall cause legal title to the Debentures to be
held of record in the name of the Institutional Trustee for
the benefit of the Holders of the Convertible Preferred
Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trust-
ee 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 Convertible 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;
16<PAGE>
(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 or inciden-
tal 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 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;
(o) 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 exis-
tence is necessary to protect the limited liability of the
Holders of the Convertible Preferred Securities or to enable
the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trust-
ees determine in their discretion to be necessary or desir-
able in carrying out the activities of the Trust as set out
in this Section 3.6, including, but not limited to:
17<PAGE>
(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 indebted-
ness of the Debenture Issuer for United States federal
income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all appli-
cable tax returns and tax information reports that are re-
quired to be filed with respect to the Trust to be duly
prepared and filed by the Regular Trustees, on behalf of the
Trust.
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 inconsis-
tent 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 pro-
18<PAGE>
ceeds to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly pro-
vided 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 bene-
ficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Amended and
Restated Declaration or Annex I, (A) direct the time, method and
place of exercising any trust or power conferred upon the Deben-
ture 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.
19<PAGE>
(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 Insti-
tutional 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 Convertible Preferred Securi-
ties and Holders of the Common Securities from the Institu-
tional Trustee Account in accordance with Section 6.1.
Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Decla-
ration. 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 Convertible 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
Convertible 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 pursu-
ant 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.
20<PAGE>
(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 du-
ties and obligations under this Declaration or the Trust Inden-
ture 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 ap-
pointed 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 Institu-
tional 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) The Institutional Trustee may authorize one or
more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the
Trust with respect to all securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any
time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(i) 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
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.
21<PAGE>
SECTION 3.9 Certain Duties and Responsibilities of the In-
stitutional 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 oc-
curred (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 con-
strued 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 De-
fault that may have occurred:
(A) the duties and obligations of the Institu-
tional Trustee shall be determined solely by the ex-
press provisions of this Declaration and the Institu-
tional 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 state-
ments and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to
the Institutional Trustee and conforming to the re-
quirements 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 wheth-
22<PAGE>
er 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 Responsi-
ble 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
Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declara-
tion;
(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 perfor-
mance 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 Decla-
ration or indemnity reasonably satisfactory to the Institu-
tional Trustee against such risk or liability is not reason-
ably assured to it;
(v) the Institutional Trustee's sole duty with re-
spect 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
23<PAGE>
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 pur-
suant to Section 3.8(c)(i) and except to the extent other-
wise required by law; and
(viii) the Institutional Trustee shall not be responsi-
ble for monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this Declara-
tion, nor shall the Institutional Trustee be liable for any
default or misconduct of the Regular Trustees or the Spon-
sor.
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, instru-
ment, 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 Regu-
lar Trustees contemplated by this Declaration shall be
sufficiently evidenced by a Direction or an Officers' Cer-
tificate;
(iii) whenever in the administration of this Declara-
tion, 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 instru-
ment (including any financing or continuation statement or
any filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
24<PAGE>
(v) the Institutional Trustee may consult with coun-
sel 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 ob-
ligation 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 Insti-
tutional Trustee security and indemnity, reasonably satis-
factory to the Institutional Trustee, against the costs, ex-
penses (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, nomi-
nees 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 here-
under;
25<PAGE>
(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
Trustee or its agents alone shall be sufficient and effec-
tive 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 Trus-
tee's or its agent's taking such action;
(x) whenever in the administration of this Declara-
tion 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 Institution-
al 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 or 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 au-
thority 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 enti-
tled to exercise any powers, nor shall the Delaware Trustee have
26<PAGE>
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, a
majority of or, if there are only two, any Regular Trustee or, if
there is only one, such 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.
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 correct-
ness. 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 sufficien-
cy 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 fifty-five (55)
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 corpo-
ration 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,
27<PAGE>
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 Securities other secu-
rities having substantially the same terms as the Con-
vertible Preferred Securities (the "Successor Securi-
ties") so long as the Successor Securities rank the
same as the Convertible 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 Convertible Preferred Securities or any Suc-
cessor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any nation-
al securities exchange or with an other organization on
which the Convertible Preferred Securities are then listed
or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Convertible Preferred Securi-
ties (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organiza-
tion;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, prefer-
ences 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 Convertible Preferred Securities as a re-
sult of such merger, consolidation, amalgamation or replace-
ment);
(vi) such Successor Entity has a purpose identical to
that of the Trust;
28<PAGE>
(vii) prior to such merger, consolidation, amalgama-
tion or replacement, the Sponsor has received an opinion of
a nationally recognized independent counsel to the Trust ex-
perienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, pref-
erences 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, amal-
gamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company;
(C) following such merger, consolidation, amal-
gamation 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 Convertible 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.
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
29<PAGE>
equal to 3% of the capital of the Trust, at the same time as the
Convertible Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Convert-
ible 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 Com-
mission a registration statement on Form S-3 in relation to
the Convertible Preferred Securities, including any amend-
ments thereto;
(b) to determine the States in which to take appro-
priate action to qualify or register for sale all or part of
the Convertible 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 execut-
ed 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 applica-
tion 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 Convertible Preferred Securi-
ties;
(d) to prepare for filing by the Trust with the Com-
mission a registration statement on Form 8-A relating to the
registration of the Convertible Preferred Securities under
Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Underwriting
Agreement and Pricing Agreement providing for the sale of
the Convertible Preferred Securities.
30<PAGE>
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be four (4),
and:
(a) at any time before the issuance of any Securi-
ties, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(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, in the case of a natural
person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity
which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); (2) there shall be at
least one Trustee who is an employee or officer of, or is
affiliated with the Parent (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 re-
quirements.
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
31<PAGE>
Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.
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 super-
vision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation pub-
lishes 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 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 Institu-
tional 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 ac-
quire 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 In-
denture Act.
(d) The Convertible 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:
32<PAGE>
[ ]
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:
[Name of Regular Trustees]
(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 exe-
cute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to exe-
cute 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) 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 Delaware Trustee.
The initial Delaware Trustee shall be:
33<PAGE>
SECTION 5.7 Appointment, Removal and Resignation of Trust-
ees.
(a) Subject to Section 5.6(b), Trustees may be ap-
pointed 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 Com-
mon 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 ac-
cepted 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 instru-
ment 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:
(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
34<PAGE>
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distrib-
uted 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 Dela-
ware 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 Succes-
sor 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 resig-
nation, 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 5.8 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 evi-
dence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.9 Effect of Vacancies.
35<PAGE>
The death, resignation, retirement, removal, bank-
ruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to annul the
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 Decla-
ration.
SECTION 5.10 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 law-
fully 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 5.11 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
36<PAGE>
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 dele-
gate 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 in-
struments 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 5.12 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 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 Institu-
tional 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 Convertible
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
37<PAGE>
extent funds are available for that purpose, to make a distribu-
tion (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 convertible preferred securities repre-
senting undivided beneficial interests in the assets of the Trust
having such terms as are set forth in Annex I (the "Convertible
Preferred Securities") and one class of convertible common secu-
rities, 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 Con-
vertible 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, al-
though at the date of the execution and delivery of the Declara-
tion any such person was not such a Regular Trustee. Certifi-
cates 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 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.
38<PAGE>
(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 Convertible 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 Convertible 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 Convertible Preferred Securities may
be presented for payment ("Paying Agent). The Trust shall
maintain an office or agency where Securities may be presented
for conversion ("Conversion Agent"). The Trust may appoint the
Paying Agent and the Conversion Agent and may appoint one or more
additional paying agents and one or more additional conversion
agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent and the term
"Conversion Agent" includes any additional conversion agent. The
Trust may change any Paying Agent or Conversion Agent without
prior notice to any Holder. The Trust shall notify the Institu-
tional 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 or Conversion Agent, the Institu-
tional Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent or Conversion Agent. The
Trust shall act as Paying Agent and Conversion Agent for the
Common Securities.
The Trust initially appoints the Institutional Trustee
as Conversion Agent for the Convertible Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
39<PAGE>
(ii) upon the filing of a certificate of dissolution
or its equivalent with respect to the Holder of the Common
Securities or the Sponsor; the filing of a certificate of
cancellation with respect to the Trust or the revocation of
the Holder of the Common Securities or the Sponsor's charter
and the expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolu-
tion of the Holder of the Common Securities, the Sponsor or
the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemp-
tion thereof shall have been paid to the Holders in accor-
dance with the terms of the Securities;
(v) upon the occurrence and continuation of a Spe-
cial Event pursuant to which the Trust shall have been dis-
solved in accordance with the terms of the Securities and
all of the Debentures endorsed thereon shall have been dis-
tributed to the Holders of Securities in exchange for all of
the Securities; or
(vi) 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), the Trustees shall
file a certificate of cancellation with the Secretary of State of
the State of Delaware.
(c) The provisions of Section 3.9 and 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 trans-
fer or purported transfer of any Security not made in accordance
with this Declaration shall be null and void.
40<PAGE>
(b) Subject to this Article IX, Convertible Pre-
ferred 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 transfer-
or obtain the written opinion of nationally recognized indepen-
dent 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.
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 indem-
nity 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 Certifi-
cate, the Regular Trustees shall cause one or more new Certifi-
cates 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 Certifi-
cate shall be entitled to the rights and subject to the obliga-
tions of a Holder hereunder upon the receipt by such transferee
of a Certificate. By acceptance of a Certificate, each trans-
feree shall be deemed to have agreed to be bound by this Declara-
tion.
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 Securi-
ties represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accord-
ingly, shall not be bound to recognize any equitable or other
41<PAGE>
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 Con-
vertible Preferred Securities, the Convertible Preferred Securi-
ties Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Convertible Pre-
ferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf
of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Convertible Preferred
Security Beneficial Owner will receive a definitive Convertible
Preferred Security Certificate representing such Convertible
Preferred Security Beneficial Owner's interests in such Global
Certificates, except as provided in Section 9.7. Unless and
until definitive, fully registered Convertible Preferred Security
Certificates (the "Definitive Convertible Preferred Security
Certificates") have been issued to the Convertible 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 Certificates and receiving approvals, votes or con-
sents hereunder) as the Holder of the Convertible Preferred
Securities and the sole holder of the Global Certificates
and shall have no obligation to the Convertible Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Sec-
tion 9.4 conflict with any other provisions of this Declara-
tion, the provisions of this Section 9.4 shall control; and
(d) the rights of the Convertible Preferred Security
Beneficial Owners shall be exercised only through the Clear-
ing Agency and shall be limited to those established by law
and agreements between such Convertible Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clear-
ing Agency Participants and receive and transmit payments of
42<PAGE>
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 Con-
vertible Preferred Security Holders is required under this Decla-
ration, unless and until Definitive Convertible Preferred Securi-
ty Certificates shall have been issued to the Convertible Pre-
ferred 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 Convertible Preferred Securi-
ty Holders to the Clearing Agency, and shall have no notice
obligations to the Convertible 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 Convertible
Preferred Securities, the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to
such Convertible Preferred Securities.
SECTION 9.7 Definitive Convertible Preferred Security Cer-
tificates.
If:
(a) a Clearing Agency elects to discontinue its ser-
vices as securities depositary with respect to the Convert-
ible 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 Convertible Pre-
ferred Securities,
then:
(c) Definitive Convertible Preferred Security Cer-
tificates shall be prepared by the Regular Trustees on
behalf of the Trust with respect to such Convertible Pre-
ferred Securities; and
43<PAGE>
(d) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Certificates to
be delivered to Convertible 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, said instructions of the Clearing Agency. The
Definitive Convertible 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 Convertible Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certifi-
cates.
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 Certifi-
cate, 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
44<PAGE>
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 Declara-
tion, 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.
(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 Convertible 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, respon-
sible 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 willful misconduct
with respect to such acts or omissions.
45<PAGE>
(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, opin-
ions, reports or statements as to the value and amount of the as-
sets, 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
(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 accept-
ed 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
46<PAGE>
constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indem-
nified 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 affect-
ing the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such ex-
press standard and shall not be subject to any other or dif-
ferent standard imposed by this Declaration or by applicable
law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer 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 op-
posed 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, set-
tlement, 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.
47<PAGE>
(ii) The Debenture Issuer 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 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 de-
fense 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 circum-
stances 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 (includ-
ing 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 Debenture Issuer only as authorized in
the specific case upon a determination that indemnification
of the Company Indemnified Person is proper in the circum-
stances because he has met the applicable standard of con-
duct set forth in paragraphs (i) and (ii). Such determina-
tion 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.
48<PAGE>
(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 Debenture Issuer 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 Debenture Issuer as authorized in this
Section 10.4(a). Notwithstanding the foregoing, no advance
shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by
a majority vote of a quorum of disinterested Regular Trust-
ees, (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 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 Indem-
nified 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 Convertible 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 ad-
vancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the
Debenture Issuer or Convertible 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 Debenture Issuer 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 obliga-
tions then existing.
49<PAGE>
(vii) The Debenture Issuer 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 Deben-
ture Issuer 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 (in-
cluding 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 constit-
uent 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 rati-
fied, 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 Debenture Issuer 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, part-
ners, 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
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration or 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.
50<PAGE>
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee
and the Institutional Trustee may engage in or possess an inter-
est 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 Securi-
ties 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 competi-
tive 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 pres-
ent 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 account-
ing, 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
51<PAGE>
by and reported upon as of the end of each Fiscal Year of the
Trust by a firm of independent certified public accountants se-
lected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared
and delivered to each of the Holders of Securities, within 90
days after the end of each Fiscal Year of the Trust, annual
financial statements of the Trust, including a balance sheet of
the Trust as of the end of such Fiscal Year, and the related
statements of income or loss;
(c) The Regular Trustees shall cause to be duly pre-
pared 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.
(d) The Regular Trustees shall cause to be duly pre-
pared 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, howev-
er, 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
52<PAGE>
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.
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 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 pur-
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Institutional Trustee shall have first received an Offi-
cers' Certificate from each of the Trust and the Sponsor
53<PAGE>
that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Secu-
rities);
(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 first received:
(A) 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 (in-
cluding the terms of the Securities); and
(B) 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 Decla-
ration (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
(C) cause the Trust to be deemed to be an In-
vestment 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 ad-
versely 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 9.1(c) and this Section 12.1 shall not
be amended without the consent of all of the Holders of the Secu-
rities;
(e) Article IV shall not be amended without the con-
sent of the Holders of a Majority in liquidation amount of the
Common Securities and;
54<PAGE>
(f) the rights of the holders of the Common Securi-
ties under Article V to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without the con-
sent of the Holders of a Majority in liquidation amount of the
Common Securities; and
(g) notwithstanding Section 12.1(c), this Declara-
tion 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 obliga-
tions 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 Hold-
ers; and
(v) to modify, eliminate and add to any provision of
the Amended Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Secu-
rities 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 enti-
tled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Con-
vertible 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 liq-
uidation amount of 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 S-
ecurities calling a meeting shall specify in writing the Security
55<PAGE>
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 per-
centage 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
Convertible 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 S-
ecurities owning not less than the minimum amount of Securi-
ties in liquidation amount that would be necessary to autho-
rize 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 other-
wise 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
56<PAGE>
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 Convertible
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 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 Institutional Trustee is a national banking
association with trust powers, duly organized, validly
existing and in good standing under the laws of the United
States, with trust power and authority to execute and deliv-
er, and to carry out and perform its obligations under the
terms of, the Declaration;
(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
57<PAGE>
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, reorgani-
zation, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general prin-
ciples 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 per-
formance by the Institutional Trustee, of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trus-
tee.
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 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 Delaware Trustee is a Delaware banking cor-
poration with trust powers, duly organized, validly existing
and in good standing under the laws of the State of Dela-
ware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms
of, the Declaration.
(b) The Delaware Trustee has been authorized to per-
form 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 Trust-
ee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, morato-
rium, insolvency, and other similar laws affecting credit-
ors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the
58<PAGE>
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 perfor-
mance by the Delaware Trustee, of the Declaration.
(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 certi-
fied 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):
NORAM CAPITAL FINANCING [I] [II]
c/o NorAm Energy Corp.
1600 Smith Street
32nd Floor
Houston, Texas 77002
Attention:__________________
(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 Securi-
ties):
________________
________________
________________
[address]
59<PAGE>
(c) if given to the Institutional Trustee, at its
Corporate Trust Office to the attention of ______________
(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):
NorAm Energy Corp.
1600 Smith Street
32nd Floor
Houston, Texas 77002
Attention:________________
(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 deliv-
ered 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 hereun-
der 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 interpreta-
tion of this Declaration or any provision hereof.
60<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 appli-
cation of such provision to any Person or circumstance, shall be
held invalid, the remainder of this Declaration, or the applica-
tion 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.
61<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
_______________________________
____________, as Regular Trustee
_______________________________
____________, as Regular Trustee
_____________________
as Delaware Trustee
By:____________________________
Name:
Title:
__________________________, as In-
stitutional Trustee
By:___________________________
Name:
Title:
NorAm Energy Corp., as Sponsor
By:__________________________
Name:
Title:
62<PAGE>
ANNEX I
TERMS OF
___% CONVERTIBLE PREFERRED SECURITIES
___% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of October __, 1995 (as amended
from time to time, the "Declaration"), the designation, rights,
privileges, restrictions, preferences and other terms and provi-
sions of the Convertible 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) Convertible Preferred Securities. [
] Convertible Preferred Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of [
] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $__ per convertible
preferred security, are hereby designated for the purposes of
identification only as "_____% Trust Originated Convertible
Preferred Securities (the "Convertible Preferred Securities").
The Convertible Preferred Security Certificates evidencing the
Convertible Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of
any stock exchange on which the Convertible Preferred Securities
are listed.
(b) Common Securities. [ ] Common
Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of [ ] dollars
($[ ]) and a liquidation amount with respect to the
assets of the Trust of $__ per common security, are hereby desig-
nated for the purposes of identification only as "______% Trust
Originated Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities
I-1<PAGE>
shall be substantially in the form of Exhibit A-2 to the Decla-
ration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or prac-
tice.
2. Distributions.
(a) Distributions payable on each Security will be
fixed at a rate per annum of ______% (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 distribu-
tions 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.
(b) Distributions on the Securities will be cumula-
tive, will accrue from ________, 1995, and will be payable quar-
terly in arrears, on [March 31, June 30, September 30, and Decem-
ber 31] of each year, commencing on __________, 1995, 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 "Ex-
tension 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 de-
ferred. Despite such deferral, quarterly Distributions will con-
tinue 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 Distribu-
I-2<PAGE>
tions 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 Convertible
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 Convertible Preferred Securities will
be made as described under the heading "Description of the Con-
vertible Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dat-
ed______, 1995, to the Prospectus dated ______, 1995 (together,
the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Trust, certain other
business trusts and a certain partnership. The relevant record
dates for the Common Securities shall be the same record date as
for the Convertible Preferred Securities. If the Convertible
Preferred Securities shall not continue to remain in book-entry
only form, the relevant record dates for the Convertible Pre-
ferred 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 Distribu-
tion 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 regis-
tered on the relevant record date, and such defaulted Distribu-
tion will instead be payable to 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 Busi-
ness 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 imme-
I-3<PAGE>
diately preceding Business Day, in each case with the same force
and effect as if made on such date.
(d) In the event of an election by the Holder to
convert its Securities through the Conversion Agent into NorAm
Common Stock pursuant to the terms of the Securities as forth in
this Annex I to the Declaration, no payment, allowance or adjust-
ment shall be made with respect to accumulated and unpaid Distri-
butions on such Securities, or be required to be made; provided
that Holders of Securities at the close of business on any record
date for the payment of Distributions will be entitled to receive
the Distributions payable on such Securities on the corresponding
payment date notwithstanding the conversion of such Securities
into NorAm Common Stock following such record date.
(e) 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 disso-
lution, 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 Distribu-
tion"), 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 Distri-
bution can be paid only in part because the Trust has insuffi-
cient 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.
I-4<PAGE>
(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 Convertible
Preferred Securities will be redeemed Pro Rata and the Convert-
ible Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(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' inter-
ests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); pro-
vided, however, that, as a condition of such dissolution and dis-
tribution, 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 Special Event by taking some ministerial ac-
tion, 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
I-5<PAGE>
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 Trust-
ees, 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) in the event of any Special Event,
after receipt of a Tax Event Opinion or Investment Company Event
Opinion (as defined hereinafter), as the case may be, the Regular
Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, the Deben-
ture 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 Special 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; provid-
ed, however, that, if at the time there is available to the Trust
the opportunity to eliminate, within such 90 day period, the
Special 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 Supple-
ment, as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regula-
tions thereunder) of the United States or any political subdi-
vision or taxing authority therefor or therein, or (b) any amend-
ment to, or change in, an interpretation or application of any
such laws or regulations by any legislative body, court, govern-
mental agency or regulatory authority, which amendment or change
is enacted, promulgated, issued or announced or which interpreta-
tion 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
I-6<PAGE>
to United States federal income tax with respect to interest ac-
crued 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 recog-
nized independent counsel experienced in practice under the In-
vestment Company Act (an "Investment Company Event Opinion")
that, as a result of the occurrence of a change in law or regula-
tion 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 con-
sidered 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 Supple-
ment.
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 Convertible Preferred Securities, will receive a
registered global certificate or certificates representing the
Debentures to be delivered upon such distribution and any certif-
icates representing Securities, except for certificates repre-
senting Convertible 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 Debentu-
res 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 ac-
crued and unpaid Distributions on such Securities until such cer-
tificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(d) The Trust may not redeem fewer than all the out-
standing 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.
I-7<PAGE>
(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 Convertible Preferred Securities were listed immediately
prior to the distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distri-
bution of Debentures in exchange for the Securities (a "Re-
demption/Distribution Notice") will be given by the Trust by
mail to each Holder of Securities to be redeemed or exchang-
ed 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/ Dis-
tribution 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 Redemp-
tion/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 Convertible
Preferred Securities, it being understood that, in respect
of Convertible 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 nomi-
nee, 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
I-8<PAGE>
(A) while the Convertible Preferred Securities are in book-
entry only form, with respect to the Convertible Preferred
Securities, by 12:00 noon, New York City time, on the re-
demption 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 irrevoca-
bly with the Depository or its nominee (or successor Clear-
ing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Convertible
Preferred Securities and will give the Depository irrevo-
cable instructions and authority to pay the Redemption Price
to the Holders of the Convertible Preferred Securities, and
(B) with respect to Convertible Preferred Securities issued
in definitive form and Common Securities, provided that the
Debenture Issuer has paid the Institutional Trustee a suffi-
cient amount of cash in connection with the related redemp-
tion or maturity of the Debentures, the Institutional Trust-
ee will pay the relevant Redemption Price to the Holders of
such Securities by check mailed to the address of the rele-
vant 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 Secu-
rities 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 pay-
I-9<PAGE>
ment, in which case the actual payment date will be consid-
ered the date fixed for redemption for purposes of calcu-
lating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to (A) in re-
spect of the Convertible Preferred Securities, the Deposito-
ry or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if
Definitive Convertible 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 (in-
cluding, without limitation, United States federal securi-
ties 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 Convertible Preferred
Securities by tender, in the open market or by private
agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any
time, at their option, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of
NorAm Common Stock in the manner described herein on and subject
to the following terms and conditions:
(a) The Securities will be convertible at the office
of the Conversion Agent into fully paid and nonassessable shares
of NorAm Common Stock pursuant to the Holder's direction to the
Conversion Agent to exchange such Securities for a portion of the
Debentures theretofor held by the Trust on the basis of one Secu-
rity per $__ principal amount of Debentures, and immediately con-
vert such amount of Debentures into fully paid and nonassessable
shares of NorAm Common Stock at an initial rate of ________
shares of NorAm Common Stock per $__ principal amount of Deben-
tures (which is equivalent to a conversion price of $______ per
share of NorAm Common Stock, subject to certain adjustments set
forth in the terms of the Debentures (as so adjusted, "Conversion
Price")).
(b) In order to convert Securities into NorAm Common
Stock the Holder shall submit to the Conversion Agent at the
office referred to above an irrevocable request to convert
I-10<PAGE>
Securities on behalf of such Holder (the "Conversion Request"),
together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the
number of Securities to be converted and the name or names, if
other than the Holder, in which the shares of NorAm Common Stock
should be issued and (ii) direct the Conversion Agent (a) to
exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on
behalf of such Holder, into NorAm Common Stock (at the conversion
rate specified in the preceding paragraph). The Conversion Agent
shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and
the Trust shall, upon receipt of such notice, deliver to the Con-
version Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent
shall thereupon notify NorAm Energy Corp. of the Holder's elec-
tion to convert such Debentures into shares of NorAm Common
Stock. Holders of Securities at the close of business on a
Distribution record date will be entitled to receive the Distri-
bution payable on such securities on the corresponding Distribu-
tion payment date notwithstanding the conversion of such Securi-
ties following such record date but prior to such distribution
payment date. Except as provided above, neither the Trust nor
the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities
(including any Additional Amounts accrued thereon) surrendered
for conversion, or on account of any accumulated and unpaid divi-
dends on the shares of NorAm Common Stock issued upon such con-
version. Securities shall be deemed to have been converted
immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Securities is received the
Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive the NorAm
Common Stock issuable upon conversion of the Debentures shall be
treated for all purposes as the record holder or holders of such
NorAm Common Stock at such time. As promptly as practicable on
or after the Conversion Date, NorAm Energy Corp. shall issue and
deliver at the office of the Conversion Agent a certificate or
certificates for the number of full shares of NorAm Common Stock
issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Per-
sons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent
shall distribute such certificate or certificates to such Person
or Persons.
I-11<PAGE>
(c) Each Holder of a Security by his acceptance
thereof appoints [The Bank of New York] "Conversion Agent" for
the purpose of effecting the conversion of Securities in accor-
dance with this Section. In effecting the conversion and trans-
actions described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Securities directing it to
effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Securities from time to time
for Debentures held by the Trust in connection with the conver-
sion of such Securities in accordance with this Section and (ii)
to convert all or a portion of the Debentures into NorAm Common
Stock and thereupon to deliver such shares of NorAm Common Stock
in accordance with the provisions of this Section and to deliver
to the Trust a new Debenture or Debentures for any resulting
unconverted principal amount.
(d) No fractional shares of NorAm Common Stock will be
issued as a result of conversion, but in lieu thereof, such
fractional interest will be in cash by NorAm Energy Corp. to the
Trust, which in turn will make such payment to the Holder or
Holders of Securities so converted.
(e) NorAm Energy Corp. shall at all times reserve and
keep available out of its authorized and unissued NorAm Common
Stock, solely for issuance upon the conversion of the Debentures,
free from any preemptive or other similar rights, such number of
shares of NorAm Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstand-
ing. Notwithstanding the foregoing, NorAm Energy Corp. shall be
entitled to deliver upon conversion of Debentures, shares of
NorAm Common Stock reacquired and held in the treasury of NorAm
Energy Corp. (in lieu of the issuance of authorized and unissued
shares of NorAm Common Stock), so long as any such treasury
shares are free and clear of all liens, charges, security inter-
ests or encumbrances. Any shares of NorAm Common Stock issued
upon conversion of the Debentures shall be duly authorized,
validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of NorAm Common Stock received upon conversion
of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of NorAm Energy Corp. and
the Trust shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or
other authorizations as may be required by law, and shall comply
with all applicable requirements as to registration or quali-
fication of the NorAm Common Stock (and all requirements to list
the NorAm Common Stock issuable upon conversion of Debentures
I-12<PAGE>
that are at the time applicable), in order to enable NorAm Energy
Corp. to lawfully issue NorAm Common Stock to the Trust upon
conversion of the Debentures and the Trust to lawfully deliver
the NorAm Common Stock to each Holder upon conversion of the
Securities.
(f) NorAm Energy Corp. will pay any and all taxes that
may be payable in respect of the issue or delivery of shares of
NorAm Common Stock on conversion of Debentures and the delivery
of the shares of NorAm Common Stock by the Trust upon conversion
of the Securities. NorAm Energy Corp. shall not, however, be
required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of NorAm C-
ommon Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid
to the Trust the amount of any such tax, or has established to
the satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit
the requirement of the Trust to withhold taxes pursuant to the
terms of the Securities or set forth in this Annex I to the
Declaration or to the Declaration itself or otherwise require the
Institutional Trustee or the Trust to pay any amounts on account
of such withholdings.
6. Voting Rights - Convertible 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 Convertible 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
Convertible Preferred Securities, voting separately as a class
may direct the time, method, and place of conducting any proceed-
ing 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 avail-
able to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentu-
res, (ii) waive any past default and its consequences that is
waivable under Section ___ 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
I-13<PAGE>
consent or act of the Holders of greater than a majority of the
Holders 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
Convertible Preferred Securities which the relevant Super Majori-
ty 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 Convertible 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
Convertible 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 the Institutional Trustee
fails to enforce its rights under the Declaration, any Holder of
Convertible Preferred Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trust-
ee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other
Person.
Any approval or direction of Holders of Convertible
Preferred Securities may be given at a separate meeting of
Holders of Convertible 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 Convertible
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 Convertible 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 pro-
posed 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 Convertible
Preferred Securities will be required for the Trust to redeem and
cancel Convertible Preferred Securities or to distribute the
I-14<PAGE>
Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Convertible Preferred
Securities are entitled to vote or consent under any of the cir-
cumstances described above, any of the Convertible 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.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), (c) and 8
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 Convertible
Preferred Securities has been cured, waived, or otherwise elimi-
nated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquida-
tion 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 avail-
able to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Deben-
tures, (ii) waive any past default and its consequences that is
waivable under Section ____ 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
I-15<PAGE>
6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Convertible 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. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities
may institute a legal proceeding directly against any Person to
enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institu-
tional Trustee or any other Person.
Any approval or direction of Holders of Common Securi-
ties 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 con-
sent. 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 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 Securi-
ties 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.
8. 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 disso-
I-16<PAGE>
lution, 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 Convert-
ible Preferred Securities or only the Common Securities, then
only the affected class will be entitled to vote on such amend-
ment 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 termina-
tion 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, modi-
fication or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; pro-
vided, 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 Majori-
ty"), the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquida-
tion 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.
9. 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 liquidation amount of all Securities
outstanding unless, in relation to a payment, an Event of Default
I-17<PAGE>
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 Convertible Preferred Securities pro rata
according to the aggregate liquidation amount of Convertible
Preferred Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Convertible Preferred Securi-
ties outstanding, and only after satisfaction of all amounts owed
to the Holders of the Convertible 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.
10. Ranking.
The Convertible Preferred Securities rank pari passu
and payment thereon shall be made Pro Rata with the Common Secu-
rities 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 Convertible Preferred
Securities.
11. Listing.
The Regular Trustees shall use their best efforts to
cause the Convertible Preferred Securities to be listed for
quotation on the New York Stock Exchange, Inc.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Convertible Preferred Securities and
Common Securities, by the acceptance thereof, agrees to the
provisions of the Convertible Preferred Securities Guarantee and
the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the
Indenture.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive
rights to subscribe for any additional securities.
I-18<PAGE>
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Convertible Preferred Securities Guarantee or the Common Securi-
ties 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-19<PAGE>
EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
[IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A
GLOBAL CERTIFICATE INSERT - This Convertible 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 Convertible Preferred Security is exchangeable
for Convertible 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 trans-
fer of this Convertible Preferred Security (other than a transfer
of this Convertible Preferred Security as a whole by the Deposi-
tary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Deposi-
tary) may be registered except in limited circumstances.
Unless this Convertible 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
Convertible 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 Convertible Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Convertible Preferred Securities
of
NORAM FINANCING [I] [II]
____% Convertible Preferred Securities
(liquidation amount $__ per Convertible Preferred Security)
A1-1<PAGE>
NORAM FINANCING [I] [II], a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that ______________ (the "Holder") is the regis-
tered owner of convertible preferred securities of the Trust
representing undivided beneficial interests in the assets of the
Trust designated the _____% Trust Originated Convertible Pre-
ferred Securities (liquidation amount $__ per Convertible Pre-
ferred Security) (the "Convertible Preferred Securities"). The
Convertible 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
Convertible 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 _______, 1995, as the same may be amended from time to time
(the "Declaration"), including the designation of the terms of
the Convertible 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 Convertible Preferred Securi-
ties Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Convertible 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 indebted-
ness and the Convertible Preferred Securities as evidence of
indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certif-
icate this ___ day of , 199 .
NorAm Financing [I] [II]
By:_________________________
Name:
Title: Regular Trustee
A1-2<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Convertible Preferred
Security will be fixed at a rate per annum of ______% (the
"Coupon Rate") of the stated liquidation amount of $__ per
Preferred Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Dis-
tributions in arrears for more than one quarter will bear inter-
est 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 inter-
est 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 ar-
rears, on [March 31, June 30, September 30 and December 31 of
each year, commencing on ______ __, 1995,] to [Holders of record
fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the
Debentures.] The Debenture Issuer has the right under the Inden-
ture to defer payments of interest by extending the interest pay-
ment 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 Distribu-
tions 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
A1-3<PAGE>
Issuer may commence a new Extension Period, subject to the above
requirements.
The Convertible Preferred Securities shall be redeem-
able as provided in the Declaration.
The Convertible Preferred Securities shall be convert-
ible into shares of NorAm Common Stock, through (i) the exchange
of Preferred Securities for a portion of the Debentures and (ii)
the immediate conversion of such Debentures into NorAm Common
Stock, in the manner and according to the terms set forth in the
Declaration.
A1-4<PAGE>
CONVERSION REQUEST
To: [___________________________]
as Institutional Trustee of
NorAm Financing [I] [II]
The undersigned owner of these Preferred Securities
hereby irrevocably exercises the option to convert these Convert-
ible Preferred Securities, or the portion below designated, into
Common Stock of NorAm Energy Corp. (the "NorAm Common Stock") in
accordance with the terms of the Amended and Restated Declaration
of Trust (the "Declaration"), dated as of ________, 1995, by
_______________, _______________ and _______________, as Regular
Trustees,_______________________, as Delaware Trustee, [______-
_______________, as Institutional Trustee,] NorAm Energy Corp.,
as Sponsor, and by the Holders, from time to time, of individual
beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the
option to convert these Convertible Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Convertible
Preferred Securities for a portion of the Debentures (as that
term is defined in the Declaration) held by the Trust (at the
rate of exchange specified in the terms of the Convertible
Preferred Securities set forth as Annex I to the Declaration) and
(ii) immediately convert such Debentures on behalf of the under-
signed, into NorAm Common Stock (at the conversion rate specified
in the terms of the Convertible Preferred Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion
Agent that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be
issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If
shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
A1-5<PAGE>
Date: ____________, ____
in whole __ in part __
Number of Preferred Securities to
be converted: ___________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of NorAm Common
Stock are to be issued, along with
the address or addresses of such
person or persons
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identify-
ing Number
_______________________________________
_______________________________________
_______________________________________
_______________________________________
Signature Guarantee:*
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
A1-6<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Convertible 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 Convertible 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 Con-
vertible Preferred Security Certificate)
A1-7<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NORAM FINANCING [I] [II]
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
NORAM FINANCING [I] [II] 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 desig-
nated the ______% Trust Originated Common Securities (liquida-
tion 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 Securi-
ties 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 _______, 1995, 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 Guaran-
tee 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.
A2-1<PAGE>
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebted-
ness and the Common Securities as evidence of indirect beneficial
ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certif-
icate this ___ day of ____________, 199__.
NorAm Financing [I] [II]
By:________________________________
Name:
Title: Regular Trustee
A2-2<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be
fixed at a rate per annum of ______% (the "Coupon Rate") of the
stated liquidation amount of $__ 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 pay-
ments are made in respect of the Debentures held by the Inst-
itutional 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 Distri-
bution period on the basis of a 360-day year of twelve 30-day
months, and for any period shorter than a full quarterly Distri-
bution 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 ar-
rears, on [March 31, June 30, September 30 and December 31 of
each year, commencing on _______ __, 1995,] to Holders of record
fifteen (15) days prior to such payment dates, which payment
dates shall correspond to the interest payment dates on the
Debentures. The Debenture Issuer has the right under the Inden-
ture to defer payments of interest by extending the interest pay-
ment 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 Distribu-
tions 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
A2-3<PAGE>
Issuer may commence a new Extension Period, subject to the above
requirements.
The Common Securities shall be redeemable as provided
in the Declaration.
The Common Securities shall be convertible into shares
of NorAm Common Stock, through (i) the exchange of Common Securi-
ties for a portion of the Debentures and (ii) the immediate
conversion of such Debentures into NorAm Common Stock, in the
manner and according to the terms set forth in the Declaration.
A2-4<PAGE>
CONVERSION REQUEST
To: ______________________
as Institutional Trustee of
NorAm Financing [I] [II]
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securi-
ties, or the portion below designated, into Common Stock of NORAM
ENERGY CORP. (the "NorAm Common Stock") in accordance with the
terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of October __, 1995, by _______________,
________________ and _________________, as Regular Trustees,
________________, as Delaware Trustee, __________________, as
Institutional Trustee, NorAm Energy Corp., as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in
the Trust to be issued pursuant to the Declaration. Pursuant to
the aforementioned exercise of the option to convert these Common
Securities, the undersigned hereby directs the Conversion Agent
(as that term is defined in the Declaration) to (i) exchange such
Common Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of
exchange specified in the terms of the Common Securities set
forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into NorAm Common
Stock (at the conversion rate specified in the terms of the
Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion
Agent that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be
issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If
shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
A2-5<PAGE>
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be
converted: _____________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of NorAm Common
Stock are to be issued, along with
the address or addresses of such
person or persons
__________________________
__________________________
__________________________
__________________________
__________________________
___________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identify-
ing Number
______________________________
______________________________
______________________________
Signature Guarantee:* __________________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
A2-6<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)
Signature Guarantee**: ________________________________________
** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
A2-7<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1<PAGE>
[Form of Amended and
Restated Declaration of
Trust for non- convertible
securities]
------------------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
NORAM FINANCING [I] [II]
Dated as of October __, 1995
------------------------------------<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . 8
SECTION 2.2 Lists of Holders of Securities . . . . . . 9
SECTION 2.3 Reports by the Institutional Trustee . . . 9
SECTION 2.4 Periodic Reports to Institutional Trustee 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . 10
SECTION 2.6 Events of Default; Waiver . . . . . . . . 10
SECTION 2.7 Event of Default; Notice . . . . . . . . . 12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . 13
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . 13
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . 13
SECTION 3.4 Authority . . . . . . . . . . . . . . . . 13
SECTION 3.5 Title to Property of the Trust . . . . . . 14
SECTION 3.6 Powers and Duties of the Regular Trustees 14
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees . . . . . . . . . . . . . . . 17
SECTION 3.8 Powers and Duties of the Institutional
Trustee. . . . . . . . . . . . . . . . . . 18
SECTION 3.9 Certain Duties and Responsibilities of
the Institutional Trustee . . . . . . . . 20
SECTION 3.10 Certain Rights of Institutional Trustee . 23
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . 25
SECTION 3.12 Execution of Documents . . . . . . . . . . 25
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . 26
SECTION 3.14 Duration of Trust . . . . . . . . . . . . 26
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . 26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . 28
SECTION 4.2 Responsibilities of the Sponsor . . . . . 28
i<PAGE>
Page
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . 29
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . 29
SECTION 5.3 Institutional Trustee; Eligibility . . . . 30
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . 31
SECTION 5.5 Regular Trustees . . . . . . . . . . . . . 31
SECTION 5.6 Delaware Trustee . . . . . . . . . . . . . 31
SECTION 5.7 Appointment, Removal and Resignation of
Trustees . . . . . . . . . . . . . . . . . 32
SECTION 5.8 Vacancies among Trustees . . . . . . . . . 33
SECTION 5.9 Effect of Vacancies . . . . . . . . . . . 33
SECTION 5.10 Meetings . . . . . . . . . . . . . . . . . 34
SECTION 5.11 Delegation of Power . . . . . . . . . . . 34
Section 5.12 Merger, Conversion, Consolidation or Suc-
cession to Business . . . . . . . . . . . 35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . 35
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities . 36
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . 37
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities . . . . . . . . . . 38
SECTION 9.2 Transfer of Certificates . . . . . . . . . 39
SECTION 9.3 Deemed Security Holders . . . . . . . . . 39
SECTION 9.4 Book Entry Interests . . . . . . . . . . . 39
SECTION 9.5 Notices to Clearing Agency . . . . . . . . 40
SECTION 9.6 Appointment of Successor Clearing Agency . 40
SECTION 9.7 Definitive Preferred Security Certific-
ates . . . . . . . . . . . . . . . . . . . 41
ii<PAGE>
Page
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Cer-
tificates . . . . . . . . . . . . . . . . 41
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . 42
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . 43
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . 43
SECTION 10.4 Indemnification . . . . . . . . . . . . . 44
SECTION 10.5 Outside Businesses . . . . . . . . . . . . 48
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . 48
SECTION 11.2 Certain Accounting Matters . . . . . . . . 48
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . 49
SECTION 11.4 Withholding . . . . . . . . . . . . . . . 49
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . 50
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent . . . . . . . . 52
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Inst-
itutional Trustee . . . . . . . . . . . . 54
SECTION 13.2 Representations and Warranties of Dela-
ware Trustee . . . . . . . . . . . . . . . 55
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices . . . . . . . . . . . . . . . . . 56
SECTION 14.2 Governing Law . . . . . . . . . . . . . . 57
SECTION 14.3 Intention of the Parties . . . . . . . . . 57
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . 57
SECTION 14.5 Successors and Assigns . . . . . . . . . . 57
SECTION 14.6 Partial Enforceability . . . . . . . . . . 58
iii<PAGE>
Page
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . 58
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 UNDERWRITING AGREEMENT . . . . . . . . . . C-1
iv<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 inter-
pretation of any of its terms or provisions.
v<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NORAM FINANCING [I] [II]
____________, 1995
AMENDED AND RESTATED DECLARATION OF TRUST ("Declara-
tion") dated and effective as of October __, 1995, by the Trust-
ees (as defined herein), the Sponsor (as defined herein) and by
the holders, from time to time, of undivided beneficial interests
in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established NorAm
Financing [I] [II] (the "Trust"), a trust under the Delaware
Business Trust Act pursuant to a Declaration of Trust dated as of
October __, 1995, (the "Original Declaration") and a Certificate
of Trust filed with the Secretary of State of the State of
Delaware on October __, 1995, 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 gov-
erning 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 securi-
ties representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this
Declaration.<PAGE>
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 Dec-
laration" are to this Declaration as modified, supplemented
or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sec-
tions 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 thereun-
der.
"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.
2<PAGE>
"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 Securi-
ties.
"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 [choose one of the following
options: [Use option 1 if no over-allotment -- ____________,
1995] [Use Option 2 if over-allotment is provided -- the "Closing
Time" and each "Date of Delivery" under the Underwriting Agree-
ment]].
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commis-
sion.
"Common Securities Guarantee" means the guarantee
agreement to be dated as of ___________, 1995 of the Sponsor in
respect of the Common Securities.
"Common Security" has the meaning specified in Section
7.1.
"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.
3<PAGE>
"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 [address].
"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 NorAm Energy Corp. in its
capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means _________________, 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 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.
"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.
4<PAGE>
"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 _______,
1995, among the Debenture Issuer and the Debenture Trustee, and
any indenture supplemental thereto pursuant to which the Deben-
tures 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 Securi-
ties 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 Securities or
Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggre-
gate 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 percentag-
es 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
5<PAGE>
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 Certifi-
cate 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
3.8(h).
"Person" means a legal person, including any individu-
al, corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust, unincorpo-
rated 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 ______, 1995, 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).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of
Exhibit A-1.
6<PAGE>
"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.
"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 out-
standing 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-presi-
dent, 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 NorAm Energy Corp., a Delaware corpo-
ration, 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 Sec-
tion 2.6(a)(ii).
7<PAGE>
"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 together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of out-
standing 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 redemp-
tion, liquidation or otherwise, plus accrued and unpaid Dis-
tributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regula-
tions, 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 provi-
sions 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 provi-
sions 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.
"Underwriting Agreement" means the Underwriting Agree-
ment for the offering and sale of Preferred Securities in the
form of Exhibit C.
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.
8<PAGE>
(b) The Institutional Trustee shall be the only
Trustee which is a Trustee for the purposes of the Trust Inden-
ture 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 Distribu-
tions, a list, in such form as the Institutional Trustee may
reasonably require, of the names and addresses of the Holders of
the Securities ("List of Holders") as of such record date, pro-
vided 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 Sections 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 1 of each year, the Institu-
tional 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
9<PAGE>
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 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 re-
quired by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Prece-
dent.
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 pursu-
ant 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:
(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 Deben-
tures (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 princi-
pal 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
10<PAGE>
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 Securi-
ties 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 princi-
pal 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 consequenc-
es 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 other-
wise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the Preferred Securi-
ties and only the Holders of the Preferred Securities will have
the right to direct the Institutional Trustee in accordance with
the terms of the Securities. The foregoing provisions of this
11<PAGE>
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)-
(1)(B) of the Trust Indenture Act and such Sections 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 Inden-
ture by the Institutional Trustee at the direction of the Holders
of the Preferred Securities, constitutes a waiver of the corre-
sponding Event of Default under this Declaration. 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 Inden-
ture 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 De-
bentures or in the payment of any sinking fund installment estab-
lished for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Respon-
sible Officer of the Institutional Trustee in good faith deter-
mines 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 ____ and ____ of the
Indenture; or
12<PAGE>
(ii) any default as to which the Institutional Trust-
ee shall have received written notice or of which a Respon-
sible Officer of the Institutional Trustee charged with the
administration of the Declaration shall have actual knowl-
edge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NorAm Financing [I] [II]," 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
NorAm Energy Corp., 1600 Smith Street, 32nd Floor, Houston, Texas
77002. 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 neces-
sary, 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.
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
13<PAGE>
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 authori-
ty of the Trustees as set forth in this Declaration.
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 Securi-
ties, and the issuance of Securities shall be limited to a
[one-time], simultaneous issuance of both Preferred Securi-
ties and Common Securities on [(1) choose one: [each]
[the]] 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, pre-
pared by the Sponsor, to the New York Stock Exchange,
14<PAGE>
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 Underwriting
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 Securi-
ties; provided, however, that the Regular Trustees shall
cause legal title 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 Trust-
ee 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;
15<PAGE>
(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 or inciden-
tal 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 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;
(o) 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 exis-
tence 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;
(p) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trust-
ees determine in their discretion to be necessary or desir-
able 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;
16<PAGE>
(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 indebted-
ness of the Debenture Issuer for United States federal
income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all appli-
cable tax returns and tax information reports that are re-
quired to be filed with respect to the Trust to be duly
prepared and filed by the Regular Trustees, on behalf of the
Trust.
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 inconsis-
tent 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 pro-
ceeds to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly pro-
vided herein;
17<PAGE>
(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 bene-
ficial ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Amended and
Restated Declaration or Annex I, (A) direct the time, method and
place of exercising any trust or power conferred upon the Deben-
ture 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 5.7. 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")
18<PAGE>
in the name of and under the exclusive control of the Insti-
tutional 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 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 pursu-
ant 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 du-
ties and obligations under this Declaration or the Trust Inden-
ture Act.
(f) The Institutional Trustee shall not resign as a
Trustee unless either:
19<PAGE>
(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 ap-
pointed and has accepted that appointment in accordance with
Section 5.7.
(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 Institu-
tional 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) The Institutional Trustee may authorize one or
more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the
Trust with respect to all securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any
time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Institutional Trustee.
(i) 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
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 In-
stitutional 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 oc-
curred (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
20<PAGE>
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 con-
strued 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 De-
fault that may have occurred:
(A) the duties and obligations of the Institu-
tional Trustee shall be determined solely by the ex-
press provisions of this Declaration and the Institu-
tional 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 state-
ments and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to
the Institutional Trustee and conforming to the re-
quirements 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 wheth-
er 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 Responsi-
ble 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
21<PAGE>
Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declara-
tion;
(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 perfor-
mance 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 Decla-
ration or indemnity reasonably satisfactory to the Institu-
tional Trustee against such risk or liability is not reason-
ably assured to it;
(v) the Institutional Trustee's sole duty with re-
spect 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 pur-
suant to Section 3.8(c)(i) and except to the extent other-
wise required by law; and
(viii) the Institutional Trustee shall not be responsi-
ble for monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this Declara-
tion, nor shall the Institutional Trustee be liable for any
default or misconduct of the Regular Trustees or the Spon-
sor.
22<PAGE>
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, instru-
ment, 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 Regu-
lar Trustees contemplated by this Declaration shall be
sufficiently evidenced by a Direction or an Officers' Cer-
tificate;
(iii) whenever in the administration of this Declara-
tion, 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 instru-
ment (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 coun-
sel 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 ob-
ligation to exercise any of the rights or powers vested in
23<PAGE>
it by this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the Insti-
tutional Trustee security and indemnity, reasonably satis-
factory to the Institutional Trustee, against the costs, ex-
penses (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, nomi-
nees 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 here-
under;
(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
Trustee or its agents alone shall be sufficient and effec-
tive 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 Trust-
ee's or its agent's taking such action;
(x) whenever in the administration of this Declara-
tion 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 Institution-
al Trustee (i) may request instructions from the Holders of
the Securities which instructions may only be given by the
24<PAGE>
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 or 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 au-
thority 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 enti-
tled 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, a
majority of or, if there are only two, any Regular Trustee or, if
there is only one, such 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.
25<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 correct-
ness. 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 sufficien-
cy 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 fifty-five (55)
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 corpo-
ration 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 Securities other secu-
rities having substantially the same terms as the Pre-
ferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Pre-
ferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and other-
wise;
(ii) the Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same
26<PAGE>
powers and duties as the Institutional Trustee as the Holder
of the Debentures;
(iii) the Preferred Securities or any Successor Secu-
rities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national secu-
rities exchange or with an other organization on which the
Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (in-
cluding 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, prefer-
ences 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, amalgama-
tion or replacement, the Sponsor has received an opinion of
a nationally recognized independent counsel to the Trust ex-
perienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, pref-
erences 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, amal-
gamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company;
(C) following such merger, consolidation, amal-
gamation 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
27<PAGE>
(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.
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 Com-
mission 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 appro-
priate 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 applica-
tion 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;
28<PAGE>
(d) to prepare for filing by the Trust with the Com-
mission 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 Underwriting
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 Securi-
ties, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(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, in the case of a natural
person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity
which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); (2) there shall be at
least one Trustee who is an employee or officer of, or is
affiliated with the Parent (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 re-
quirements.
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
29<PAGE>
(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.
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 super-
vision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation pub-
lishes 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 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 Institu-
tional Trustee shall immediately resign in the manner and with
the effect set forth in Section 5.7(c).
(c) If the Institutional Trustee has or shall ac-
quire 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 In-
denture Act.
30<PAGE>
(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:
[ ]
SECTION 5.4 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:
[Name of Regular Trustees]
(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 exe-
cute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to exe-
cute 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) 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 Delaware Trustee.
The initial Delaware Trustee shall be:
31<PAGE>
SECTION 5.7 Appointment, Removal and Resignation of Trust-
ees.
(a) Subject to Section 5.7(b), Trustees may be ap-
pointed 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 Com-
mon 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 5.7(a) until a
Successor Institutional Trustee has been appointed and has ac-
cepted 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 5.7(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 instru-
ment 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:
(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
32<PAGE>
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distrib-
uted 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 Dela-
ware 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 5.7.
(e) If no Successor Institutional Trustee or Succes-
sor Delaware Trustee shall have been appointed and accepted
appointment as provided in this Section 5.7 within 60 days after
delivery to the Sponsor and the Trust of an instrument of resig-
nation, 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 5.8 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 evi-
dence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bank-
ruptcy, dissolution, liquidation, incompetence or incapacity to
33<PAGE>
perform the duties of a Trustee shall not operate to annul the
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 5.7, 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 Decla-
ration.
SECTION 5.10 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 law-
fully 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 5.11 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
34<PAGE>
(b) the Regular Trustees shall have power to dele-
gate 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 in-
struments 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 5.12 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 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 Institu-
tional 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 Securi-
ties 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.
35<PAGE>
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 Securi-
ties") 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 Secu-
rities.
(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, al-
though at the date of the execution and delivery of the Declara-
tion any such person was not such a Regular Trustee. Certifi-
cates 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 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
36<PAGE>
with the terms of this Declaration, shall be deemed to have ex-
pressly 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 ("Paying Agent). 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 Institu-
tional 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 terminate:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution
or its equivalent with respect to the Holder of the Common
Securities or the Sponsor; the filing of a certificate of
cancellation with respect to the Trust or the revocation of
the Holder of the Common Securities or the Sponsor's charter
and the expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolu-
tion of the Holder of the Common Securities, the Sponsor or
the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemp-
37<PAGE>
tion thereof shall have been paid to the Holders in accor-
dance with the terms of the Securities;
(v) upon the occurrence and continuation of a Spe-
cial Event pursuant to which the Trust shall have been dis-
solved in accordance with the terms of the Securities and
all of the Debentures endorsed thereon shall have been dis-
tributed to the Holders of Securities in exchange for all of
the Securities; or
(vi) 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), the Trustees shall
file a certificate of cancellation with the Secretary of State of
the State of Delaware.
(c) The provisions of Section 3.9 and 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 trans-
fer 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 transfer-
or obtain the written opinion of nationally recognized indepen-
dent 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.
38<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 indem-
nity 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 Certifi-
cate, the Regular Trustees shall cause one or more new Certifi-
cates 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 Certifi-
cate shall be entitled to the rights and subject to the obliga-
tions of a Holder hereunder upon the receipt by such transferee
of a Certificate. By acceptance of a Certificate, each trans-
feree shall be deemed to have agreed to be bound by this Declara-
tion.
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 Securi-
ties represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accord-
ingly, 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 Pre-
ferred 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 Clear-
ing Agency, by, or on behalf of, the Trust. Such Global Certifi-
cates 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 Certifi-
cates, except as provided in Section 9.7. Unless and until
39<PAGE>
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 Certificates and receiving approvals, votes or con-
sents hereunder) as the Holder of the Preferred Securities
and the sole holder of the Global Certificates and shall
have no obligation to the Preferred Security Beneficial Own-
ers;
(c) to the extent that the provisions of this Sec-
tion 9.4 conflict with any other provisions of this Declara-
tion, 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 agree-
ments between such Preferred Security Beneficial Owners and
the Clearing Agency and/or the Clearing Agency Participants
and 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 Pre-
ferred 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 Pre-
ferred Securities.
40<PAGE>
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its ser-
vices 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 Securi-
ties,
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 Certificates 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,
said instructions of the Clearing Agency. The Definitive
Preferred Security Certificates shall be printed, litho-
graphed 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 desig-
nation 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 Certifi-
cates.
If:
(a) any mutilated Certificates should be surrendered
to the Regular Trustees, or if the Regular Trustees shall
41<PAGE>
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 Certifi-
cate, 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 Declara-
tion, 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.
(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
42<PAGE>
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, respon-
sible 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 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, opin-
ions, reports or statements as to the value and amount of the as-
sets, 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
43<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 accept-
ed 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 Indem-
nified 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 affect-
ing the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such ex-
press standard and shall not be subject to any other or dif-
ferent standard imposed by this Declaration or by applicable
law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer 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 pro-
ceeding, whether civil, criminal, administrative or investi-
gative (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 op-
44<PAGE>
posed 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, set-
tlement, 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 Debenture Issuer 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 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 de-
fense 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 circum-
stances 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 (includ-
ing 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 Debenture Issuer only as authorized in
the specific case upon a determination that indemnification
45<PAGE>
of the Company Indemnified Person is proper in the circum-
stances because he has met the applicable standard of con-
duct set forth in paragraphs (i) and (ii). Such determina-
tion 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 Debenture Issuer 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 Debenture Issuer as authorized in this
Section 10.4(a). Notwithstanding the foregoing, no advance
shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by
a majority vote of a quorum of disinterested Regular Trust-
ees, (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 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 Indem-
nified 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 ad-
vancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the
Debenture Issuer or Preferred Security Holders of the Trust
46<PAGE>
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
Debenture Issuer 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 Debenture Issuer 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 Deben-
ture Issuer 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 (in-
cluding 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 constit-
uent 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 rati-
fied, 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 Debenture Issuer 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, part-
ners, 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
without negligence or bad faith on its part, arising out of or in
47<PAGE>
connection with the acceptance or administration or 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 inter-
est 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 Securi-
ties 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 competi-
tive 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 pres-
ent 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
48<PAGE>
in reasonable detail, each transaction of the Trust. The books
of account shall be maintained on the accrual method of account-
ing, 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 se-
lected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared
and delivered to each of the Holders of Securities, within 90
days after the end of each Fiscal Year of the Trust, annual
financial statements of the Trust, including a balance sheet of
the Trust as of the end of such Fiscal Year, and the related
statements of income or loss;
(c) The Regular Trustees shall cause to be duly pre-
pared 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.
(d) The Regular Trustees shall cause to be duly pre-
pared 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, howev-
er, 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.
49<PAGE>
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.
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 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 pur-
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Institutional Trustee shall have first received an Offi-
50<PAGE>
cers' 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 Secu-
rities);
(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 first received:
(A) 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 (in-
cluding the terms of the Securities); and
(B) 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 Decla-
ration (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
(C) cause the Trust to be deemed to be an In-
vestment 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 ad-
versely 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 9.1(c) and this Section 12.1 shall not
be amended without the consent of all of the Holders of the Secu-
rities;
(e) Article IV shall not be amended without the con-
sent of the Holders of a Majority in liquidation amount of the
Common Securities and;
51<PAGE>
(f) the rights of the holders of the Common Securi-
ties under Article V to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without the con-
sent of the Holders of a Majority in liquidation amount of the
Common Securities; and
(g) notwithstanding Section 12.1(c), this Declara-
tion 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 obliga-
tions 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 Hold-
ers; and
(v) to modify, eliminate and add to any provision of
the Amended Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Secu-
rities 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 enti-
tled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Pre-
ferred Securities are listed or admitted for trading. The Regul-
ar 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 such class of Securities. Such direction shall be giv-
en 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 Certifi-
cates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be
52<PAGE>
counted for purposes of determining whether the required percent-
age 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 ac-
tion 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 other-
wise 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;
53<PAGE>
(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 estab-
lish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose
of any meeting at which any 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 Institutional Trustee is a national banking
association with trust powers, duly organized, validly
existing and in good standing under the laws of the United
States, with trust power and authority to execute and deliv-
er, and to carry out and perform its obligations under the
terms of, the Declaration;
(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, reorgani-
zation, moratorium, insolvency, and other similar laws
54<PAGE>
affecting creditors' rights generally and to general prin-
ciples 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 per-
formance by the Institutional Trustee, of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trus-
tee.
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 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 Delaware Trustee is a Delaware banking cor-
poration with trust powers, duly organized, validly existing
and in good standing under the laws of the State of Dela-
ware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms
of, the Declaration.
(b) The Delaware Trustee has been authorized to per-
form 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 Trust-
ee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, morato-
rium, insolvency, and other similar laws affecting credit-
ors' 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 perfor-
mance by the Delaware Trustee, of the Declaration.
55<PAGE>
(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 certi-
fied 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):
NORAM FINANCING [I] [II]
c/o NorAm Energy Corp.
1600 Smith Street
32nd Floor
Houston, Texas 77002
Attention:__________
(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 Securi-
ties):
[Name of Delaware Trustee]
[address]
(c) if given to the Institutional Trustee, at its
Corporate Trust Office to the attention of ______________
(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):
56<PAGE>
NorAm Energy Corp.
1600 Smith Street
32nd Floor
Houston, Texas 77002
Attention:__________
(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 deliv-
ered 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 hereun-
der 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 interpreta-
tion of this Declaration or any provision hereof.
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.
57<PAGE>
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the appli-
cation of such provision to any Person or circumstance, shall be
held invalid, the remainder of this Declaration, or the applica-
tion 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.
58<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
_______________________________
____________, as Regular Trustee
_______________________________
____________, as Regular Trustee
_____________________
as Delaware Trustee
By:____________________________
Name:
Title:
__________________________, as In-
stitutional Trustee
By:____________________________
Name:
Title:
NorAm Energy Corp., as Sponsor
By:___________________________
Name:
Title:
59<PAGE>
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of _______, 1995 (as amended from
time to time, the "Declaration"), the designation, rights, privi-
leges, 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. [ ] Pre-
ferred Securities of the Trust with an aggregate liquidation
amount with respect to the assets of the Trust of [ ]
dollars ($[ ]) and a liquidation amount with respect
to the assets of the Trust of $25 per preferred security, are
hereby designated for the purposes of identification only as
_____% Trust Preferred Securities (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form of Exhibit A-1 to
the Declaration, with such changes and additions thereto or dele-
tions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. [ ] Common
Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of [ ] dollars
($[ ]) 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 ______%
Trust 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.
60<PAGE>
2. Distributions.
(a) Distributions payable on each Security will be
fixed at a rate per annum of ______% (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 distribu-
tions 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.
(b) Distributions on the Securities will be cumula-
tive, will accrue from ________, 1995, and will be payable quar-
terly in arrears, on [March 31, June 30, September 30, and Decem-
ber 31] of each year, commencing on __________, 1995, 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 "Ex-
tension 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 de-
ferred. Despite such deferral, quarterly Distributions will con-
tinue 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 Distribu-
tions 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.
61<PAGE>
(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 pay-
ment in respect of the Preferred Securities will be made as de-
scribed under the heading "Description of the Preferred Securi-
ties -- Book-Entry Only Issuance -- The Depository Trust Company"
in the Prospectus Supplement dated______, 1995, to the Prospectus
dated ______, 1995 (together, the "Prospectus"), of the Trust
included in the Registration Statement on Form S-3 of the Spon-
sor, the Trust, certain other business trusts and a certain
partnership. 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 select-
ed 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 pay-
ment 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 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 Busi-
ness 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 succeed-
ing 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.
62<PAGE>
In the event of any voluntary or involuntary disso-
lution, 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 Distribu-
tion"), 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 Distri-
bution can be paid only in part because the Trust has insuffi-
cient 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.
(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,
63<PAGE>
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' inter-
ests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); pro-
vided, however, that, as a condition of such dissolution and dis-
tribution, 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 Special Event by taking some ministerial ac-
tion, 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 Trust-
ees, 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) in the event of any Special Event,
after receipt of a Tax Event Opinion or Investment Company Event
Opinion (as defined hereinafter), as the case may be, the Regular
Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, the Deben-
ture 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 Special 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; provid-
ed, however, that, if at the time there is available to the Trust
the opportunity to eliminate, within such 90 day period, the
64<PAGE>
Special 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 Supple-
ment, as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regula-
tions thereunder) of the United States or any political subdi-
vision or taxing authority therefor or therein, or (b) any amend-
ment to, or change in, an interpretation or application of any
such laws or regulations by any legislative body, court, govern-
mental agency or regulatory authority, which amendment or change
is enacted, promulgated, issued or announced or which interpreta-
tion 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 ac-
crued 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 recog-
nized independent counsel experienced in practice under the In-
vestment Company Act (an "Investment Company Event Opinion")
that, as a result of the occurrence of a change in law or regula-
tion 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 con-
sidered 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 Supple-
ment.
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
65<PAGE>
global certificate or certificates representing the Debentures to
be delivered upon such distribution and any certificates repre-
senting Securities, except for certificates representing Pre-
ferred 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 aggre-
gate 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 out-
standing 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.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distri-
bution of Debentures in exchange for the Securities (a "Re-
demption/Distribution Notice") will be given by the Trust by
mail to each Holder of Securities to be redeemed or exchang-
ed 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/ Dis-
tribution 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 Redemp-
tion/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.
66<PAGE>
(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 Pre-
ferred 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 distri-
bution 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 Depos-
itory 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 suffi-
cient amount of cash in connection with the related redemp-
tion or maturity of the Debentures, the Institutional Trust-
ee will pay the relevant Redemption Price to the Holders of
such Securities by check mailed to the address of the rele-
vant 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 Secu-
rities 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
67<PAGE>
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 pay-
ment, in which case the actual payment date will be consid-
ered the date fixed for redemption for purposes of calcu-
lating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to (A) in re-
spect of the Preferred Securities, the Depository or its
nominee (or any successor Clearing Agency or its nominee) if
the 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 (in-
cluding, without limitation, United States federal securi-
ties 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 Deben-
ture Trustee, or exercising any trust or power conferred on the
68<PAGE>
Debenture Trustee with respect to the Debentures, (ii) waive any
past default and its consequences that is waivable under Section
___ 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 con-
sent 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 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 Instit-
utional 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 direc-
tions of the Holders of the Preferred Securities under this para-
graph 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 the Institutional
Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trust-
ee's rights under the Declaration without first instituting a
legal proceeding against the Institutional Trustee or any other
Person.
Any approval or direction of Holders of Preferred Secu-
rities 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 con-
sent. 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 Pre-
ferred 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
69<PAGE>
Preferred Securities or to distribute the Debentures in accor-
dance 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 enti-
tled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7
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 Securi-
ties has been cured, waived, or otherwise eliminated and subject
to the requirements of the second to last sentence of this para-
graph, 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 Deben-
ture 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
____ 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 Institu-
tional 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,
70<PAGE>
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 Secu-
rities 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 the Institutional Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to
enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institu-
tional Trustee or any other Person.
Any approval or direction of Holders of Common Securi-
ties 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 con-
sent. 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 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 Securi-
ties 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 disso-
lution, 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
71<PAGE>
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 termina-
tion 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, modi-
fication or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; pro-
vided, 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 Majori-
ty"), the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquida-
tion 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 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 satisfac-
tion of all amounts owed to the Holders of the Preferred Securi-
72<PAGE>
ties, 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 Institu-
tional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquida-
tion, 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 Securi-
ties, by the acceptance thereof, agrees to the provisions of the
Preferred Securities Guarantee and the Common Securities Guaran-
tee, 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.
73<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFI-
CATE 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. [ ]
Certificate Evidencing Preferred Securities
of
NORAM FINANCING [I] [II]
____% Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
NORAM FINANCING [I] [II], a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that ______________ (the "Holder") is the regis-
A1-1<PAGE>
tered owner of preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust desig-
nated the _____% Trust Preferred Securities (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 re-
spects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of _______, 1995, as
the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Preferred Securi-
ties 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 indebted-
ness and the Preferred Securities as evidence of indirect benefi-
cial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certif-
icate this ___ day of _____________, 199__.
[Name of Institutional Trustee],
as Trustee
By:_______________________________
Name:
Title:
___________________________________
[Name of Regular Trustee]
A1-2<PAGE>
___________________________________
[Name of Regular Trustee]
A1-3<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each
Preferred Security will be fixed at a rate per annum of ______%
(the "Coupon Rate") of the stated liquidation amount of $__ per
Preferred Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Dis-
tributions in arrears for more than one quarter will bear inter-
est 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 inter-
est 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 cumula-
tive, 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 ______ __, 1995,] to
[Holders of record fifteen (15) days prior to such payment dates,
which payment dates shall correspond to the interest payment
dates on the Debentures.] 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 "Ex-
tension Period") and, as a consequence of such deferral, Distri-
butions 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. Pay-
ments 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.
A1-4<PAGE>
The Preferred Securities shall
be redeemable as provided in the Declaration.
A1-5<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 Pre-
ferred Security Certificate)
A1-6<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NORAM FINANCING [I] [II]
______% Trust Common Securities
(liquidation amount $25 per Common Security)
NORAM FINANCING [I] [II], 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 desig-
nated the ______% Trust 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 trans-
fer. The designation, rights, privileges, restrictions, prefer-
ences 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 _______, 1995, 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 Guaran-
tee 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 indebted-
A2-1<PAGE>
ness and the Common Securities as evidence of indirect beneficial
ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of , 199 .
[Name of Institutional Trustee],
as Trustee
By:_______________________________
Name:
Title:
___________________________________
[Name of Regular Trustee]
___________________________________
[Name of Regular Trustee]
A2-2<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each
Common Security will be fixed at a rate per annum of ______% (the
"Coupon Rate") of the stated liquidation amount of $__ per Common
Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distribu-
tions 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 Institu-
tional Trustee has funds available therefor. The amount of Dis-
tributions 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 comput-
ed, 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 ______ __, 1995,] to
[Holders of record fifteen (15) days prior to such payment dates,
which payment dates shall correspond to the interest payment
dates on the Debentures.] 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 "Ex-
tension Period") and, as a consequence of such deferral, Distri-
butions 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. Pay-
ments 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.
A2-3<PAGE>
The Common Securities shall be
redeemable as provided in the Declaration.
A2-4<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)
A2-5<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
B-1<PAGE>
[FORM OF INDENTURE]
NORAM ENERGY CORP.
AND
___________________,
Trustee
______________________________________
INDENTURE
Dated as of ________, 1995
_______________________________________
Subordinated Debt Securities<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
310(a) . . . . . . . . . . . . . . . . . . . 7.9
310(b) . . . . . . . . . . . . . . . . . . . 7.8
7.10
310(c) . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . 7.13(a)
311(b) . . . . . . . . . . . . . . . . . . . 7.13(b)
311(c) . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . 5.1
5.2(a)
312(b) . . . . . . . . . . . . . . . . . . . 5.2(b)
312(c) . . . . . . . . . . . . . . . . . . . 5.2(c)
313(a) . . . . . . . . . . . . . . . . . . . 5.4(a)
313(b) . . . . . . . . . . . . . . . . . . . 5.4(b)
313(c) . . . . . . . . . . . . . . . . . . . 5.4(a)
5.4(b)
313(d) . . . . . . . . . . . . . . . . . . . 5.4(c)
314(a) . . . . . . . . . . . . . . . . . . . 5.3
314(b) . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . 13.6
314(d) . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . 13.6
314(f) . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . 7.1(a)
7.2
315(b) . . . . . . . . . . . . . . . . . . . 6.7
315(c) . . . . . . . . . . . . . . . . . . . 7.1
315(d) . . . . . . . . . . . . . . . . . . . 7.1(b)
315(e) . . . . . . . . . . . . . . . . . . . 7.1(c)
6.7
316(a) . . . . . . . . . . . . . . . . . . . 6.6
8.4
316(b) . . . . . . . . . . . . . . . . . . . 6.4
316(c) . . . . . . . . . . . . . . . . . . . 8.1
317(a) . . . . . . . . . . . . . . . . . . . 6.2
317(b) . . . . . . . . . . . . . . . . . . . 4.3
318(a) . . . . . . . . . . . . . . . . . . . 13.8
* This Cross-Reference Table does not constitute part
of the Indenture and shall not have any bearing on
the interpretation of any of its terms or provi-
sions.<PAGE>
TABLE OF CONTENTS*
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions of Terms . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . 2
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . 2
Certificate . . . . . . . . . . . . . . . . . . . . . . 2
Common Securities . . . . . . . . . . . . . . . . . . . 2
Common Securities Guarantee . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . 3
Custodian . . . . . . . . . . . . . . . . . . . . . . . 3
Declaration . . . . . . . . . . . . . . . . . . . . . . 3
Debt Securities . . . . . . . . . . . . . . . . . . . . 3
Default . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . 4
Governmental Obligations . . . . . . . . . . . . . . . . 4
herein . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . 4
Institutional Trustee . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . 5
NorAm Common Stock . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Securities . . . . . . . . . . . . . . . . . . 6
Preferred Securities Guarantee . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . 7
Securityholder . . . . . . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . . . 7
* This Table of Contents does not constitute part of
the Indenture and shall not have any bearing upon
the interpretation of any of its terms or provi-
sions.
i<PAGE>
Page
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . 8
Trust Securities . . . . . . . . . . . . . . . . . . . . 8
Voting Stock . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.1. Designation and Terms of Securities . . . 9
SECTION 2.2. Form of Securities and Trustee's Certif-
icate . . . . . . . . . . . . . . . . . . 11
SECTION 2.3. Denominations: Provisions for Payment . . 11
SECTION 2.4. Execution and Authentications. . . . . . 13
SECTION 2.5. Registration of Transfer and Exchange . . 14
SECTION 2.6. Temporary Securities . . . . . . . . . . 16
SECTION 2.7. Mutilated, Destroyed, Lost or Stolen
Securities . . . . . . . . . . . . . . . 16
SECTION 2.8. Cancellation . . . . . . . . . . . . . . 17
SECTION 2.9. Benefit of Indenture. . . . . . . . . . . 18
SECTION 2.10. Authenticating Agent . . . . . . . . . . 18
SECTION 2.11. Global Securities . . . . . . . . . . . . 19
ARTICLE III.
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.1. Redemption . . . . . . . . . . . . . . . 20
SECTION 3.2. Notice of Redemption . . . . . . . . . . 21
SECTION 3.3. Payment Upon Redemption . . . . . . . . . 22
SECTION 3.4. Sinking Fund . . . . . . . . . . . . . . 23
SECTION 3.5. Satisfaction of Sinking Fund Payments
with Debt Securities . . . . . . . . . . 23
SECTION 3.6. Redemption of Debt Securities for Sink-
ing Fund . . . . . . . . . . . . . . . . 24
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
ii<PAGE>
Page
SECTION 4.1. Payment of Principal, Premium and Inter-
est . . . . . . . . . . . . . . . . . . . 24
SECTION 4.2. Maintenance or Agency . . . . . . . . . . 24
SECTION 4.3. Paying Agents . . . . . . . . . . . . . . 25
SECTION 4.4. Appointment to Fill Vacancy in Office of
Trustee . . . . . . . . . . . . . . . . . 26
SECTION 4.5. Compliance with Consolidation Provis-
ions . . . . . . . . . . . . . . . . . . 26
SECTION 4.6. Limitation on Dividends; Transactions
with Affiliates . . . . . . . . . . . . . 27
SECTION 4.7. Covenants as to NorAm Trusts . . . . . . 27
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.1. Company to Furnish Trustee Names and
Addresses of Securityholders . . . . 28
SECTION 5.2. Preservation Of Informat Communications
With Securityholders . . . . . . . . . . 28
SECTION 5.3. Reports by the Company . . . . . . . . . 29
SECTION 5.4. Reports by the Trustee . . . . . . . . . 29
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.1. Events of Default . . . . . . . . . . . . 30
SECTION 6.2. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . 33
SECTION 6.3. Application of Moneys Collected . . . . . 35
SECTION 6.4. Limitation on Suits . . . . . . . . . . . 35
SECTION 6.5. Rights and Remedies Cumulative; Delay or
Omission Not Waiver . . . . . . . . . . . 36
SECTION 6.6. Control by Securityholders . . . . . . . 37
SECTION 6.7. Undertaking to Pay Costs . . . . . . . . 38
ARTICLE VII.
CONCERNING THE TRUSTEE
iii<PAGE>
Page
SECTION 7.1. Certain Duties and Responsibilities of
Trustee . . . . . . . . . . . . . . . . . 38
SECTION 7.2. Certain Rights of Trustee . . . . . . . . 40
SECTION 7.3. Trustee Not Responsible for Recitals or
Issuance or Securities . . . . . . . . . 42
SECTION 7.4. May Hold Securities . . . . . . . . . . . 42
SECTION 7.5. Moneys Held in Trust . . . . . . . . . . 42
SECTION 7.6. Compensation and Reimbursement . . . . . 42
SECTION 7.7. Reliance on Officers' Certificate . . . . 43
SECTION 7.8. Disqualification: Conflicting Interests . 43
SECTION 7.9. Corporate Trustee Required; Eligibility . 44
SECTION 7.10. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . 44
SECTION 7.11. Acceptance of Appointment By Successor . 46
SECTION 7.12. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . 48
SECTION 7.13. Preferential Collection of Claims
Against the Company . . . . . . . . . . . 48
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.1. Evidence of Action by Securityholders . . 48
SECTION 8.2. Proof of Execution by Securityholders . . 49
SECTION 8.3. Who May be Deemed Owners . . . . . . . . 50
SECTION 8.4. Certain Securities Owned by Company
Disregarded . . . . . . . . . . . . . . . 50
SECTION 8.5. Actions Binding on Future
Securityholders . . . . . . . . . . 51
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without the
Consent of Securityholders . . . . . 51
SECTION 9.2. Supplemental Indentures With Consent of
Securityholders . . . . . . . . . . . . . 52
SECTION 9.3. Effect of Supplemental Indentures . . . . 53
SECTION 9.4. Securities Affected by Supplemental In-
dentures . . . . . . . . . . . . . . . . 54
SECTION 9.5. Execution of Supplemental Indentures . . 54
iv<PAGE>
Page
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.1. Company May Consolidate, Etc. . . . . . . 55
SECTION 10.2. Successor Corporation Substituted . . . . 55
SECTION 10.3. Evidence of Consolidation, Etc. to Trus-
tee . . . . . . . . . . . . . . . . . . . 56
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.1. Satisfaction and Discharge of Indenture . 56
SECTION 11.2. Discharge of Obligations . . . . . . . . 57
SECTION 11.3. Deposited Moneys to be Held in Trust . . 58
SECTION 11.4. Payment of Moneys Held by Paying Agents . 58
SECTION 11.5. Repayment to Company . . . . . . . . . . 58
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.1. No Recourse . . . . . . . . . . . . . . . 59
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.1. Effect on Successors and Assigns . . . . 59
SECTION 13.2. Actions by Successor . . . . . . . . . . 60
SECTION 13.3. Surrender of Company Powers . . . . . . . 60
SECTION 13.4. Notices . . . . . . . . . . . . . . . . . 60
SECTION 13.5. Governing Law . . . . . . . . . . . . . . 60
SECTION 13.6. Treatment of Debt Securities as Debt . . 60
SECTION 13.7. Compliance Certificates and Opinions . . 61
SECTION 13.8. Payments on Business Days . . . . . . . . 61
SECTION 13.9. Conflict with Trust Indenture Act . . . . 61
SECTION 13.10. Counterparts . . . . . . . . . . . . . . 62
SECTION 13.11. Separability . . . . . . . . . . . . . . 62
v<PAGE>
Page
SECTION 13.12. Assignment . . . . . . . . . . . . . . . 62
SECTION 13.13. Acknowledgement of Rights . . . . . . . 62
ARTICLE XIV.
SUBORDINATION OF SECURITIES
SECTION 14.1. Agreement to Subordinate . . . . . . . . 63
SECTION 14.2. Default on Senior Indebtedness . . . . . 63
SECTION 14.3. Liquidation; Dissolution; Bankruptcy . . 64
SECTION 14.4. Subrogation . . . . . . . . . . . . . . . 65
SECTION 14.5. Trustee to Effectuate Subordination . . . 67
SECTION 14.6. Notice by the Company . . . . . . . . . . 67
SECTION 14.7. Rights of the Trustee; Holders of Senior
Indebtedness . . . . . . . . . . . . . . 68
SECTION 14.8. Subordination May Not Be Impaired . . . . 69
vi<PAGE>
INDENTURE, dated as of ____________________ , 1995, among
NorAm Energy Corp., a Delaware corporation (the "Company") and
________________, a national banking association, as trustee (the
"Trustee"):
WHEREAS, for its lawful corporate purposes, the Company
has duly authorized the execution and delivery of this Indenture
to provide for the issuance of unsecured subordinated debt secu-
rities (hereinafter referred to as the "Debt Securities"), in an
unlimited aggregate principal amount to be issued from time to
time in one or more series as in this Indenture provided, as
registered Debt Securities without coupons, to be authenticated
by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which
the Debt Securities are to be authenticated, issued and deliv-
ered, the Company has duly authorized the execution of this
Indenture; and
WHEREAS, all things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms,
have been done.
NOW, THEREFORE, in consideration of the premises and
the purchase of the Securities by the holders thereof, it is
mutually covenanted and agreed as follows for the equal and
ratable benefit of the holders of Securities:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions of Terms.
The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings
specified in this Section and shall include the plural as well as
the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, as amended, or that
are by reference in such Act defined in the Securities Act of
1933, as amended (except as herein otherwise expressly provided
<PAGE>
or unless the context otherwise requires), shall have the mean-
ings assigned to such terms in said Trust Indenture Act and in
said Securities Act as in force at the date of the execution of
this instrument.
"Affiliate" means, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or
holding with power to vote 10% or more of the outstanding voting
securities or other ownership interests of the specified Person,
(b) any Person 10% or more of whose outstanding voting securities
or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person,
(c) any Person directly or indirectly controlling, controlled by,
or under common control with the specified Person, (d) a partner-
ship in which the specified Person is a general partner, (e) any
officer or director of the specified Person, and (f) if the
specified Person is an individual, any entity of which the speci-
fied Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent
with respect to all or any of the series of Securities appointed
with respect to all or any series of the Securities by the
Trustee pursuant to Section 2.10.
"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 or any duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certi-
fied by the Secretary or an Assistant Secretary of the Company to
have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification.
"Business Day" means, with respect to any series of
Securities, any day other than a day on which Federal or State
banking institutions in the Borough of Manhattan, The City of New
York, are authorized or obligated by law, executive order or
regulation to close.
"Certificate" means a certificate signed by the princi-
pal executive officer, the principal financial officer or the
principal accounting officer of the Company. The Certificate
need not comply with the provisions of Section 13.6.
2<PAGE>
"Common Securities" means undivided beneficial inter-
ests in the assets of a NorAm Trust which rank pari passu with
Preferred Securities issued by such NorAm Trust; provided,
however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred
Securities.
"Common Securities Guarantee" means any guarantee that
the Company may enter into with The Bank of New York or other
Persons that operate directly or indirectly for the benefit of
holders of Common Securities of such NorAm Trust.
"Company" means NorAm Energy Corp., a corporation duly
organized and existing under the laws of the State of _________,
and, subject to the provisions of Article Ten, shall also include
its successors and assigns.
"Corporate Trust Office" means the office of the
Trustee at which, at any particular time, its corporate trust
business shall be principally administered, which office at the
date hereof is located at ______________________________________,
Attention: _____________________, except that whenever a provi-
sion herein refers to an office or agency of the Trustee in the
Borough of Manhattan, The City of New York, such office is
located, at the date hereof, at ________________________________.
"Custodian" means any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Declaration", with respect to a NorAm Trust, means the
Amended and Restated Declaration of Trust, dated _______________,
of such NorAm Trust.
"Debt Securities" means the Debt Securities authen-
ticated and delivered under this Indenture.
"Default" means any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of
Default.
"Depositary" means, with respect to Securities of any
series, for which the Company shall determine that such Securi-
ties will be issued as a Global Security, The Depository Trust
3<PAGE>
Company, New York, New York, another clearing agency, or any
successor registered as a clearing agency under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or
other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.1
or 2.11.
"Event of Default" means, with respect to Securities of
a particular series, any event specified in Section 6.1, con-
tinued for the period of time, if any, therein designated.
"Global Security" means, with respect to any series of
Securities, a Security executed by the Company and delivered by
the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be
registered in the name of the Depositary or its nominee.
"Governmental Obligations" means securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or
interest on any such Governmental Obligation held by such custo-
dian for the account of the holder of such depositary receipt;
provided, however, that (except as required by law) such custo-
dian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Governmental Obliga-
tion or the specific payment of principal of or interest on the
Governmental Obligation evidenced by such depositary receipt.
"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.
"Indenture" means this instrument as originally exe-
cuted or as it may from time to time be supplemented or amended
4<PAGE>
by one or more indentures supplemental hereto entered into in
accordance with the terms hereof.
"Institutional Trustee" has the meaning set forth in
the Declaration of the applicable NorAm Trust.
"Interest Payment Date", when used with respect to any
installment of interest on a Debt Security of a particular
series, means the date specified in such Debt Security or in a
Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment
of interest with respect to Debt Securities of that series is due
and payable.
"NorAm Common Stock" means the Common Stock, par value
$.____ per share, of the Company or any other class of stock
resulting from changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to
no par value, or from no par value to par value. Subject to the
anti-dilution provisions of any convertible Debt Security,
however, shares of NorAm Common Stock issuable on conversion of a
Security shall include only shares of the class designated as
Common Stock of the Company at the date of the supplemental
indenture, Board Resolution or other instrument authorizing such
Debt Security or shares of any class or classes resulting form
any reclassification or reclassifications thereof and which have
no preference in respect of the payment of dividends or the
distribution of assets upon any voluntary or involuntary liquida-
tion, dissolution or winding-up of the Company and which are not
subject to redemption by the Company, provided that if at any
time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially
in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total
number of shares of such classes resulting from all such reclas-
sifications.
"NorAm Trust" means each of NorAm Financing I and NorAm
Financing II, each, a Delaware business trust or any other
similar trust created for the purpose of issuing preferred
securities in connection with the issuance of Securities under
this Indenture.
"Officers' Certificate" means a certificate signed by
the President or a Vice President and by the Treasurer or an
5<PAGE>
Assistant Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary of the Company that is
delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for
in Section 13.6, if and to the extent required by the provisions
thereof.
"Opinion of Counsel" means an opinion in writing of
legal counsel, who may be an employee of or counsel for the
Company that is delivered to the Trustee in accordance with the
terms hereof. Each such opinion shall include the statements
provided for in Section 13.6, if and to the extent required by
the provisions thereof.
"Outstanding", when used with reference to Debt Securi-
ties of any series, means, subject to the provisions of Section
8.4, as of any particular time, all Debt Securities of that
series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Debt Securities theretofore
cancelled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previ-
ously been cancelled; (b) Debt Securities or portions thereof for
the payment or redemption of which moneys or Governmental Obliga-
tions in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Compa-
ny) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent);
provided, however, that if such Debt Securities or portions of
such Debt Securities are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee
shall have been made for giving such notice; and (c) Debt Securi-
ties in lieu of or in substitution for which other Debt Securi-
ties shall have been authenticated and delivered pursuant to the
terms of Section 2.7.
"Person" means any individual, corporation, partner-
ship, joint-venture, joint-stock company, unincorporated organiz-
ation or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same
debt and as that evidenced by such particular Security; and, for
the purposes of this definition, any Security authenticated and
6<PAGE>
delivered under Section 2.7 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Preferred Securities" means undivided beneficial
interests in the assets of a NorAm Trust which rank pari passu
with Common Securities issued by such NorAm Trust; provided,
however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred
Securities.
"Preferred Securities Guarantee" means any guarantee
that the Company may enter into with The Bank of New York or
other Persons that operate directly or indirectly for the benefit
of holders of Preferred Securities of such NorAm Trust.
"Responsible Officer" when used with respect to the
Trustee means the Chairman of the Board of Directors, the Presi-
dent, any Vice President, the Secretary, the Treasurer, any trust
officer, any corporate trust officer or any other officer or
assistant officer of the Trustee customarily performing functions
similar to those performed by the Persons who at the time shall
be such officers, respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of and famil-
iarity with the particular subject.
"Securities" means any Debt Securities.
"Securityholder", "holder of Securities", "registered
holder", or other similar term, means the Person or Persons in
whose name or names a particular Security shall be registered on
the books of the Company kept for that purpose in accordance with
the terms of this Indenture.
"Senior Indebtedness" means, with respect to the
Company, (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of such obligor for money borrowed
and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by such obligor; (ii) all
capital lease obligations of such obligor; (iii) all obligations
of such obligor issued or assumed as the deferred purchase price
of property, all conditional sale obligations of such obligor and
all obligations of such obligor under any title retention agree-
7<PAGE>
ment (but excluding trade accounts payable arising in the ordi-
nary course of business); (iv) all obligations of such obligor
for the reimbursement on any letter of credit, banker's accep-
tance, security purchase facility or similar credit transaction;
(v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons for the payment of which such
obligor is responsible or liable as obligor, guarantor or other-
wise; 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 obligor (whether or not such obligation
is assumed by such obligor), except for (1) any such indebtedness
that is by its terms subordinated to or pari passu with the
Securities, and (2) any indebtedness between or among such obli-
gor and its Affiliates, including all other debt securities and
guarantees in respect of those debt securities, issued to (x) any
NorAm Trust or (y) any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Company which is
a financing vehicle of the Company (a "Financing Entity") in
connection with the issuance by such Financing Entity of pre-
ferred securities.
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock
shall at the time be owned, 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, (ii) any general partner-
ship, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the
time be owned by such Person, or by one or more of its Subsidiar-
ies, or by such Person and one or more of its Subsidiaries and
(iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner.
"Trustee" means _________________________________, and,
subject to the provisions of Article Seven, shall also include
its successors and assigns, and, if at any time there is more
than one Person acting in such capacity hereunder, "Trustee"
shall mean each such Person. The term "Trustee" as used with
respect to a particular series of the Securities shall mean the
trustee with respect to that series.
"Trust Indenture Act", means the Trust Indenture,
subject to the provisions of Sections 9.1, 9.2, and 10.1, as in
effect at the date of execution of this instrument.
8<PAGE>
"Trust Securities" means Common Securities and Pre-
ferred Securities.
"Voting Stock", as applied to stock of any Person,
means shares, interests, participations or other equivalents in
the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the
directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power
only by reason of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.1. Designation and Terms of Securities.
(a) The aggregate principal amount of Debt Securities
that may be authenticated and delivered under this Indenture is
unlimited. The Debt Securities may be issued in one or more
series up to the aggregate principal amount of Debt Securities of
that series from time to time authorized by or pursuant to a
Board Resolution of the Company or pursuant to one or more
indentures supplemental hereto, prior to the initial issuance of
Debt Securities of any series, there shall be established in or
pursuant to a Board Resolution of the Company, and set forth in
an Officers, Certificate of the Company, or established in one or
more indentures supplemental hereto:
(1) the title of the Debt Security of the series
(which shall distinguish the Debt Securities of the series
from all other Debt Securities);
(2) any limit upon the aggregate principal amount of
the Debt Securities of that series that may be authenticated
and delivered under this Indenture (except for Debt Securi-
ties authenticated and delivered upon registration of trans-
fer of, or in exchange for, or in lieu of, other Debt Secu-
rities of that series);
(3) the date or dates on which the principal of the
Debt Securities of the series is payable;
9<PAGE>
(4) the rate or rates at which the Debt Securities of
the series shall bear interest or the manner of calculation
of such rate or rates, if any;
(5) the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest
will be payable or the manner of determination of such
Interest Payment Dates and the record date for the deter-
mination of holders to whom interest is payable on any such
Interest Payment Dates;
(6) the right, if any, to extend the interest payment
periods and the duration of such extension;
(7) the period or periods within which, the price or
prices at which and the terms and conditions upon which,
Debt Securities of the series may be redeemed, in whole or
in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem
or purchase Debt Securities of the series pursuant to any
sinking fund or analogous provisions (including payments
made in cash in participation of future sinking fund obliga-
tions) 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, Debt Securities of the
series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
(9) the form of the Debt Securities of the series
including the form of the Certificate of Authentication for
such series;
(10) if other than denominations of twenty-five U.S.
dollars ($25) or any integral multiple thereof, the denomi-
nations in which the Debt Securities of the series shall be
issuable;
(11) any and all other terms with respect to such
series (which terms shall not be inconsistent with the terms
of this Indenture) including any terms which may be required
by or advisable under United States laws or regulations or
advisable in connection with the marketing of Debt Securi-
ties of that series;
10<PAGE>
(12) whether the Debt Securities are issuable as a
Global Security and, in such case, the identity for the
Depositary for such series; and
(13) the terms and conditions, if any, upon which such
Debt Securities may be convertible into or exchangeable into
NorAm Common Stock or other securities of any kind, includ-
ing the initial conversion or exchange price or rate, the
conversion or exchange period, the circumstances under which
any such conversion or exchange right may expire, and any
other provision in addition to or in lieu of those set forth
in this Indenture.
All Debt Securities of any one series shall be substan-
tially identical except as to denomination and except as may
otherwise be provided in or pursuant to any such Board Resolution
or in any indentures supplemental hereto.
If any of the terms of the series are established by
action taken pursuant to a Board Resolution of the Company, a
copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the
Officers' Certificate of the Company setting forth the terms of
the series.
SECTION 2.2. Form of Securities and Trustee's Certif-
icate.
The Securities of any series and the Trustee's certi-
ficate of authentication to be borne by such Securities shall be
substantially of the tenor and purport as set forth in one or
more indentures supplemental hereto or as provided in a Board
Resolution of the Company and as set forth in an Officers'
Certificate of the Company, and may have such letters, numbers or
other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange on which
Securities of that series may be listed, or to conform to usage.
SECTION 2.3. Denominations: Provisions for Payment.
11<PAGE>
The Securities shall be issuable as registered Secur-
ities and in the denominations of twenty-five U.S. dollars ($25)
or any integral multiple thereof, subject to Section 2.1(10). The
Securities of a particular series shall bear interest payable on
the dates and at the rate specified with respect to that series.
The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption
thereof prior to maturity, shall be payable in the coin or
currency of the United States of America that at the time is
legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Security shall
be dated the date of its authentication. Interest on the Securi-
ties shall be computed on the basis of a 360-day year composed of
twelve 30-day months.
The interest installment on any Security that is pay-
able, and is punctually paid or duly provided for, on any Inter-
est Payment Date for Securities of that series shall be paid to
the Person in whose name said Security (or one or more Prede-
cessor Securities) is registered at the close of business on the
regular record date for such interest installment. In the event
that any Security of a particular series or portion thereof is
called for redemption and the redemption date is subsequent to a
regular record date with respect to any Interest Payment Date and
prior to such Interest Payment Date, interest on such Security
will be paid upon presentation and surrender of such Security as
provided in Section 3.3.
Any interest on any Security that is payable, but is
not punctually paid or duly provided for, on any Interest Payment
Date for Security of the same series (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered
holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by
the Company, at its election, as provided in clause (1) or clause
(2) below:
(1) The Company may make payment of any Defaulted
Interest on Securities to the Persons in whose names such
Securities (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
12<PAGE>
proposed to be paid on each such Security and the date of
the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such De-
faulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her
address as it appears in the Security Register (as hereinaf-
ter defined), not less than 10 days prior to such special
record date. Notice of the proposed payment of such De-
faulted Interest and the special record date therefor having
been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered on such
special record date and shall be no longer payable pursuant
to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest on any Securities in any other lawful manner not
inconsistent with the requirements of any securities ex-
change 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 Trustees of the proposed payment
pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution of the
Company or one or more indentures supplemental hereto establish-
ing the terms of any series of Securities pursuant to Section 2.1
hereof, the term "regular record date" as used in this Section
with respect to a series of Securities with respect to any Inter-
est Payment Date for such series shall mean either the fifteenth
day of the month immediately preceding the month in which an
13<PAGE>
Interest Payment Date established for such series pursuant to
Section 2.1 hereof shall occur, if such Interest Payment Date is
the first day of a month, or the last day of the month immediate-
ly preceding the month in which an Interest Payment Date estab-
lished for such series pursuant to Section 2.1 hereof shall
occur, if such Interest Payment Date is the fifteenth day of a
month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section,
each Security of a series delivered under this Indenture upon
transfer of or in exchange for or in lieu of any other Security
of such series shall carry the rights to interest accrued and
unpaid, and to accrue, that were carried by such other Security.
SECTION 2.4. Execution and Authentications.
The Debt Securities shall be signed on behalf of the
Company by its President or one of its Vice Presidents, under its
corporate seal attested by its Secretary or one of its Assistant
Secretaries. Signatures may be in the form of a manual or
facsimile signature. The Company may use the facsimile signature
of any Person who shall have been a President or Vice President
thereof, or of any Person who shall have been a Secretary or
Assistant Secretary thereof, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered or
disposed of such Person shall have ceased to be the President or
a Vice President, or the Secretary or an Assistant Secretary, of
the Company. The seal of the Company may be in the form of a
facsimile of such seal and may be impressed, affixed, imprinted
or otherwise reproduced on the Securities. The Securities may
contain such notations, legends or endorsements required by law,
stock exchange rule or usage. Each Security shall be dated the
date of its authentication by the Trustee.
A Security shall not be valid until authenticated
manually by an authorized signatory of the Trustee, or by an
Authenticating Agent. Such signature shall be conclusive evi-
dence that the Security so authenticated has been duly authenti-
cated and delivered hereunder and that the holder is entitled to
the benefits of this Indenture.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Secur-
ities of any series executed by the Company to the Trustee for
authentication, together with a written order of the Company for
14<PAGE>
the authentication and delivery of such Securities, signed by its
President or any Vice President and its Treasurer or any Assis-
tant Treasurer, and the Trustee in accordance with such written
order shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms
thereof have been established in conformity with the provisions
of this Indenture.
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 immuni-
ties under the Securities and this Indenture or otherwise in a
manner that is not reasonably acceptable to the Trustee.
SECTION 2.5. Registration of Transfer and Exchange.
(a) Securities of any series may be exchanged upon
presentation thereof at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, the City
and State of New York, for other Securities of such series of
authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, all as provided in
this Section. In respect of any Securities so surrendered for
exchange, the Company shall execute, the Trustee shall authenti-
cate and such office or agency shall deliver in exchange therefor
the Security or Securities of the same series that the Security-
holder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at
its office or agency designated for such purpose in the Borough
of Manhattan, the City and State of New York, or such other
location designated by the Company a register or registers
(herein referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company
shall register the Securities and the transfers of Securities as
in this Article provided and which at all reasonable times shall
be open for inspection by the Trustee. The registrar for the
purpose of registering Securities and transfer of Securities as
15<PAGE>
herein provided shall be appointed as authorized by Board Resolu-
tion (the "Security Registrar").
Upon surrender for transfer of any Security at the
office or agency of the Company designated for such purpose, the
Company shall execute, the Trustee shall authenticate and such
office or agency shall deliver in the name of the transferee or
transferees a new Security or Securities of the same series as
the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be
accompanied (if so required by the Company or the Security
Registrar) by a written instrument or instruments of transfer, in
form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by such holder's duly autho-
rized attorney in writing.
(c) No service charge shall be made for any exchange
or registration of transfer of Securities, or issue of new
Securities in case of partial redemption of any series, but the
Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than
exchanges pursuant to Section 2.6, the second paragraph of
Section 3.3 and Section 9.4 not involving any transfer.
(d) The Company shall not be required (i) to issue,
exchange or register the transfer of any Securities during a
period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of less than all the
Outstanding Securities of the same series and ending at the close
of business on the day of such mailing, nor (ii) to register the
transfer of or exchange any Securities of any series or portions
thereof called for redemption. The provisions of this Section
2.5 are, with respect to any Global Security, subject to Section
2.11 hereof.
SECTION 2.6. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and the Trustee shall authenti-
cate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination. Such temporary
Securities shall be substantially in the form of the definitive
Securities in lieu of which they are issued, but with such
16<PAGE>
omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company.
Every temporary Security of any series shall be executed by the
Company and be authenticated by the Trustee upon the same condi-
tions and in substantially the same manner, and with like effect,
as the definitive Securities of such series. Without unnecessary
delay the Company will execute and will furnish definitive
Securities of such series and thereupon any or all temporary
Securities of such series may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the
Company designated for the purpose in the Borough of Manhattan,
the City and State of New York, and the Trustee shall authenti-
cate and such office or agency shall deliver in exchange for such
temporary Securities an equal aggregate principal amount of
definitive Securities of such series, unless the Company advises
the Trustee to the effect that definitive Securities need not be
executed and furnished until further notice from the Company.
Until so exchanged, the temporary Securities of such series shall
be entitled to the same benefits under this Indenture as defini-
tive Securities of such series authenticated and delivered
hereunder.
SECTION 2.7. Mutilated, Destroyed, Lost or Stolen
Securities.
In case any temporary or definitive Security shall
become mutilated or be destroyed, lost or stolen, the Company
(subject to the next succeeding sentence) shall execute, and upon
the Company's request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Security of the same series,
bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substituted Security shall furnish
to the Company and the Trustee such security or indemnity as may
be required by them to save each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also
furnish to the Company and the Trustee evidence to their satis-
faction of the destruction, loss or theft of the applicant's
Security and of the ownership thereof. The Trustee may authenti-
cate any such substituted Security and deliver the same upon the
written request or authorization of any officer of the Company.
Upon the issuance of any substituted Security, 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
17<PAGE>
any other expenses (including the fees and expenses of the
Trustee) connected therewith. In case any Security that has
matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a
substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may
require to save them harmless, and, in case of destruction, loss
or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Security and of
the ownership thereof.
Every replacement Security issued pursuant to the
provisions of this Section shall constitute an additional con-
tractual obligation of the Company whether or not the mutilated,
destroyed, lost or stolen Security shall be found at any time, or
be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any
and all other Securities of the same series duly issued hereun-
der. All Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent
lawful) any and all other rights or remedies, notwithstanding any
law or statute existing or hereafter enacted to the contrary with
respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.8. Cancellation.
All Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to
the Trustee for cancellation, or, if surrendered to the Trustee,
shall be cancelled by it, and no Securities shall be issued in
lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company at
the time of such surrender, the Trustee shall deliver to the
Company cancelled Securities held by the Trustee. In the absence
of such request the Trustee may dispose of cancelled Securities
in accordance with its standard procedures and deliver a certifi-
cate of disposition to the Company. If the Company shall other-
wise acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebt-
18<PAGE>
edness represented by such Securities unless and until the same
are delivered to the Trustee for cancellation.
SECTION 2.9. Benefit of Indenture.
Nothing in this Indenture or in the Securities, express
or implied, shall give or be construed to give to any Person,
other than the parties hereto and the holders of the Securities
(and, with respect to the provisions of Article Fourteen, the
holders of Senior Indebtedness) any legal or equitable right,
remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit
of the parties hereto and of the holders of the Securities (and,
with respect to the provisions of Article Fourteen, the holders
of Senior Indebtedness).
SECTION 2.10. Authenticating Agent.
So long as any of the Securities of any series remain
Outstanding there may be an Authenticating Agent for any or all
such series of Securities which the Trustee shall have the right
to appoint. Said Authenticating Agent shall be authorized to act
on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, transfer or partial redemption
thereof, 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. All
references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series. Each Authenticating Agent
shall be acceptable to the Company and shall be a corporation
that has a combined capital and surplus, as most recently report-
ed or determined by it, sufficient under the laws of any juris-
diction under which it is organized or in which it is doing
business to conduct a trust business, and that is otherwise
authorized under such laws to conduct such business and is
subject to supervision or examination by Federal or State author-
ities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign
immediately.
Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the
Company. The Trustee may at any time (and upon request by the
19<PAGE>
Company shall) terminate the agency of any Authenticating Agent
by giving written notice of termination to such Authenticating
Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee
may appoint an eligible successor Authenticating Agent acceptable
to the Company. Any successor Authenticating Agent, upon accep-
tance of its appointment hereunder, shall become vested with all
the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. Global Securities.
(a) If the Company shall establish pursuant to Section
2.1 that the Securities of a particular series are to be issued
as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.4, authenticate and
deliver, a Global Security that (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount
of, all of the Outstanding Securities of such series, (ii) shall
be registered in the name of the Depositary or its nominee, (iii)
shall be delivered by the Trustee to the Depositary or pursuant
to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Security may be
transferred, in whole but not in part, only to another nominee of
the Depositary or to a successor Depositary or to a nominee of
such successor Depositary."
(b) Notwithstanding the provisions of Section 2.5, the
Global Security of a series may be transferred, in whole but not
in part and in the manner provided in Section 2.5, only to
another nominee of the Depositary for such series, or to a
successor Depositary for such series selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the
Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such series or if at any time the
Depositary for such series shall no longer be registered or in
good standing under the Exchange Act, or other applicable statute
or regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company re-
ceives such notice or becomes aware of such condition, as the
case may be, this Section 2.11 shall no longer be applicable to
the Securities of such series and the Company will execute, and
20<PAGE>
subject to Section 2.5, the Trustee will authenticate and deliver
the Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security. In
addition, the Company may at any time determine that the Securi-
ties of any series shall no longer be represented by a Global
Security and that the provisions of this Section 2.11 shall no
longer apply to the Securities of such series. In such event the
Company will execute and subject to Section 2.5, the Trustee,
upon receipt of an Officers, Certificate evidencing such determi-
nation by the Company, will authenticate and deliver the Securi-
ties of such series in definitive registered form without cou-
pons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security of
such series in exchange for such Global Security. Upon the
exchange of the Global Security for such Securities in definitive
registered form without coupons, in authorized denominations, the
Global Security shall be cancelled by the Trustee. Such Securi-
ties in definitive registered form issued in exchange for the
Global Security pursuant to this Section 2.11(c) shall be regis-
tered 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.
ARTICLE III.
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.1. Redemption.
The Company may redeem the Debt Securities of any
series issued hereunder on and after the dates and in accordance
with the terms established for such series pursuant to Section
2.1 hereof.
SECTION 3.2. Notice of Redemption.
(a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Debt
Securities of any series in accordance with the right reserved so
21<PAGE>
to do, the Company shall, or shall cause the Trustee to, give
notice of such redemption to holders of the Debt Securities of
such series to be redeemed by mailing, first class postage pre-
paid, a notice of such redemption not less than 30 days and not
more than 90 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall
appear upon the Security Register unless a shorter period is
specified in the Debt Securities to be redeemed. Any notice that
is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the registered
holder receives the notice. In any case, failure duly to give
such notice to the holder of any Security of any series designat-
ed for redemption in whole or in part, or any defect in the
notice, shall not affect the validity of the proceedings for the
redemption of any other Debt Securities of such series or any
other series. In the case of any redemption of Debt Securities
prior to the expiration of any restriction on such redemption
provided in the terms of such Debt Securities or elsewhere in
this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with any such re-
striction.
Each such notice of redemption shall specify the date
fixed for redemption and the redemption price at which Debt
Securities of that series are to be redeemed, and shall state
that payment of the redemption price of such Debt Securities to
be redeemed will be made at the office or agency of the Company
in the Borough of Manhattan, the City and State of New York, upon
presentation and surrender of such Debt Securities, that interest
accrued to the date fixed for redemption will be paid as speci-
fied in said notice, that from and after said date interest will
cease to accrue and that the redemption is for a sinking fund, if
such is the case. If less than all the Debt Securities of a
series are to be redeemed, the notice to the holders of Debt
Securities of that series to be redeemed in whole or in part
shall specify the particular Debt Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice
that relates to such Security shall state the portion of the
principal amount thereof to be redeemed, and shall state that on
and after the redemption date, upon surrender of such Security, a
new Security or Debt Securities of such series in principal
amount equal to the unredeemed portion thereof.
(b) If less than all the Debt Securities of a series
are to be redeemed, the Company shall give the Trustee at least
22<PAGE>
45 days' notice in advance of the date fixed for redemption as to
the aggregate principal amount of Debt Securities of the series
to be redeemed, and thereupon the Trustee shall select, by lot or
in such other manner as it shall deem appropriate and fair in its
discretion and that may provide for the selection of a portion or
portions (equal to twenty-five U.S. dollars ($25) or any integral
multiple thereof) of the principal amount of such Debt Securities
of a denomination larger than $25, the Debt Securities to be
redeemed and shall thereafter promptly notify the Company in
writing of the numbers of the Debt Securities to be redeemed, in
whole or in part.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or
any Vice President, instruct the Trustee or any paying agent to
call all or any part of the Debt Securities of a particular
series for redemption and to give notice of redemption in the
manner set forth in this Section, such notice to be in the name
of the Company or its own name as the Trustee or such paying
agent may deem advisable. In any case in which notice of redemp-
tion is to be given by the Trustee or any such paying agent, the
Company shall deliver or cause to be delivered to, or permit to
remain with, the Trustee or such paying agent, as the case may
be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the
Trustee or such paying agent to give any notice by mail that may
be required under the provisions of this Section.
SECTION 3.3. Payment Upon Redemption.
(a) If the giving of notice of redemption shall have
been completed as above provided, the Debt Securities or portions
of Debt Securities of the series to be redeemed specified in such
notice shall become due and payable on the date and at the place
stated in such notice at the applicable redemption price, togeth-
er with interest accrued to the date fixed for redemption and
interest on such Debt Securities or portions of Debt Securities
shall cease to accrue on and after the date fixed for redemption,
unless the Company shall default in the payment of such redemp-
tion price and accrued interest with respect to any such Security
or portion thereof. On presentation and surrender of such Debt
Securities on or after the date fixed for redemption at the place
of payment specified in the notice, said Debt Securities shall be
paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed
23<PAGE>
for redemption (but if the date fixed for redemption is an
interest payment date, the interest installment payable on such
date shall be payable to the registered holder at the close of
business on the applicable record date pursuant to Section 2.3).
(b) Upon presentation of any Security of such series
that is to be redeemed in part only, the Company shall execute
and the Trustee shall authenticate and the office or agency where
the Security is presented shall deliver to the holder thereof, at
the expense of the Company, a new Security or Debt Securities of
the same series of authorized denominations in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 3.4. Sinking Fund.
The provisions of Sections 3.4, 3.5 and 3.6 shall be
applicable to any sinking fund for the retirement of Debt Securi-
ties of a series, except as otherwise specified as contemplated
by Section 2.1 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided
for by the terms of Debt 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 Debt Securities of any series is herein referred to as
an "optional sinking fund payment". If provided for by the terms
of Debt Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section
3.5. Each sinking fund payment shall be applied to the redemption
of Debt Securities of any series as provided for by the terms of
Debt Securities of such series.
SECTION 3.5. Satisfaction of Sinking Fund Payments
with Debt Securities.
The Company (i) may deliver outstanding Debt Securities
of a series (other than any Debt Securities previously called for
redemption) and (ii) may apply as a credit Debt Securities of a
series that have been redeemed either at the election of the
Company pursuant to the terms of such Debt Securities or through
the application of permitted optional sinking fund payments
pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with
respect to the Debt Securities of such series required to be made
pursuant to the terms of such Debt Securities as provided for by
24<PAGE>
the terms of such series, provided that such Debt Securities have
not been previously so credited. Such Debt Securities shall be
received and credited for such purpose by the Trustee at the
redemption price specified in such Debt Securities for redemption
through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
SECTION 3.6. Redemption of Debt Securities for Sink-
ing Fund.
Not less than 45 days prior to each sinking fund
payment date for any series of Debt Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series
pursuant to the terms of the series, the portion thereof, if any,
that is to be satisfied by delivering and crediting Debt Securi-
ties of that series pursuant to Section 3.5 and the basis for
such credit and will, together with such Officers' Certificate,
deliver to the Trustee any Debt Securities to be so delivered.
Not less than 30 days before each such sinking fund payment date
the Trustee shall select the Debt Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section
3.2 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided
in Section 3.2. Such notice having been duly given, the redemp-
tion of such Debt Securities shall be made upon the terms and in
the manner stated in Section 3.3.
ARTICLE IV.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.1. Payment of Principal, Premium and Inter-
est.
The Company will duly and punctually pay or cause to be
paid the principal of (and premium, if any) and interest on the
Debt Securities of that series at the time and place and in the
manner provided herein and established with respect to such Debt
Securities.
SECTION 4.2. Maintenance or Agency.
25<PAGE>
So long as any series of the Securities remain Out-
standing, the Company agrees to maintain an office or agency in
the Borough of Manhattan, the City and State of New York, with
respect to each such series and at such other location or loca-
tions as may be designated as provided in this Section 4.2, where
(i) Securities of that series may be presented for payment, (ii)
Securities of that series may be presented as hereinabove autho-
rized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be given or
served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by
its President or a Vice President and delivered to the trustee,
designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, notices and demands
may be made or served at the Corporate Trust Office of the Trus-
tee, and the Company hereby appoints the Trustee as its agent to
receive all such presentations, notices and demands.
SECTION 4.3. Paying Agents.
(a) If the Company shall appoint one or more paying
agents for all or any series of the Securities, other than the
Trustee, the Company will cause each such paying agent to execute
and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of (and premium, if
any) or interest on the Securities of that series (whether
such sums have been paid to it by the Company or by any
other obligor of such Securities) in trust for the benefit
of the Persons entitled thereto;
(2) that it will give the Trustee notice of any fail-
ure by the Company (or by any other obligor of such Securi-
ties) to make any payment of the principal of (and premium,
if any) or interest on the Securities of that series when
the same shall be due and payable;
(3) that it will, at any time during the continuance
of any failure referred to in the preceding paragraph (a)(2)
26<PAGE>
above, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying
agent; and
(4) that it will perform all other duties of paying
agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent
with respect to any series of the Securities, it will on or
before each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and
hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such
sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of such
action, or any failure (by it or any other obligor on such
Securities) to take such action. 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 the
paying agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such paying agent is the Trust-
ee) the Company will promptly notify the Trustee of this action
or failure so to act.
(c) Notwithstanding anything in this Section to the
contrary, (i) the agreement to hold sums in trust as provided in
this Section is subject to the provisions of Section 11.5, and
(ii) the Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other
purpose, pay, or direct any paying agent to pay, to the Trustee
all sums held in trust by the Company or such paying agent, such
sums to be held by the Trustee upon the same terms and conditions
as those upon which such sums were held by the Company or such
paying agent; and, upon such payment by any paying agent to the
Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.4. Appointment to Fill Vacancy in Office of
Trustee.
27<PAGE>
The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner
provided in Section 7.10, a Trustee, so that there shall at all
times be a Trustee hereunder.
SECTION 4.5. Compliance with Consolidation Provis-
ions.
The Company will not, while any of the Securities
remain Outstanding, consolidate with, or merge into, or merge
into itself, or sell or convey all or substantially all of its
property to any other company unless the provisions of Article
Ten hereof are complied with.
SECTION 4.6. Limitation on Dividends; Transactions
with Affiliates.
If Securities are issued to a NorAm Trust or a
trustee of such trust in connection with the issuance of Trust
Securities by such NorAm Trust and (i) there shall have occurred
any event that would constitute an Event of Default, (ii) NorAm
shall be in default with respect to its payment of any obliga-
tions under the Preferred Securities Guarantee or Common Securi-
ties Guarantee relating to such NorAm Trust or (iii) the Company
shall have given notice of its election to defer payments of
interest on such Securities by extending the interest payment
period as provided in the Indenture and such period, or any
extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, and (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 such Securities.
SECTION 4.7. Covenants as to NorAm Trusts.
In the event Securities are issued to a NorAm Trust or
a trustee of such trust in connection with the issuance of Trust
Securities by such NorAm Trust, for so long as such Trust Securi-
ties remain outstanding, the Company will (i) maintain 100%
direct or indirect ownership of the Common Securities of such
NorAm Trust; provided, however, that any permitted successor of
the Company under the Indenture may succeed to the Company's
28<PAGE>
ownership of the Common Securities, (ii) use its reasonable
efforts to cause such NorAm Trust (a) to remain a business trust,
except in connection with a distribution of Securities, the
redemption of all of the Trust Securities of such NorAm Trust or
certain mergers, consolidations or amalgamations, each as permit-
ted by the Declaration of such NorAm Trust, and (b) to otherwise
continue not to be treated as an association taxable as a corpo-
ration or partnership for United States federal income tax
purposes and (iii) to we its reasonable efforts to cause each
holder of Trust Securities to be treated as owning an individual
beneficial interest in the Securities.
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.1. Company to Furnish Trustee Names and
Addresses of Securityholders.
The Company will furnish or cause to be furnished to
the Trustee (a) on a monthly basis on each regular record date
(as defined in Section 2.3) a list, in such form as the Trustee
may reasonably require, of the names and addresses of the holders
of each series of Securities as of such regular record date,
provided that the Company shall not be obligated to furnish or
cause to furnish such list at any time that the list shall not
differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee
may request in writing within 30 days after the receipt by the
Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that, in either case, no such list
need be furnished for any series for which the Trustee shall be
the Security Registrar.
SECTION 5.2. Preservation Of Informat Communications
With Securityholders.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, all information as to the names and
addresses of the holders of Securities contained in the most
recent list furnished to it as provided in Section 5.1 and as to
the names and addresses of holders of Securities received by the
29<PAGE>
Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it
as provided in Section 5.1 upon receipt of a new list so fur-
nished.
(c) Securityholders may communicate as provided in
Section 312(b) of the Trust Indenture Act with other Security-
holders with respect to their rights under this Indenture or
under the Securities.
SECTION 5.3. Reports by the Company.
(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that 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 re-
quired to file information, documents or reports pursuant to
either of such sections, then to file with the Trustee and the
Commission, in accordance with the rules and regulations pre-
scribed from time to time by the Commission, such of the supple-
mentary and periodic information, documents and reports that may
be required pursuant to Section 13 of the Exchange Act, in
respect of a security listed and registered on a national securi-
ties exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the
Trustee and the Commission, in accordance with the rules and
regulations prescribed from to time by the Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to
time by such rules and regulations.
(c) The Company covenants and agrees to transmit by
mail, first class postage prepaid, or reputable over-night
delivery service that provides for evidence of receipt, to the
Securityholders, as their names and addresses appear upon the
Security Register, within 30 days after the filing thereof with
30<PAGE>
the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to subsec-
tions (a) and (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
SECTION 5.4. Reports by the Trustee.
(a) On or before July 15 in each year in which any of
the Securities are Outstanding, the Trustee shall transmit by
mail, first class postage prepaid, to the Securityholders, as
their names and addresses appear upon the Security Register, a
brief report dated as of the preceding May 15, if and to the
extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and
313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of
such transmission to Securityholders, be filed by the Trustee
with the Company, with each stock exchange upon which any Securi-
ties are listed (if so listed) and also with the Commission. The
Company agrees to notify the Trustee when any Securities become
listed on any stock exchange.
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.1. Events of Default.
(a) Whenever used herein with respect to Securities of
a particular series, "Event of Default" means any one or more of
the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any in-
stallment of interest upon any of the Securities of that
series, as and when the same shall become due and payable,
and continuance of such default for a period of __ days;
provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms
of any indenture supplemental hereto, shall not constitute a
default in the payment of interest for this purpose;
31<PAGE>
(2) the Company defaults in the payment of the princi-
pal of (or premium, if any, on) any of the Securities of
that series as and when the same shall become due and pay-
able whether at maturity, upon redemption, by declaration or
otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series;
provided, however, that a valid extension of the maturity of
such Securities in accordance with the terms of any inden-
ture supplemental hereto shall not constitute a default in
the payment of principal or premium, if any;
(3) if applicable to the Securities of that series,
failure by the Company to issue NorAm Common Stock upon an
election by the Holder or Holders of such Debt Securities to
convert such Debt Securities into shares of NorAm Common
Stock pursuant to the supplemental indenture, Board Reso-
lution or other instrument authorizing such series of Secu-
rities;
(4) the Company fails to observe or perform any other
of its covenants or agreements with respect to that series
contained in this Indenture or otherwise established with
respect to that series of Securities pursuant to Section 2.1
hereof (other than a covenant or agreement that has been
expressly included in this Indenture solely for the benefit
of one or more series of Securities other than such series)
for a period of 90 days after the date on which written
notice of such failure, requiring the same to be remedied
and stating that such notice is a "Notice of Default" here-
under, shall have been given to the Company by the Trustee,
by registered or certified mail, or to the Company and the
Trustee by the holders of at least 25% in principal amount
of the Securities of that series at the time Outstanding;
(5) the Company pursuant to or within the meaning of
any Bankruptcy Law (i) commences a voluntary case, (ii)
consents to the entry of an order for relief against it in
an involuntary case, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit
of its creditors;
(6) a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief against the
Company in an involuntary case, (ii) appoints a Custodian of
32<PAGE>
the Company for all or substantially all of their respective
property, or (iii) orders the liquidation of the Company or
the Guarantor, and the order or decree remains unstayed and
in effect for 90 days; or
(7) in the event Securities are issued to a NorAm
Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such NorAm Trust, such NorAm
Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Securities
to holders of Trust Securities in liquidation of their
interests in such NorAm Trust, (ii) the redemption of all of
the outstanding Trust Securities of such NorAm Trust or
(iii) certain mergers, consolidations or amalgamation, each
as permitted by the Declaration of such NorAm Trust.
(b) In each and every such case, unless the principal
of all the Securities of that series shall have already become
due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Securities of that
series then Outstanding hereunder, by notice in writing to the
Company (and to the Trustee if given by such Securityholders),
may declare the principal of all the Securities of that series to
be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable,
notwithstanding anything contained in this Indenture or in the
Securities of that series or established with respect to that
series pursuant to Section 2.1 to the contrary.
(c) At any time after the principal of the Securities
of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the
holders of a majority in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by written
notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if: (i) the Company has paid or
deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of that series
and the principal of (and premium, if any, on) any and all
Securities of that series that shall have become due otherwise
than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforce-
able under applicable law, upon overdue installments of interest,
33<PAGE>
at the rate per annum expressed in the Securities of that series
to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.6, and (ii) any and all Events of
Default under the Indenture with respect to such series, other
than the nonpayment of principal on Securities of that series
that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 6.6.
No such rescission and annulment shall extend to or
shall affect any subsequent default or impair any right conse-
quent thereon.
(d) In case the Trustee shall have proceeded to
enforce any right with respect to Securities of that series under
this Indenture and such proceedings shall have been discontinued
or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee
shall be restored respectively to their former positions and
rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceed-
ings had been taken.
SECTION 6.2. Collection of Indebtedness and Suits for
Enforcement by Trustee.
(a) The Company covenant that (1) in case it shall
default in the payment of any installment of interest on any of
the Securities of a series, or any payment required by any
sinking or analogous fund established with respect to that series
as and when the same shall have become due and payable, and such
default shall have continued for a period of 90 Business Days, or
(2) in case it shall default in the payment of the principal of
(or premium, if any, on) any of the Securities of a series when
the same shall have become due and payable, whether upon maturity
of the Securities of a series or upon redemption or upon declara-
tion or otherwise, then, upon demand of the Trustee or the
Guarantor will pay to the Trustee, for the benefit of the holders
of the Securities of that series, the whole amount that then
shall have been become due and payable on all such Securities for
principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if
any) and (to the extent that payment of such interest is enforce-
able under applicable law and, if the Securities are held by a
NorAm Trust or a trustee of such trust, without duplication of
34<PAGE>
any other amounts paid by such NorAm Trust or trustee in respect
thereof) upon overdue installments of interest at the rate per
annum expressed in the Securities of that series; and, in addi-
tion thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, and the amount payable to
the Trustee under Section 7.6.
(b) If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or
other obligor upon the Securities of that series and collect the
moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or other obligor upon
the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquida-
tion, bankruptcy, reorganization, readjustment, arrangement,
composition or judicial proceedings affected the Company or the
creditors or property of either, the Trustee shall have power to
intervene in such proceedings and take any action therein that
may be permitted by the court and shall (except as may be other-
wise provided by law) be entitled to file such proofs of claim
and other papers and documents as may be necessary or advisable
in order to have the claims of the Trustee and of the holders of
Securities of such series allowed for the entire amount due and
payable by the Company under the Indenture at the date of insti-
tution of such proceedings and for any additional amount that may
become due and payable by the Company after such date, and to
collect and receive any moneys or other property payable or
deliverable on any such claim, and to distribute the same after
the deduction of the amount payable to the Trustee under Section
7.6; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of
Securities of such series to make such payments to the Trustee,
and, in the event that the Trustee shall consent to the making of
such payments directly to such Securityholders, to pay to the
Trustee any amount due it under Section 7.6.
(d) All rights of action and of asserting claims under
this Indenture, or under any of the terms established with
respect to Securities of that series, may be enforced by the
35<PAGE>
Trustee without the possession of any of such Securities, or the
production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall, after provision for
payment to the Trustee of any amounts due under Section 7.6, be
for the ratable benefit of the holders of the Securities of such
series.
In case of an Event of Default hereunder, the Trustee
may in its discretion proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect
and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of
the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee
by this Indenture or by law.
Nothing contained herein shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Securityholder any plan of reorganization, arrange-
ment, adjustment or composition affecting the Securities of that
series or the rights of any holder thereof or to authorize the
Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 6.3. Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this
Article with respect to a particular series of Securities shall
be applied in the following order, at the date or dates fixed by
the Trustee and, in case of the distribution of such moneys on
account of principal (or premium, if any) or interest, upon
presentation of the Securities of that series, and notation
thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses of collec-
tion and of all amounts payable to the Trustee under Section
7.6;
36<PAGE>
SECOND: To the payment of all Senior Indebtedness of
the Company if and to the extent required by Article Four-
teen; and
THIRD: To the payment of the amounts then due and
unpaid upon Securities of such series for principal (and
premium, if any) and interest, in respect of which or for
the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal
(and premium, if any) and interest, respectively.
SECTION 6.4. Limitation on Suits.
No holder of any Security of any series shall have any
right by virtue or by availing of any provision of this Indenture
to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to
the Trustee written notice of an Event of Default and of the
continuance thereof with respect to the Securities of such series
specifying such Event of Default, as hereinbefore provided; (ii)
the holders of not less than 25% in aggregate principal amount of
the Securities of such series then Outstanding shall have made
written request upon the Trustee to institute such action, suit
or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reason-
able indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; and (iv) the
Trustee for 60 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 60 day period, the
holders of a majority in principal amount of the Securities of
that series do not give the Trustee a direction inconsistent with
the request.
Notwithstanding anything contained herein to the
contrary, any other provisions of this Indenture, the right of
any holder of any Security to receive payment of the principal of
(and premium, if any) and interest on such Security, as therein
provided, on or after the respective due dates expressed in such
Security (or in the case of redemption, on the redemption date),
or to institute suit for the enforcement of any such payment on
or after such respective dates or redemption date, shall not be
37<PAGE>
impaired or affected without the consent of such holder and by
accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security
of such series with every other such taker and holder and the
Trustee, that no one or more holders of Securities of such series
shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Securi-
ties, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities of
series. For the protection and enforcement of the provisions of
this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in
equity.
SECTION 6.5. Rights and Remedies Cumulative; Delay or
Omission Not Waiver.
(a) Except as otherwise provided in Section 2.7, all
powers and remedies given by this Article to the Trustee or to
the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and
remedies available to the Trustee or the holders of the Securi-
ties, by judicial proceedings or otherwise, to enforce the per-
formance or observance of the covenants and agreements contained
in this Indenture or otherwise established with respect to such
Securities.
(b) No delay or omission of the Trustee or of any
holder of any of the Securities to exercise any right or power
accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 6.4, every
power and remedy given by this Article or by law to the Trustee
or the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the
Securityholders.
38<PAGE>
SECTION 6.6. Control by Securityholders.
The holders of a majority in aggregate principal amount
of the Securities of any series at the time Outstanding, deter-
mined in accordance with Section 8.4, 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 such series;
provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture or be unduly prejudi-
cial to the rights of holders of Securities of any other series
at the time Outstanding determined in accordance with Section
8.4. Subject to the provisions of Section 7.1, the Trustee shall
have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers
of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Securities of any
series at the time Outstanding affected thereby, determined in
accordance with Section 8.4, may on behalf of the holders of all
of the Securities of such series waive any past default in the
performance of any of the covenants contained herein or estab-
lished pursuant to Section 2.1 with respect to such series and
its consequences, except (i) a default in the payment of the
principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due
by the terms of such Securities otherwise than by acceleration
(unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal and any
premium has been deposited with the Trustee (in accordance with
Section 6.1(c)), (ii) a default in the covenants contained in
Section 4.6 or (iii) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended without
the consent of the Holder of each Outstanding Security of such
series affected; provided, however, that if the Debt Securities
of such series are held by a NorAm Trust or a trustee of such
trust, such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation prefer-
ence of Trust Securities of the applicable NorAm Trust shall have
consented to such waiver or modification to such waiver; provided
further, that if the consent of the Holder of each Outstanding
Debt Security is required, such waiver shall not be effective
until each holder of the Trust Securities of the applicable NorAm
Trust shall have consented to such waiver. Upon any such waiver,
the default covered thereby shall be deemed to be cured for all
39<PAGE>
purposes of this Indenture and the Company, the Trustee and the
holders of the Securities of such series shall be restored to
their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 6.7. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of
any Securities by such holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit insti-
tuted by the Trustee, to any suit instituted by any Security-
holder, or group of Securityholders, holding more than 10% in
aggregate principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (or premium, if
any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established
pursuant to this Indenture.
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities of
Trustee.
(a) The Trustee prior to the occurrence of an Event of
Default with respect to the Securities of a series and after the
curing of all Events of Default with respect to the Securities of
that series that may have occurred, shall undertake to perform
with respect to the Securities of such series such duties and
only such duties as are specifically set forth in this Inden-
ture,and no implied covenants shall be read into this Indenture
against the Trustee. In case an Event of Default with respect to
40<PAGE>
the Securities of a series has occurred (that has not been cured
or waived), the Trustee shall exercise with respect to Securities
of that series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) prior to the occurrence of an Event of Default
with respect to the Securities of a series and after the
curing or waiving of all such Events of Default with respect
to that series that may have occurred:
(i) the duties and obligations of the Trustee
shall with respect to the Securities of such series be
determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable with
respect to the Securities of such series except for the
performance of such duties and obligations as are
specifically set forth in this Indenture, and no im-
plied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may with respect to the Secu-
rities of such series conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any
such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to
the requirement of this Indenture;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
proved that the Trustee, was negligent in ascertaining the
pertinent facts;
41<PAGE>
(3) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith
in accordance with the direction of the holders of not less
than a majority in principal amount of the Securities of any
series at the time Outstanding relating to the time, method
and place of conducting any proceeding for any remedy avail-
able to the Trustee, or exercising any trust or power con-
ferred upon the Trustee under this Indenture with respect to
the Securities of that series; and
(4) None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the perfor-
mance of any of its duties or in the exercise of any of its
rights or powers, if there is reasonable ground for believ-
ing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture
or adequate indemnity against such risk is not reasonably
assured to it.
SECTION 7.2. Certain Rights of Trustee.
Except as otherwise provided in Section 7.1:
(a) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certifi-
cate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by a
Board Resolution or an instrument signed in the name of the
Company by the President or any Vice President and by the Secre-
tary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is
specifically prescribed herein);
(c) 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 or suffered or omitted hereunder in good faith and
in reliance thereon;
42<PAGE>
(d) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Inden-
ture at the request, order or direction of any of the Security-
holders, pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the
Securities (that has not been cured or waived) to exercise with
respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and to use the same degree
of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs;
(e) The Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any inves-
tigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security, or other
papers or documents, unless requested in writing so to do by the
holders of not less than a majority in principal amount of the
Outstanding Securities of the particular series affected thereby
(determined as provided in Section 8.4); provided, however, that
if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities
as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and
(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.
43<PAGE>
SECTION 7.3. Trustee Not Responsible for Recitals or
Issuance or Securities.
(a) The recitals contained herein and in the Securi-
ties shall be taken as the statements of the Company and the
Trustee assumes no responsibility for the correctness of the
same.
(b) The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use
or application by the Company of any of the Securities or of the
proceeds of such Securities, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision
of this Indenture or established pursuant to Section 2.1, or for
the use or application of any moneys received by any paying agent
other than the Trustee.
SECTION 7.4. May Hold Securities.
The Trustee or any paying agent or Security Registrar,
in its individual or any other capacity, may become the owner or
pledgee of Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.
SECTION 7.5. Moneys Held in Trust.
Subject to the provisions of Section 11.5, all moneys
received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
SECTION 7.6. Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the
Trustee, and the Trustee shall be entitled to, such reasonable
compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust),
as the Company and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the
trusts hereby created and in the exercise and performance of any
44<PAGE>
of the powers and duties hereunder of the Trustee, and, except as
otherwise expressly provided herein, the Company will pay or
reimburse the Trustee upon its request for all reasonable expens-
es, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (includ-
ing the reasonable compensation and the expenses and disburse-
ments of its counsel and of all Persons not regularly in its
employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also cove-
nants to indemnify the Trustee (and its officers, agents, direc-
tors and employees) for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connec-
tion with the acceptance or administration of this trust, includ-
ing the costs and expenses of defending itself against any claim
of liability in the premises.
(b) The obligations of the Company under this Section
to compensate and indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of
the holders of particular Securities.
SECTION 7.7. Reliance on Officers' Certificate.
Except as otherwise provided in Section 7.1, whenever
in the administration of the provisions of this Indenture the
Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to
take any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of
this Indenture upon the faith thereof.
SECTION 7.8. Disqualification: Conflicting Interests.
45<PAGE>
If the Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust Inden-
ture Act.
SECTION 7.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to
the Securities issued hereunder which shall at all times be a
corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or other Person
permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million 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 aforesaid supervis-
ing or examining authority, then for the purposes of this Sec-
tion, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The Company
may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as
Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the
effect specified in Section 7.10.
SECTION 7.10. Resignation and Removal; Appointment of
Successor.
(a) The Trustee or any successor hereafter appointed,
may at any time resign with respect to the Securities of one or
more series by giving written notice thereof to the Company and
by transmitting notice of resignation by mail, first class
postage prepaid, to the Securityholders of such series, as their
names and addresses appear upon the Security Register. Upon
receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Securities of such
series by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
46<PAGE>
trustee. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor trustee with respect to Securities of such series, or
any Securityholder of that series who has been a bona fide holder
of a Security or Securities for at least six months may, subject
to the provisions of Section 6.8, on behalf of himself and all
others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any one of the following shall
occur:
(1) the Trustee shall fail to comply with the provi-
sions of subsection (a) of Section 7.8 after written request
therefor by the Company or the Guarantor or by any Security-
holder who has been a bona fide holder of a Security or
Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accor-
dance with the provisions of Section 7.9 and shall fail to
resign after written request therefor by the Company or by
any such Securityholder; or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or commence a
voluntary bankruptcy proceeding, or a receiver of the Trust-
ee or of its property shall be appointed or consented to, or
any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any
such case, the Company may remove the Trustee with respect
to all Securities and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered
to the Trustee so removed and one copy to the successor
trustee, or, subject to the provisions of Section 6.8,
unless the Trustee's duty to resign is stayed as provided
herein, any Securityholder who has been a bona fide holder
of a Security or Securities for at least six months may, on
behalf of that holder and all others similarly situated,
petition any court of competent jurisdiction for the removal
47<PAGE>
of the Trustee and the appointment of a successor trustee.
Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and ap-
point a successor trustee.
(c) The holders of a majority in aggregate principal
amount of the Securities of any series at the time Outstanding
may at any time remove the Trustee with respect to such series by
so notifying the Trustee and the Company and may appoint a
successor Trustee for such series with the consent of the Compa-
ny.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee with respect to the Securities
of a series pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this
Section may be appointed with respect to the Securities of one or
more series or all of such series, and at any time there shall be
only one Trustee with respect to the Securities of any particular
series.
SECTION 7.11. Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a succes-
sor 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 succes-
sor trustee with respect to the Securities of one or more (but
not all) series, the Company, the retiring Trustee and each
48<PAGE>
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) 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, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee
shall with respect to the Securities of that or those series to
which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or
for the performance of the duties and obligations vested in the
Trustee under this Indenture, and each such successor trustee,
without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to
which the appointment of such successor trustee relates; but, on
request of the Company or any successor trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
trustee, to the extent contemplated by such supplemental inden-
ture, the 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
49<PAGE>
such rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment
unless at the time of such acceptance such successor trustee
shall be qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor
trustee as provided in this Section, the Company shall transmit
notice of the succession of such trustee hereunder by mail, first
class postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company
and the Guarantor.
SECTION 7.12. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corpora-
tion resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation succeeding
to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corpora-
tion shall be qualified under the provisions of Section 7.8 and
eligible under the provisions of Section 7.9, without the execu-
tion or filing of any paper or any further act on the part of any
of the parties hereto, anything herein to the contrary notwith-
standing. 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 7.13. Preferential Collection of Claims
Against the Company.
The Trustee shall comply with Section 311(a) of the
Trust Indenture Act, excluding any creditor relationship de-
scribed 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 included therein.
50<PAGE>
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.1. Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate
principal amount of the Securities of a particular series may
take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of
that series have joined therein may be evidenced by any instru-
ment or any number of instruments of similar tenor executed by
such holders of Securities of that series in Person or by agent
or proxy appointed in writing.
If the Company shall solicit from the Securityholders
of any series any request, demand, authorization, direction,
notice, consent, waiver or other action, the Company may, at its
option, as evidenced by an Officers' Certificate, fix in advance
a record date for such series for the determination of Security-
holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date
is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other action may be given before or after the
record date, but only the Securityholders of record at the close
of business on the record date shall be deemed to be Security-
holders for the purposes of determining whether Securityholders
of the requisite proportion of Outstanding Securities of that
series have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Securities of
that series shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of
this Indenture not later than six months after the record date.
SECTION 8.2. Proof of Execution by Securityholders.
51<PAGE>
Subject to the provisions of Section 7.1, proof of the
execution of any instrument by a Securityholder (such proof will
not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be suffi-
cient if made in the following manner:
(a) The fact and date of the execution by any such
Person of any instrument may be proved in any reasonable manner
acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the
Security Register of such Securities or by a certificate of the
Security Registrar thereof.
(c) The Trustee may require such additional proof of
any matter referred to in this Section as it shall deem neces-
sary.
SECTION 8.3. Who May be Deemed Owners.
Prior to the due presentment for registration of
transfer of any Security, the Company, the Trustee, any paying
agent and any Security Registrar may deem and treat the Person in
whose name such Security shall be registered upon the books of
the Company as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notice
of ownership or writing thereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and (subject to
Section 2.3) interest on such Security and for all other purpos-
es; and neither the Company nor the Trustee nor any paying agent
nor any Security Registrar shall be affected by any notice to the
contrary.
SECTION 8.4. Certain Securities Owned by Company
Disregarded.
In determining whether the holders of the requisite
aggregate principal amount of Securities of a particular series
have concurred in any direction, consent of waiver under this
Indenture, the Securities of that series that are owned by the
Company or any other obligor on the Securities of that series or
by any Person directly or indirectly controlling or controlled by
or under common control with the Company or any other obligor on
the Securities of that series shall be disregarded and deemed not
52<PAGE>
to be Outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or
waiver, only Securities of such series that the Trustee actually
knows are so owned shall be so disregarded. The Securities so
owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section, if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the
pledgee is not a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
SECTION 8.5. Actions Binding on Future
Securityholders.
At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.1, of the taking of any
action by the holders of the majority or percentage in aggregate
principal amount of the Securities of a particular series speci-
fied in this Indenture in connection with such action, any holder
of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to
such action may, by filing written notice with the Trustee, and
upon proof of holding as provided in Section 8.2, revoke such
action so far as concerns such Security. Except as aforesaid any
such action taken by the holder of any Security shall be conclu-
sive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange
therefor, on registration of transfer thereof or in place there-
of, irrespective of whether or not any notation in regard thereto
is made upon such Security. Any action taken by the holders of
the majority or percentage in aggregate principal amount of the
Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon
the Company, the Trustee and the holders of all the Securities of
that series.
53<PAGE>
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without the
Consent of Securityholders.
In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company and the Trustee may
from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without
the consent of the Securityholders, for one or more of the
following purposes:
(a) to cure any ambiguity, defect, or inconsistency
herein, in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(d) 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;
(e) to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or
purposes of issue, authentication, and delivery of Securities, as
herein set forth;
(f) to make any change that does not adversely affect
the rights of any Securityholder in any material respect; or
(g) to provide for the issuance of and establish the
form and terms and conditions of the Securities of any series, to
establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or any series of Securi-
ties, or to add to the rights of the holders of any series of
Securities.
54<PAGE>
The Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, and
to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated
to enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions
of this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of
Section 9.2.
SECTION 9.2. Supplemental Indentures With Consent of
Securityholders.
With the consent (evidenced as provided in Section 8.1)
of the holders of not less than a majority in aggregate principal
amount of the Securities of each series affected by such supple-
mental indenture or indentures at the time Outstanding, the
Company, when authorized by Board Resolutions, and the Trustee
may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner not covered
by Section 9.1 the rights of the holders of the Securities of
such series under this Indenture; provided, however, that no such
supplemental indenture shall without the consent of the holders
of each Debenture then Outstanding and affected thereby, (i)
extend the fixed maturity of any Securities of any series, or
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 Security so affected or (ii) reduce the aforesaid
percentage of Securities, the holders of which are required to
consent to any such supplemental indenture provided, further,
that if the Debt Securities of such series are held by a NorAm
Trust or a trustee of such trust, such supplemental indenture
shall not be effective until the holders of a majority in liqui-
dation preference of Trust Securities of the applicable Trust
shall have consented to such supplemental indenture; provided
further, that if the consent of the Holder of each Outstanding
55<PAGE>
Debt Security is required, such supplemental indenture shall not
be effective until each holder of the Trust Securities of the
applicable NorAm Trust shall have consented to such supplemental
indenture.
It shall not be necessary for the consent of the
Securityholders of any series affected thereby under this Section
to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
SECTION 9.3. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.1,
this Indenture shall, with respect to such series, be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and
the holders of Securities of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 9.4. Securities Affected by Supplemental In-
dentures.
Securities of any series, affected by a supplemental
indenture, authenticated and delivered after the execution of
such supplemental indenture pursuant to the provisions of this
Article or of Section 10.1, may bear a notation in form approved
by the Company, provided such form meets the requirements of any
exchange upon which such series may be listed, as to any matter
provided for in such series may be listed, as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities of that series so modified as
to conform, in the opinion of the Board of Directors of the
Company, to any modification of this Indenture contained in any
such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the
Securities of that series then Outstanding.
56<PAGE>
SECTION 9.5. Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by their
Board Resolutions authorizing the execution of any such supple-
mental indenture, and upon the filing with the Trustee of evi-
dence of the consent of Securityholders required to consent
thereto as aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such supple-
mental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion but shall not be obligated to enter
into such supplemental indenture. The Trustee, subject to the
provisions of Section 7.1, may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed
pursuant to this Article is authorized or permitted by, and
conforms to, the terms of this Article and that it is proper for
the Trustee under the provisions of this Article to join in the
execution thereof.
Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions
of this Section, the Trustee shall transmit by mail, first class
postage prepaid, a notice, setting forth in general terms the
substance of such supplemental indenture, to the Securityholders
of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to
mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental
indenture.
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.1. Company May Consolidate, Etc.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations
(whether or not affiliated with the Company, as the case may be),
or successive consolidations or mergers in which the Company, as
the case may be, or its successor or successors shall be a party
or parties, or shall prevent any sale, conveyance, transfer or
other disposition of the property of the Company, as the case may
57<PAGE>
be, or its successor or successors as an entirety, or substan-
tially as an entirety, to any other corporation (whether or not
affiliated with the Company, as the case may be, or its successor
or successors) authorized to acquire and operate the same;
provided, however, the Company hereby covenants and agree that,
upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, the due and punctual payment, in the case
of the Company, of the principal of (premium, if any) and inter-
est on all of the Debt Securities of all series in accordance
with the terms of each series, according to their tenor and the
due and punctual performance and observance of all the covenants
and conditions of this Indenture with respect to each series or
established with respect to such series pursuant to Section 2.1
to be kept or performed by the Company as the case may be, shall
be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Trustee executed and deliv-
ered to the Trustee by the entity formed by such consolidation,
or into which the Company, as the case may be, shall have been
merged, or by the entity which shall have acquired such property.
SECTION 10.2. Successor Corporation Substituted.
(a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption
by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the
Trustee, of, in the case of the Company, the due and punctual
payment of the principal of, premium, if any, and interest on all
of the Debt Securities of all series Outstanding and the due and
punctual performance of all of the covenants and conditions of
this Indenture or established with respect to each series of the
Securities pursuant to Section 2.1 to be performed by the Compa-
ny, as the case may be, with respect to each series, such succes-
sor corporation shall succeed to and be substituted for the
Company, as the case may be, with the same effect as if it had
been named as the Company, as the case may be, herein, and there-
upon the predecessor corporation shall be relieved of all obliga-
tions and covenants under this Indenture and the Securities.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in phrase-
ology and form (but not in substance) may be made in the Securi-
ties thereafter to be issued as may be appropriate.
58<PAGE>
(c) Nothing contained in this Indenture or in any of
the Securities shall prevent the Company from merging into itself
or acquiring by purchase or otherwise all or any part of the
property of any other Person (whether or not affiliated with the
Company).
SECTION 10.3. Evidence of Consolidation, Etc. to Trus-
tee.
The Trustee, subject to the provisions of Section 7.1,
may receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions
of this Article.
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.1. Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to
the Trustee for cancellation all Securities of a series thereto-
fore authenticated (other than any Securities that shall have ben
destroyed, lost or stolen and that shall have been replaced or
paid as provided in Section 2.7) and Securities for whose payment
money or Governmental Obligations have theretofore been deposited
in trust or segregated and held in trust by the Company (and
thereupon repaid to the Company or discharged from such trust, as
provided in Section 11.5); or all such Securities of a particular
series not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company
shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations
sufficient or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay at maturity or upon redemption all Securities of
that series not theretofore delivered to the Trustee for cancel-
lation, including principal (and premium, if any) and interest
due or to become due to such date of maturity or date fixed for
59<PAGE>
redemption, as the case may be, and if the Company shall also pay
or cause to be paid all other sums payable hereunder with respect
to such series by the Company; then this Indenture shall thereup-
on cease to be of further effect with respect to such series
except for the provisions of Sections 2.3, 2.5, 2.7, 4.1, 4.2,
4.3 and 7.10, that shall survive until the date of maturity or
redemption date, as the case may be, and Sections 7.6 and 11.5,
that shall survive to such date and thereafter, and the Trustee,
on demand of the Company and at the cost and expense of the
Company, shall execute proper instruments acknowledging satis-
faction of and discharging this Indenture with respect to such
series.
SECTION 11.2. Discharge of Obligations.
If at any time all such Securities of a particular
series not heretofore delivered to the Trustee for cancellation
or that have not become due and payable as described in Section
11.1 shall have been paid by the Company by depositing irrevoca-
bly with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient to pay at maturity or upon
redemption all such Securities of that series not theretofore
delivered to the Trustee for cancellation, including principal
(and premium, if any) and interest due or to become due to such
date of maturity or date fixed for redemption, as the case may
be, and if the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company with respect to such
series, then after the date such moneys or Governmental Obliga-
tions, as the case may be, are deposited with the Trustee the
obligations of the Company under this Indenture with respect to
such series shall cease to be of further effect except for the
provisions of Sections 2.3, 2.5, 2.7, 4.1, 4.2, 4,3, 7.6, 7.10
and 11.5 hereof that shall survive until such Securities shall
mature and be paid. Thereafter, Sections 7.6 and 11.5 shall
survive.
SECTION 11.3. Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.1 or 11.2 shall be held in
trust and shall be available for payment as due, either directly
or through any paying agent (including the Company acting as its
own paying agent), to the holders of the particular series of
Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.
60<PAGE>
SECTION 11.4. Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of
this Indenture all moneys or Governmental Obligations then held
by any paying agent under the provisions of this Indenture shall,
upon demand of the Company, be paid to the Trustee and thereupon
such paying agent shall be released from all further liability
with respect to such moneys or Governmental Obligations.
SECTION 11.5. Repayment to Company.
Any moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company in
trust for payment of principal of or premium or interest on the
Securities of a particular series that are not applied but remain
unclaimed by the holders of such Securities for at least two
years after the date upon which the principal of (and premium, if
any) or interest on such Securities shall have respectively
become due and payable, shall be repaid to the Company, as the
case may be, on May 31 of each year or (if then held by the
Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further
liability with respect to such moneys or Governmental Obliga-
tions, and the holder of any of the Securities entitled to
receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company or the Guarantor for the
payment thereof.
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.1. No Recourse.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim
based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past,
present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company
or the Guarantor or any such predecessor or successor corpora-
tion, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or
61<PAGE>
otherwise; it being expressly understood that this Indenture and
the obligations issued hereunder are solely corporate obliga-
tions, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockhold-
ers, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of
the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained
in this Indenture or in any of the Securities or implied there-
from; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution
or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as
such, because of the creation of the indebtedness hereby autho-
rized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securi-
ties or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.1. Effect on Successors and Assigns.
All the covenants, stipulations, promises and agree-
ments in this Indenture contained by or on behalf of the Company
shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 13.2. Actions by Successor.
Any act or proceeding by any provision of this Inden-
ture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and
performed with like force and effect by the corresponding board,
committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company, as the case may be.
SECTION 13.3. Surrender of Company Powers.
The Company by instrument in writing executed by
authority of 2/3 (two-thirds) of its Board of Directors and
62<PAGE>
delivered to the Trustee may surrender any of the powers reserved
to the Company, and thereupon such power so surrendered shall
terminate both as to the Company, as the case may be, and as to
any successor corporation.
SECTION 13.4. Notices.
Except as otherwise expressly provided herein any
notice or demand that by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by
the holders of Securities to or on the Company may be given or
served by being deposited first class postage prepaid in a post-
office letterbox addressed (until another address is filed in
writing by the Company with the Trustee), as follows: c/o NorAm
Energy Corp., ______________________________________, Attention:
_________________. Any notice, election, request or demand by
the Company or any Securityholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes,
if given or made in writing at the Corporate Trust Office of the
Trustee.
SECTION 13.5. Governing Law.
This Indenture and each Security shall be deemed to be
a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the
laws of said State.
SECTION 13.6. Treatment of Debt Securities as Debt.
It is intended that the Debt Securities will be treated
as indebtedness and not as equity for federal income tax purpos-
es. The provisions of this Indenture shall be interpreted to
further this intention.
SECTION 13.7. Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to
the Trustee to take any action under any of the provisions of
this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such applica-
63<PAGE>
tion or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certifi-
cate or opinion need be furnished.
(b) Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant in this
Indenture shall include (1) a statement that the Person making
such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examina-
tion or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a state-
ment that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such Person, such condition or
covenant has been complied with.
SECTION 13.8. Payments on Business Days.
Except as provided pursuant to Section 2.1 pursuant to
a Board Resolution, and as set forth in an Officers' Certificate,
or established in one or more indentures supplemental to this
Indenture, in any case where the date of maturity of interest or
principal of any Security or the date of redemption of any
Security shall not be a Business Day, then payment of interest or
principal (and premium, if any) may be made on the next succeed-
ing Business Day with the same force and effect as if made on the
nominal date of maturity or redemption, and no interest shall
accrue for the period after such nominal date.
SECTION 13.9. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Inden-
ture limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
SECTION 13.10. Counterparts.
This Indenture may be executed in any number of coun-
terparts, each of which shall be an original, but such counter-
parts shall together constitute but one and the same instrument.
64<PAGE>
SECTION 13.11. Separability.
In case any one or more of the provisions contained in
this Indenture or in the Securities of any series shall for any
reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Indenture or of such
Securities, but this Indenture and such Securities shall be con-
strued as if such invalid or illegal or unenforceable provision
had never been contained herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign
any of its respective rights or obligations under this Indenture
to a direct or indirect wholly-owned Subsidiary of the Company,
provided that, in the event of any such assignment, the Company,
as the case may be, will remain liable for all such obligations.
Subject to the foregoing, the Indenture is binding upon and
inures to the benefit of the parties thereto and their respective
successors and assigns. This Indenture may not otherwise be
assigned by the parties thereto.
SECTION 13.13. Acknowledgement of Rights.
The Company acknowledges that, with respect to any Debt
Securities held by NorAm Trust or a trustee of such trust, if the
Institutional Trustee of such Trust fails to enforce its rights
under this Indenture as the holder of the series of Debt Securi-
ties held as the assets of such NorAm Trust any holder of Pre-
ferred Securities may institute legal proceedings directly
against the Company to enforce such Institutional Trustee's
rights under this Indenture without first instituting any legal
proceedings against such Institutional Trustee or any other
person or entity.
ARTICLE XIV.
SUBORDINATION OF SECURITIES
SECTION 14.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of
Debt Securities issued hereunder by such Holder's acceptance
65<PAGE>
thereof likewise covenants and agrees, that all Debt Securities
shall be issued subject to the provisions of this Article XIV;
and each Holder of a Debt Security, whether upon original issue
or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment by the Company of the principal of, premi-
um, if any, and interest on all Debt Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XIV shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 14.2. Default on Senior Indebtedness.
In the event and during the continuation of any default
by the Company in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness of the Company,
as the case may be, or in the event that the maturity of any
Senior Indebtedness of the Company, as the case may be, has been
accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the princi-
pal (including redemption and sinking fund payments) of, or
premium, if any, or interest on the Debt Securities.
In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is
prohibited by the preceding paragraph of this Section 14.3, such
payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Senior Indebtedness or
their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebt-
edness may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing within 90 days of such
payment of the amounts then due and owing on the Senior Indebted-
ness and only the amounts specified in such notice to the Trustee
shall be paid to the holders of Senior Indebtedness.
66<PAGE>
SECTION 14.3. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all
Senior Indebtedness of the Company shall first be paid in full,
or payment thereof provided for in money in accordance with its
terms, before any payment is made by the Company on account of
the principal (and premium, if any) or interest on the Debt
Securities; and upon any such dissolution or winding-up or liqui-
dation or reorganization, any payment by the Company, or distri-
bution of assets of the Company of any kind or character, whether
in cash, property or securities, to which the Holders of the Debt
Securities or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XIV, shall be
paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Debt Securities or by the
Trustee under the Indenture if received by them or it, directly
to the holders of Senior Indebtedness of the Company (pro rata to
such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, as calculated by the Company)
or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as
their respective interests may appear, to the extent necessary to
pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Debt Securities
or to the Trustee.
In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by
the foregoing, shall be received by the Trustee before all Senior
Indebtedness of the Company is paid in full, or provision is made
for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
67<PAGE>
instruments evidencing such Senior Indebtedness may have been
issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid
to the extent necessary to pay such Senior Indebtedness in full
in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
For purposes of this Article XIV, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordi-
nated at least to the extent provided in this Article XIV with
respect to the Debt Securities to the payment of all Senior In-
debtedness of the Company, as the case may be, that may at the
time be outstanding, provided that (i) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any
such reorganization or readjustment, and (ii) the rights of the
holders of such Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment.
The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolu-
tion of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in
Article X of the Indenture shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of
this Section 14.3 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with
the conditions stated in Article X of the Indenture. Nothing in
Section 14.2 or in this Section 14.3 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.6 of the
Indenture.
SECTION 14.4. Subrogation.
Subject to the payment in full of all Senior Indebt-
edness of the Company, the rights of the Holders of the Debt
Securities shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, as the case may be,
applicable to such Senior Indebtedness until the principal of
(and premium, if any) and interest on the Debt Securities shall
68<PAGE>
be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebted-
ness of any cash, property or securities to which the Holders of
the Debt Securities or the Trustee would be entitled except for
the provisions of this Article XIV, and no payment over pursuant
to the provisions of this Article XIV to or for the benefit of
the holders of such Senior Indebtedness by Holders of the Debt
Securities or the Trustee, shall, as between the Company, its
creditors other than Holders of Senior Indebtedness of the
Company, and the holders of the Debt Securities, be deemed to be
a payment by the Company to or on account of such Senior Indebt-
edness. It is understood that the provisions of this Article XIV
are and are intended solely for the purposes of defining the
relative rights of the Holders of the Debt Securities, on the one
hand, and the holders of such Senior Indebtedness on the other
hand.
Nothing contained in this Article XIV or elsewhere in
the Indenture, this First Supplemental Indenture or in the Debt
Securities is intended to or shall impair, as between the Compa-
ny, its creditors other than the holders of Senior Indebtedness
of the Company, and the Holders of the Debt Securities, the
obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debt Securities the principal of
(and premium, if any) and interest on the Debt 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 Debt Securities and creditors of the
Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anyth-
ing herein or therein prevent the Trustee or the Holder of any
Debt Security from exercising all remedies otherwise permitted by
applicable law upon default under the Indenture, subject to the
rights, if any, under this Article XIV of the holders of such
Senior Indebtedness in respect of cash, property or securities of
the Company, as the case may be, received upon the exercise of
any such remedy.
Upon any payment or distribution of assets of the
Company referred to in this Article XIV, the Trustee, subject to
the provisions of Section 7.1 of the Indenture, and the Holders
of the Debt Securities shall be entitled to conclusively rely
upon any order or decree made by any court of competent jurisdic-
tion in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the
69<PAGE>
receiver, trustee in bankruptcy, liquidation trustee, agent or
other Person making such payment or distribution, delivered to
the Trustee or to the Holders of the Debt Securities, for the
purposes of ascertaining the Persons entitled to participate in
such distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, as the case may be, the amount
thereof or payable thereon, the amount or amounts paid or dis-
tributed thereon and all other facts pertinent thereto or to this
Article XIV.
SECTION 14.5. Trustee to Effectuate Subordination.
Each Holder of Debt Securities by such Holder's accep-
tance thereof authorizes and directs the Trustee on such Holder's
behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article XIV and
appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
SECTION 14.6. 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 Debt Securities pursuant
to the provisions of this Article XIV. Notwithstanding the
provisions of this Article XIV 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 Debt Securities pursuant to the
provisions of this Article XIV, 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
7.1 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
6.6 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, any-
thing herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money
70<PAGE>
and to apply the same to the purposes for which they were re-
ceived, 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 7.1
of the Indenture, shall be entitled to conclusively rely on the
delivery to it of a written notice by a Person representing him-
self 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 hold-
ers. 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 XIV, 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 XIV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
SECTION 14.7. Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee in its individual capacity shall be enti-
tled to all the rights set forth in this Article XIV in respect
of any Senior Indebtedness at any time held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness of
the Company, the Trustee undertakes to perform or to observe only
such of its covenants and obligations as are specifically set
forth in this Article XIV, and no implied covenants or obliga-
tions with respect to the holders of such Senior Indebtedness
shall be read into the Indenture or this First Supplemental
Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Indebted-
ness and, subject to the provisions of Section 7.1 of the Inden-
71<PAGE>
ture, the Trustee shall not be liable to any holder of such
Senior Indebtedness if it shall pay over or deliver to Holders of
Debt Securities, the Company or any other Person money or assets
to which any holder of such Senior Indebtedness shall be entitled
by virtue of this Article XIV or otherwise.
SECTION 14.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Company 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, as the
case may be, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company, as the
case may be, with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such
holder may have or otherwise be charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of the
Company may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Debt
Securities, without incurring responsibility to the Holders of
the Debt Securities and without impairing or releasing the subor-
dination provided in this Article XIV or the obligations hereun-
der of the Holders of the Debt Securities to the holders of such
Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebted-
ness or any instrument evidencing the same or any agreement under
which such Senior Indebtedness is outstanding; (ii) sell, ex-
change, release or otherwise deal with any property pledged,
mortgaged or otherwise securing such Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of
such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, as the case may be,
and any other Person.
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.
72<PAGE>
NORAM ENERGY CORP.
By_________________
Attest:
By___________________________________________
[ ]
as Trustee
By__________________
73<PAGE>
STATE OF )
COUNTY OF ) ss.:
On the ____ day of ________________, 1995, before me person-
ally came __________________ to me known, who, being by me duly
sworn, did depose and say that he is the of NORAM ENERGY CORP.,
one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation;
that the seal affixed to the said instrument is such corporation
seal; that it was so affixed by authority of the Board of Direc-
tors of said corporation, and that he signed his name thereto by
like authority.
__________________________
NOTARY PUBLIC
[seal] Commission expires
_____________________________
NOTARY PUBLIC
[seal] Commission expires
74<PAGE>
[Form of Supplemental
Indenture, for Convertible
Junior Subordinated Debentures]
====================================
FIRST SUPPLEMENTAL INDENTURE
between
NorAm Energy Corp.
and
The Bank of New York
Dated as of _______ __, 1995
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. Designation and Principal Amount . . . . 4
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . 4
SECTION 2.3. Form and Payment . . . . . . . . . . . . 5
SECTION 2.4. Global Debenture . . . . . . . . . . . . 5
SECTION 2.5. Interest . . . . . . . . . . . . . . . . 7
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. Special Event Redemption . . . . . . . . 8
SECTION 3.2. Optional Redemption by Company . . . . . 9
SECTION 3.3. No Sinking Fund . . . . . . . . . . . . . 10
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period . . 10
SECTION 4.2. Notice of Extension . . . . . . . . . . . 10
SECTION 4.3. Limitation of Transactions . . . . . . . 11
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses . . . . . . . . . . . 12
Section 5.2. Payment Upon Resignation or Removal . . . 12
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. Listing on an Exchange . . . . . . . . . 13
ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. Conversion Rights . . . . . . . . . . . . 13
i<PAGE>
Page
SECTION 7.2. Conversion Procedures . . . . . . . . . . 13
SECTION 7.3. Conversion Price Adjustments . . . . . . 16
SECTION 7.4. Reclassification, Consolidation, Merger
or Sale of Assets . . . . . . . . . . . . 21
ii<PAGE>
Page
SECTION 7.5. Notice of Adjustments of Conversion
Price . . . . . . . . . . . . . . . . . . 22
SECTION 7.6. Prior Notice of Certain Events . . . . . 22
SECTION 7.7. [Reserved] . . . . . . . . . . . . . . . 23
SECTION 7.8. Dividend or Interest Reinvestment Plans . 23
SECTION 7.9. Certain Additional Rights . . . . . . . . 24
SECTION 7.10. Trustee Not Responsible for Determining
Conversion Price or Adjustments . . . . . 25
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. Form of Convertible Debenture . . . . . . 25
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. Original Issue of Convertible
Debentures . . . . . . . . . . . . . . . 35
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture . . . . . . . . 35
SECTION 10.2. Trustee Not Responsible for Recitals . . 35
SECTION 10.3. Governing Law . . . . . . . . . . . . . . 35
SECTION 10.4. Separability . . . . . . . . . . . . . . 35
SECTION 10.5. Counterparts . . . . . . . . . . . . . . 36
iii<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of ____________,
1995 (the "First Supplemental Indenture"), between NorAm Energy
Corp., a Delaware corporation (the "Company"), and The Bank of
New York, as trustee (the "Trustee") under the Indenture dated as
of ________, 1995 between the Company and the Trustee (the
"Indenture").
WHEREAS, the Company executed and delivered the Inden-
ture to the Trustee to provide for the future issuance of the
Company's unsecured junior subordinated debt securities to be
issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and deliv-
ered as provided in 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 ___% Convertible Junior
Subordinated Debentures due 20[25] (the "Convertible Deben-
tures"), the form and substance of such Convertible Debentures
and the terms, provisions and conditions thereof to be set forth
as provided in the Indenture and this First Supplemental Inden-
ture;
WHEREAS, NorAm Financing [I] [II], a Delaware statutory
business trust ( the "Trust"), has offered to the public $___
million aggregate liquidation amount of its ___% Convertible
Trust Originated Preferred Securities (the "Convertible 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 $___ million aggregate liquidation
amount of its ___% Trust Originated Common Securities, in $____
million aggregate principal amount of the Convertible 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
Convertible Debentures, when executed by the Company and authen-
ticated 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 Convertible Debentures by the Holders thereof,
and for the purpose of setting forth, as provided in the Inden-<PAGE>
ture, the form and substance of the Convertible Debentures and
the terms, provisions and conditions thereof, the Company cove-
nants and agrees with the Trustee as follows:
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) a reference to a Section or Article is to a
Section or Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and
do not affect interpretation;
(f) 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) Convertible Preferred
Security Certificate; (viii) Pricing Agreement; (ix) Institution-
al Trustee; (x) Regular Trustees; (xi) Special Event; and (xii)
Tax Event; and (xiii) Underwriting Agreement;
(g) the following terms have the meanings given to
them in this Section 1.1(g):
"Additional Interest" shall have the meaning set forth
in Section 2.5.
"Compounded Interest" shall have the meaning set forth
in Section 4.1.
"Convertible Preferred Securities" has the meaning set
forth in the recitals to this First Supplemental Indenture.
2<PAGE>
"Declaration" means the Amended and Restated Decla-
ration of Trust of NorAm Financing [I] [II], a Delaware statutory
business trust, dated as of _________, 1995.
"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 Conve-
rtible 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.
["Extended Maturity Date" means, if the Company elects
to extend the Maturity Date in accordance with Section 2.2(b),
the date selected by the Company which is after the Scheduled
Maturity Date but before October __, 2044.]
"Global Debenture" shall have the meaning set forth in
Section 2.4.
"Maturity Date" means the date on which the Convertible
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 Convertible 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.
["Scheduled Maturity Date" means October __, 2025.]
"Senior Indebtedness" means, with respect to the
Company, (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of such obligor for money borrowed
and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by such obligor; (ii) all
capital lease obligations of such obligor; (iii) all obligations
of such obligor issued or assumed as the deferred purchase price
of property, all conditional sale obligations of such obligor and
all obligations of such obligor under any title retention agree-
3<PAGE>
ment (but excluding trade accounts payable arising in the ordi-
nary course of business); (iv) all obligations of such obligor
for the reimbursement on any letter of credit, banker's accep-
tance, security purchase facility or similar credit transaction;
(v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons for the payment of which such
obligor is responsible or liable as obligor, guarantor or other-
wise; 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 obligor (whether or not such obligation
is assumed by such obligor), except for (1) any such indebtedness
that is by its terms subordinated to or pari passu with the
Convertible Debentures, and (2) any debt securities and guaran-
tees in respect of those debt securities, issued to (y) any other
Noram Capital Financing Trust or (z) any other trust, or a
trustee of such trust, partnership or other entity affiliated
with the Company which is a financing vehicle of the Company (a
"Financing Entity") in connection with the issuance by such
Financing Entity of preferred securities or other similar securi-
ties.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities
designated the "___% Convertible Junior Subordinated Debentures
due 20[25]", limited in aggregate principal amount to $___ mil-
lion, which amount shall be as set forth in any written order of
the Company for the authentication and delivery of Convertible
Debentures pursuant to Section ___ of the Indenture.
SECTION 2.2. Maturity. [Select appropriate option]
[USE OPTION 1 IF MATURITY IS FIXED -- The Maturity is
, 2025]
[USE OPTION 2 IF MATURITY MAY BE EXTENDED -- (a) The
Maturity Date will be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to extend the Maturity
Date beyond the Scheduled Maturity Date in accordance with
Section 2.2(b), the Extended Maturity Date;
4<PAGE>
(b) the Company may at any time before the day which
is 90 days before the Scheduled Maturity Date, elect to extend
the Maturity Date only once to the Extended Maturity Date provid-
ed that the following conditions in this Section 2.2(b) are
satisfied both at the date the Company gives notice in accordance
with Section 2.2(c) of its election to extend the Maturity Date
and at the Scheduled Maturity Date:
(i) the Company is not in bankruptcy or otherwise
insolvent;
(ii) the Company is not in default on any Securi-
ties issued to any NorAm Trust or any trustee of such NorAm
Trust in connection with the issuance of Trust Securities by
such NorAm Trust;
(iii) the Company has made timely payments on the
Convertible Debentures for the immediately preceding six
quarters without deferrals;
(iv) the Trust is not in arrears on payments of
Distributions on the Trust Securities issued by it; and
(v) the Convertible Debentures are rated Invest-
ment grade or the equivalent by Standard & Poor's Corpora-
tion, Moody's Investors Service, Inc., Fitch Investor Ser-
vices, Duff & Phelps Credit Rating Company or any other
nationally recognized statistical rating organization; and
(c) if the Company elects to extend the Maturity Date
in accordance with Section 2.2(b), the Company shall give notice
to registered holders of the Convertible Debentures, the Institu-
tional Trustee and the Trust of the extension of the Maturity
Date and the Extended Maturity Date at least 90 days before the
Scheduled Maturity Date.]
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Convertible
Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Conve-
rtible Debentures issued in certificated form will be payable,
the transfer of such Convertible Debentures will be registrable
and such Convertible Debentures will be exchangeable for Conve-
rtible 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
5<PAGE>
mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the
Holder of any Convertible Debentures is the Institutional Trust-
ee, the payment of the principal of and interest (including
Compounded Interest and Additional Interest, if any) on such
Convertible 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 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Convertible 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 Convertible Debentures (a "Global Deben-
ture"), 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 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 Convertible Debentures issued as a Global
Debenture will be made to the Depositary; and
(ii) if any Convertible Preferred Securities are
held in non book-entry certificated form, the Convertible
Debentures in certificated form may be presented to the
Trustee by the Institutional Trustee and any Convertible
Preferred Security Certificate which represents Convertible
Preferred Securities other than Convertible Preferred Secu-
rities held by the Clearing Agency or its nominee ("Non
Book-Entry Convertible Preferred Securities") will be deemed
to represent beneficial interests in Convertible Debentures
presented to the Trustee by the Institutional Trustee having
an aggregate principal amount equal to the aggregate liqui-
dation amount of the Non Book-Entry Convertible Preferred
Securities until such Convertible Preferred Security Certif-
icates are presented to the Security Registrar for transfer
or reissuance at which time such Convertible Preferred
Security Certificates will be cancelled and a Debenture,
registered in the name of the holder of the Convertible
Preferred Security Certificate or the transferee of the
6<PAGE>
holder of such Convertible Preferred Security Certificate,
as the case may be, with an aggregate principal amount equal
to the aggregate liquidation amount of the Convertible
Preferred Security Certificate cancelled, will be executed
by the Company and delivered to the Trustee for authentica-
tion and delivery in accordance with the Indenture and this
First Supplemental Indenture. On issue of such Convertible
Debentures, Convertible Debentures with an equivalent aggre-
gate principal amount that were presented by the Institu-
tional Trustee to the Trustee will be deemed to have been
cancelled.
(b) 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 [Two] of the Inden-
ture, the Trustee, upon written notice from the Company, will
authenticate and deliver the Convertible 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 Conve-
rtible Debentures shall no longer be represented by a Global
Debenture. In such event the Company will execute, and subject
to Section [2.05] of the Indenture, the Trustee, upon receipt of
an Officers Certificate evidencing such determination by the
Company, will authenticate and deliver the Convertible 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 Convertible Debentures in definitive registered form without
coupons, in authorized denominations, the Global Debenture shall
be cancelled by the Trustee. Such Convertible Debentures in
definitive registered form issued in exchange for the Global
Debenture shall be registered in such names and in such autho-
rized denominations as the Depositary, pursuant to instructions
7<PAGE>
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 Convertible Debenture will bear interest at
the rate of ___% 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, compound-
ed quarterly, payable (subject to the provisions of Article Four)
quarterly in arrears on [March 31, June 30, September 30 and
December 31] of each year (each, an "Interest Payment Date," com-
mencing on __________, 1995), to the Person in whose name such
Convertible Debenture or any predecessor Convertible Debenture is
registered, at the close of business on the regular record date
for such interest installment, which, in respect of (i) Convert-
ible Debentures of which the Institutional Trustee is the Holder
and the Convertible 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 Convertible
Debentures are held by the Institutional Trustee and the Convert-
ible Preferred Securities are no longer in book-entry only form
or (ii) the Convertible 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 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 30-day
period. In the event that any date on which interest is payable
on the Convertible Debentures is not a Business Day, then payment
of interest payable on such date will be made on the next suc-
ceeding 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.
8<PAGE>
(c) If, at any time while the Institutional Trustee is
the Holder of any Convertible 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 Convertible
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, assess-
ments or other government charges been imposed.
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. Special 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 Conve-
rtible Debentures to redeem the Convertible 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 avail-
able 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,
9<PAGE>
provided, further, that the Company shall have no right to redeem
the Convertible Debentures while the Trust is pursuing any Minis-
terial 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 [III] of the Indenture, except as
otherwise may be specified in this First Supplemental Indenture,
the Company shall have the right to redeem the Convertible
Debentures, in whole or in part, from time to time, on or after
_________, 2000, 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 Convertible Debentures, at the
Optional Redemption Price. If the Convertible Debentures are
only partially redeemed pursuant to this Section 3.2, the Conve-
rtible 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 Convertible Debentures are registered as a
Global Debenture, the Depositary shall determine, in accordance
with its procedures, the principal amount of such Convertible
Debentures held by each Holder of Debenture 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 Redemp-
tion Price by 10:00 a.m., New York time, on the date such Option-
al Redemption Price is to be paid.
(b) If a partial redemption of the Convertible Deben-
tures would result in the delisting of the Convertible Preferred
Securities issued by the Trust from any national securities
exchange or other organization on which the Convertible Preferred
Securities are then listed, the Company shall not be permitted to
effect such partial redemption and may only redeem the Convert-
ible Debentures in whole.
10<PAGE>
SECTION 3.3. No Sinking Fund.
The Convertible 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 Convertible Debentures, to
defer payments of interest by extending the interest payment
period of such Convertible 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 Convertible Deben-
tures, including any Additional Interest and Compounded Interest
(together, "Deferred Interest") that shall be payable to the
Holders of the Convertible Debentures in whose names the Conve-
rtible 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 Convertible Debentures. Upon the termina-
tion 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.
SECTION 4.2. Notice of Extension.
11<PAGE>
(a) If the Institutional Trustee is the only regis-
tered Holder of the Convertible Debentures at the time the
Company selects an Extended Interest Payment Period, the Company
shall give written notice to the Regular Trustees, the Institu-
tional 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 Convertible 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 Convertible Debentures at the time the Company
selects an Extended Interest Payment Period, the Company shall
give the Holders of the Convertible 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
Convertible 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 acquisi-
tions of shares of its common stock in connection with the satis-
faction by the Company of its obligations under any employee
benefit plans or the satisfaction by the Company of its obliga-
tions 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 conver-
sion of one class or series of its capital stock for another
12<PAGE>
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 and (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 Convertible
Debentures; provided, however, the Company may declare and pay a
stock dividend where the dividend stock is the same stock as that
on which the dividend is being paid.
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of
the Convertible 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
Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offer-
ing, sale and issuance of the Convertible Debentures, including
commissions to the underwriters payable pursuant to the Under-
writing Agreement and the Pricing Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions
of Section [7.06] of the Indenture;
(b) pay all costs and expenses of the Trust (includ-
ing, but not limited to, costs and expenses relating to the
organization of the Trust, the fees and expenses of the Institu-
tional Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limita-
tion, 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
13<PAGE>
(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 6.10, 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 Insti-
tutional 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.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. Listing on an Exchange.
If the Convertible Debentures are to be issued as a
Global Debenture in connection with the distribution of the
Convertible Debentures to the holders of the Convertible Pre-
ferred Securities issued by the Trust upon a Dissolution Event,
the Company will use its best efforts to list such Convertible
Debentures on the New York Stock Exchange, Inc. or on such other
exchange as the Convertible Preferred Securities are then listed.
ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. Conversion Rights.
Subject to and upon compliance with the provisions of
this Article, the Convertible Debentures are convertible, at the
option of the Holder, at any time on or before redemption as
provided below or the close of business at their [Scheduled
Maturity] [Maturity Date], into fully paid and nonassessable
shares of Common Stock of the Company at an initial conversion
rate of _______ shares of Common Stock for each $__ in aggregate
principal amount of Convertible Debentures (equal to a conversion
14<PAGE>
price of $_____ per share of Common Stock), subject to adjustment
as described in this Article Eight. A Holder of Convertible
Debentures may convert any portion of the principal amount of the
Convertible Debentures into that number of fully paid and nonas-
sessable shares of Common Stock (calculated as to each conversion
to the nearest 1/100th of a share) obtained by dividing the
principal amount of the Convertible Debentures to be converted by
such conversion price. In case a Convertible Debenture or
portion thereof is called for redemption, such conversion right
in respect of the Convertible Debenture or portion so called
shall expire at the close of business on the corresponding
Redemption Date, unless the Company defaults in making the
payment due upon redemption.
SECTION 7.2. Conversion Procedures.
(i) In order to convert all or a portion of the
Convertible Debentures, the Holder thereof shall deliver to the
Conversion Agent an irrevocable Notice of Conversion setting
forth the principal amount of Convertible Debentures to be con-
verted, together with the name or names, if other than the
Holder, in which the shares of Common Stock should be issued upon
conversion and, if such Convertible Debentures are definitive
Convertible Debentures, surrender to the Conversion Agent the
Convertible Debentures to be converted, duly endorsed or assigned
to the Company or in blank. In addition, a holder of Convertible
Preferred Securities may exercise its right under the Declaration
to convert such Convertible Preferred Securities into Common
Stock by delivering to the Conversion Agent an irrevocable Notice
of Conversion setting forth the information called for by the
preceding sentence and directing the Conversion Agent (i) to
exchange such Convertible Preferred Security for a portion of the
Convertible Debentures held by the Trust (at an exchange rate of
$__ principal amount of Convertible Debentures for each Convert-
ible Preferred Security) and (ii) to immediately convert such
Convertible Debentures, on behalf of such holder, into Common
Stock of the Company pursuant to this Article Eight and, if such
Convertible Preferred Securities are in definitive form, surren-
dering such Convertible Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Convertible
Preferred Securities are outstanding, the Trust shall not convert
any Convertible Debentures except pursuant to a Notice of Conver-
sion delivered to the Conversion Agent by a holder of Convertible
Preferred Securities.
If a Notice of Conversion is delivered on or after the
Regular Record Date and prior to the subsequent Interest Payment
15<PAGE>
Date, the Holder will be entitled to receive the interest payable
on the subsequent Interest Payment Date on the portion of Conver-
tible Debentures to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of
any Convertible Debenture which is converted, interest whose
[Scheduled Maturity] [Maturity Date] is after the date of conver-
sion of such Convertible Debenture shall not be payable, and the
Company shall not make nor be required to make any other payment,
adjustment or allowance with respect to accrued but unpaid
interest on the Convertible Debentures being converted, which
shall be deemed to be paid in full. Each conversion shall be
deemed to have been effected immediately prior to the close of
business on the day on which the Notice of Conversion was re-
ceived (the "Conversion Date") by the Conversion Agent from the
Holder or from a holder of the Convertible Preferred Securities
effecting a conversion thereof pursuant to its conversion rights
under the Declaration, as the case may be. The Person or Persons
entitled to receive the Common Stock issuable upon such conver-
sion shall be treated for all purposes as the record holder or
holders of such Common Stock as of the Conversion Date. As
promptly as practicable on or after the Conversion Date, the
Company shall issue and deliver at the office of the Conversion
Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full
shares of Common Stock issuable upon such conversion, together
with the cash payment, if any, in lieu of any fraction of any
share to the Person or Persons entitled to receive the same. The
Conversion Agent shall deliver such certificate or certificates
to such Person or Persons.
(ii) The Company's delivery upon conversion of the
fixed number of shares of Common Stock into which the Convertible
Debentures are convertible (together with the cash payment, if
any, in lieu of fractional shares) shall be deemed to satisfy the
Company's obligation to pay the principal amount at Maturity of
the portion of Convertible Debentures so converted and any unpaid
interest (including Compounded Interest and Additional Interest)
accrued on such Convertible Debentures at the time of such
conversion.
(iii) No fractional shares of Common Stock will be
issued as a result of conversion, but in lieu thereof, the
Company shall pay to the Conversion Agent a cash adjustment in an
amount equal to the same fraction of the current market price of
such fractional interest on the date on which the Convertible
Debentures or Convertible Preferred Securities, as the case may
16<PAGE>
be, were duly surrendered to the Conversion Agent for conversion,
or, if such day is not a Trading Day, on the next Trading Day,
and the Conversion Agent in turn will make such payment, if any,
to the Holder of the Convertible Debentures or the holder of the
Convertible Preferred Securities so converted.
(iv) In the event of the conversion of any Convertible
Debenture in part only, a new Convertible Debenture or Convert-
ible Debentures for the unconverted portion thereof will be
issued in the name of the Holder thereof upon the cancellation
thereof in accordance with [Section ___ of the Indenture].
(v) In effecting the conversion transactions described
in this Section, the Conversion Agent is acting as agent of the
holders of Convertible Preferred Securities (in the exchange of
Convertible Preferred Securities for Convertible Debentures) and
as agent of the Holders of Convertible Debentures (in the conver-
sion of Convertible Debentures into Common Stock), as the case
may be, directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Convertible
Debentures held by the Trust from time to time for Convertible
Preferred Securities in connection with the conversion of such
Convertible Preferred Securities in accordance with this Article
Eight and (ii) to convert all or a portion of the Convertible
Debentures into Common Stock and thereupon to deliver such shares
of Common Stock in accordance with the provisions of this Article
Eight and to deliver to the Trust a new Convertible Debenture or
Convertible Debentures for any resulting unconverted principal
amount.
SECTION 7.3. Conversion Price Adjustments.
The Conversion Price shall be adjusted from time to
time as follows:
(a) In case the Company shall, while any of the
Convertible Debentures are outstanding, (i) pay a dividend or
make a distribution with respect to its Common Stock in shares of
Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into
a smaller number of shares or (iv) issue by reclassification of
its shares of Common Stock any shares of capital stock of the
Company, the conversion privilege and the Conversion Price for
each series of Convertible Debentures in effect immediately prior
to such action shall be adjusted so that the Holder of any
Convertible Debenture thereafter surrendered for conversion shall
be entitled to receive the number of shares of capital stock of
17<PAGE>
the Company which he would have owned immediately following such
action had such Convertible Debenture been converted immediately
prior thereto. An adjustment made pursuant to this subsection
(a) shall become effective immediately after the record date in
the case of a dividend or other distribution and shall become
effective immediately after the effective date in case of a
subdivision, combination or reclassification (or immediately
after the record date if a record date shall have been estab-
lished for such event). If, as a result of an adjustment made
pursuant to this subsection (a), the Holder of any Convertible
Debenture thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes or series of
capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a
Board Resolution file with the Trustee) shall determine the
allocation of the adjusted Conversion Price for each series of
Convertible Debentures between or among shares of such classes or
series of capital stock.
(b) In case the Company shall, while any of the
Convertible Debentures are outstanding, issue rights or warrants
to all holders of its Common Stock entitling them (for a period
expiring within 45 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock at a price per
share less than the current market price per share of Common
Stock (as determined pursuant to subsection (f) below) on the
record date mentioned below, the Conversion Price for the Con-
vertible Debentures shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of issuance of such rights
or warrants by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares
which the aggregate offering price of the total number of shares
so offered [for subscription or purchase] would purchase at such
current market price, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase.
Such adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such rights or warrants. To the extent that shares of
Common Stock are not so delivered after the expiration of such
rights or warrants, the Conversion Price shall be readjusted to
the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive
such rights or warrants had not been fixed. For the purposes of
18<PAGE>
this subsection, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company. The Company shall not issue any rights or warrants in
respect of shares of Common Stock held in the treasury of the
Company. In case any rights or warrants referred to in this
subsection in respect of which an adjustment shall have been made
shall expire unexercised within 45 days after the same shall have
been distributed or issued by the Company, the Conversion Price
shall be readjusted at the time of such expiration to the Conver-
sion Price that would have been in effect if no adjustment had
been made on account of the distribution or issuance of such
expired rights or warrants.
(c) Subject to the last sentence of this subparagraph,
in case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness,
shares of any class or series of capital stock, cash or assets
(including securities, but excluding any rights or warrants
referred to in subparagraph (b), any dividend or distribution
paid exclusively in cash and any dividend or distribution re-
ferred to in subparagraph (a) of this Section 7.3), the conver-
sion price shall be reduced so that the same shall equal the
price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price
reduction contemplated by this subparagraph (c) by a fraction of
which the numerator shall be the current market price per share
(determined as provided in subparagraph (f)) of the Common Stock
on the date fixed for the payment of such distribution (the
"Reference Date") less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of
Directors), on the Reference Date, of the portion of the evidenc-
es of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the
Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following the Refer-
ence Date. In the event that such dividend or distribution is
not so paid or made, the conversion price shall again be adjusted
to be the conversion price which would then be in effect if such
dividend or distribution had not occurred. If the Board of
Directors determines the fair market value of any distribution
for purposes of this subparagraph (c) by reference to the actual
or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market
price per share of Common Stock (determined as provided in
19<PAGE>
subparagraph (f)). For purposes of this subparagraph (c), any
dividend or distribution that includes shares of Common Stock or
rights or warrants to subscribe for or purchase shares of Common
Stock shall be deemed instead to be (1) a dividend or distri-
bution of the evidences of indebtedness, shares of capital stock,
cash or assets other than such shares of Common Stock or such
rights or warrants (making any conversion price reduction re-
quired by this subparagraph (c)) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such
rights or warrants (making any further conversion price reduction
required by subparagraph (a) or (b)), except (A) the Reference
Date of such dividend or distribution as defined in this subpara-
graph shall be substituted as (a) "the record date in the case of
a dividend or other distribution," and (b) "the record date for
the determination of stockholders entitled to receive such rights
or warrants" and (c) "the date fixed for such determination"
within the meaning of subparagraphs (a) and (b) and (B) any
shares of Common Stock included in such dividend or distribution
shall not be deemed outstanding for purposes of computing any
adjustment of the conversion price in subparagraph (a).
(d) In case the Company shall pay or make a dividend
or other distribution on its Common Stock exclusively in cash
(excluding all regular cash dividend if the annualized amount
thereof per share of Common Stock does not exceed 15% of the
current market price per share determined as provided in subpara-
graph (f)) of the Common Stock on the Trading Day next preceding
the date of declaration of such dividend, the conversion price
shall be reduced so that the same shall equal the price deter-
mined by multiplying the conversion price in effect immediately
prior to the effectiveness of the conversion price reduction
contemplated by this subparagraph by a fraction of which the
numerator shall be the current market price per share (determined
as provided in subparagraph (f)) of the Common Stock on the date
fixed for the payment of such distribution less the amount of
cash so distributed and not excluded as provided applicable to
one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such reduc-
tion to become effective immediately prior to the opening of
business on the day following the date fixed for the payment of
such distribution; provided, however, that in the event the
portion of the cash so distributed applicable to one share of
Common Stock is equal to or greater than the current market price
per share (as defined in subparagraph (f)) of the Common Stock on
the record date mentioned above, in lieu of the foregoing adjust-
ment, adequate provision shall be made so that each Holder of
shares of Convertible Debentures shall have the right to receive
20<PAGE>
upon conversion the amount of cash such Holder would have re-
ceived had such Holder converted each share of the Convertible
Debentures immediately prior to the record date for the distribu-
tion of the cash. In the event that such dividend or distribu-
tion is not so paid or made, the conversion price shall again be
adjusted to be the conversion price which would then be in effect
if such record date had not been fixed.
(e) In case a tender or exchange offer (other than an
odd-lot offer) made by the Company or any Subsidiary of the
Company for all or any portion of the Company's Common Stock
shall expire and such tender or exchange offer shall involve the
payment by the Company or such Subsidiary of consideration per
share of Common Stock having a fair market value (as determined
in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended) that exceeds 110% of the current
market price per share (determined as provided in subparagraph
(f)) of the Common Stock on the Trading Day next succeeding the
Expiration Time, the conversion price shall be reduced so that
the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the effectiveness
of the conversion price reduction contemplated by this subpara-
graph (e) by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied
by the current market price per share (determined as provided in
subparagraph (f)) of the Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the
sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as
the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at
the Expiration Time and the current market price per share (de-
termined as provided in subparagraph (f)) of the Common Stock on
the Trading Day next succeeding the Expiration Time, such reduc-
tion to become effective immediately prior to the opening of
business on the day following the Expiration Time.
(f) For the purpose of any computation under subpara-
graphs (b), (c), (d) or (e), the current market price per share
21<PAGE>
of Common Stock on any date in question shall be deemed to be the
average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 20
Trading Days before, and ending not later than, the earlier of
the day in question and, if applicable, the day before the "ex"
date with respect to the issuance or distribution requiring such
computation; provided, however, that if another event occurs that
would require an adjustment pursuant to subparagraph (a) through
(e), inclusive, the Board of Directors may make such adjustments
to the Closing Prices during such five Trading Day period as it
deems appropriate to effectuate the intent of the adjustments in
this Section 7.3, in which case any such determination by the
Board of Directors shall be set forth in a Board Resolution and
shall be conclusive. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or distri-
bution, means the first date on which the Common Stock trades
regular way on the New York Stock Exchange or on such successor
securities exchange as the Common Stock may be listed or in the
relevant market from which the Closing Prices were obtained
without the right to receive such issuance or distribution, and
(2) when used with respect to any tender or exchange offer means
the first date on which the Common Stock trades regular way on
such securities exchange or in such market after the Expiration
Time of such offer.
(g) The Company may make such reductions in the con-
version price, in addition to those required by subparagraphs (a)
through (e), as it considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock
(or rights to acquire stock) or from any event treated as such
for income tax purposes. The Company from time to time may
reduce the conversion price by any amount for any period of time
if the period is at least twenty (20) days, the reduction is
irrevocable during the period, and the Board of Directors of the
Company shall have made a determination that such reduction would
be in the best interest of the Company, which determination shall
be conclusive. Whenever the conversion price is reduced pursuant
to the preceding sentence, the Company shall mail to holders of
record of the Convertible Debentures a notice of the reduction at
least fifteen (15) days prior to the date the reduced conversion
price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.
(h) No adjustment in the conversion price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the conversion price; provided,
22<PAGE>
however, that any adjustments which by reason of this subpara-
graph are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjust-
ment shall be required.
(i) If any action would require adjustment of the
conversion price pursuant to more than one of the provisions
described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest
absolute value to the Holder of the Convertible Debentures.
SECTION 7.4. Reclassification, Consolidation, Merger or Sale of
Assets.
In the event that the Company shall be a party to any
transaction (including without limitation (a) any recapitaliza-
tion or reclassification of the Common Stock (other than a change
in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combina-
tion of the Common Stock), (b) any consolidation of the Company
with, or merger of the Company into, any other Person, any merger
of another Person into the Company (other than a merger which
does not result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Compa-
ny), (c) any sale or transfer of all or substantially all of the
assets of the Company or (d) any compulsory share exchange)
pursuant to which the Common Stock is converted into the right to
receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction
whereby the Holder of each Convertible Debenture then outstanding
shall have the right thereafter to convert such Convertible
Debenture only into the kind and amount of securities, cash and
other property receivable upon consummation of such transaction
by a holder of the number of shares of Common Stock of the
Company into which such Convertible Debenture could have been
converted immediately prior to such transaction.
The Company or the Person formed by such consolidation
or resulting from such merger or which acquired such assets or
which acquires the Company's shares, as the case may be, shall
make provision in its certificate or articles of incorporation or
other constituent document to establish such right. Such certif-
icate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the
effective date of such certificate or articles of incorporation
or other constituent document, shall be as nearly equivalent as
23<PAGE>
may be practicable to the adjustments provided for in this
Article Seven. The above provisions shall similarly apply to
successive transactions of the foregoing type.
SECTION 7.5. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein
provided:
(i) the Company shall compute the adjusted conversion
price and shall prepare a certificate signed by the Chief Finan-
cial Officer or the Treasurer of the Company setting forth the
adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate
shall forthwith be filed with the Trustee and the transfer agent
for the Convertible Preferred Securities and the Convertible
Debentures; and
(ii) a notice stating the conversion price has been
adjusted and setting forth the adjusted conversion price shall as
soon as practicable be mailed by the Company to all record
holders of Convertible Preferred Securities and the Convertible
Debentures at their last addresses as they appear upon the stock
transfer books of the Company and the Trust.
SECTION 7.6. Prior Notice of Certain Events.
In case:
(a) the Company shall (1) declare any dividend (or any
other distribution) on its Common Stock, other than (A) a divi-
dend payable in shares of Common Stock or (B) a dividend payable
in cash that would not require an adjustment pursuant to Section
7.3(c) or (d) or (2) authorize a tender or exchange offer that
would require an adjustment pursuant to Section 7.3(e);
(b) the Company shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or series or of any
other rights or warrants;
(c) of any reclassification of Common Stock (other
than a subdivision or combination of the outstanding Common
Stock, or a change in par value, or from par value to no par
value, or from no par value to par value), or of any consolida-
tion or merger to which the Company is a party and for which
approval of any stockholders of the Company shall be required, or
24<PAGE>
of the sale or transfer of all or substantially all of the assets
of the Company or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or other
property; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall (a) if any Convertible Preferred Securi-
ties are outstanding, cause to be filed with the transfer agent
for the Convertible Preferred Securities, and shall cause to be
mailed to the holders of record of the Convertible Preferred
Securities, at their last addresses as they shall appear upon the
stock transfer books the Trust or (b) shall cause to be mailed to
all Holders at their last addresses as they shall appear in the
Security Register, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating
(x) the date on which a record (if any) is to be taken for the
purpose of such dividend, distribution, rights or warrants or, if
a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribu-
tion, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, trans-
fer, share exchange, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolida-
tion, merger, sale, transfer, share exchange, dissolution, liqui-
dation or winding up (but no failure to mail such notice or any
defect therein or in the mailing thereof shall affect the validi-
ty of the corporate action required to be specified in such
notice).
SECTION 7.7. [Reserved]
SECTION 7.8. Dividend or Interest Reinvestment Plans.
Notwithstanding the foregoing provisions, the issuance
of any shares of Common Stock pursuant to any plan providing for
the reinvestment of dividends or interest payable on securities
of the Company and the investment of additional optional amounts
in shares of Common Stock under any such plan, and the issuance
of any shares of Common Stock or options or rights to purchase
such shares pursuant to any employee benefit plan or program of
the Company or pursuant to any option, warrant, right or exercis-
able, exchangeable or convertible security outstanding as of the
25<PAGE>
date the Convertible Debentures were first issued, shall not be
deemed to constitute an issuance of Common Stock or exercisable,
exchangeable or convertible securities by the Company to which
any of the adjustment provisions described above applies. There
shall also be no adjustment of the conversion price in case of
the issuance of any stock (or securities convertible into or ex-
changeable for stock) of the Company except as specifically de-
scribed in this Article Seven.
SECTION 7.9. Certain Additional Rights.
In case the Company shall, by dividend or otherwise,
declare or make a distribution on its Common Stock referred to in
Section 7.3 (c) or 7.3(d) (including, without limitation, divi-
dends or distributions referred to in the last sentence of
Section 7.3(e)), the Holder of the Convertible Debentures, upon
the conversion thereof subsequent to the close of business on the
date fixed for the determination of stockholders entitled to re-
ceive such distribution and prior to the effectiveness of the
conversion price adjustment in respect of such distribution,
shall also be entitled to receive for each share of Common Stock
into which the Convertible Debentures are converted, the portion
of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so dis-
tributed applicable to one share of Common Stock; provided,
however, that, at the election of the Company (whose election
shall be evidenced by a resolution of the Board of Directors)
with respect to all Holders so converting, the Company may, in
lieu of distributing to such Holder any portion of such distribu-
tion not consisting of cash or securities of the Company, pay
such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a reso-
lution of the Board of Directors). If any conversion of Convert-
ible Debentures described in the immediately preceding sentence
occurs prior to the payment date for a distribution to holders of
Common Stock which the Holder of Convertible Debentures so con-
verted is entitled to receive in accordance with the immediately
preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distrib-
ute to such Holder a due bill for the shares of Common Stock,
rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets to which such Holder is so entitled, pro-
vided, that such due bill (i) meets any applicable requirements
of the principal national securities exchange or other market on
which the Common Stock is then traded and (ii) requires payment
or delivery of such shares of Common Stock, rights, warrants,
26<PAGE>
evidences of indebtedness, shares of capital stock, cash or
assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
SECTION 7.10. Trustee Not Responsible for Determining Conversion
Price or Adjustments.
Neither the Trustee nor any Conversion Agent shall at
any time be under any duty or responsibility to any Holder of any
Convertible Debenture to determine whether any facts exist which
may require any adjustment of the conversion price, or with re-
spect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the
same. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind of
account) of any shares of Common Stock or of any securities or
property, which may at any time be issued or delivered upon the
conversion of any Convertible Debenture; and neither the Trustee
nor any Conversion Agent makes any representation with respect
thereto. Neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to make any cash pay-
ment or to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property upon the
surrender of any Convertible Debenture for the purpose of conver-
sion.
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. Form of Convertible Debenture.
The Convertible Debentures and the Trustee's Certifi-
cate of Authentication to be endorsed thereon are to be substan-
tially in the following forms:
[(FORM OF FACE OF Convertible Debenture)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT
THE FOLLOWING - - This Debenture is a Global Debenture within the
meaning of the Indenture hereinafter referred to and is regis-
tered in the name of a Depositary or a nominee of a Depositary.
This Debenture is exchangeable for Convertible Debentures regis-
tered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Inden-
ture, and no transfer of this Debenture (other than a transfer of
this Debenture as a whole by the Depositary to a nominee of the
27<PAGE>
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 re-
quested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANS-
FER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PER-
SON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.]
No. _______________
NORAM ENERGY CORP.
___% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
DUE 20[25]
m Energy Corp., a Delaware 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 _________, ____, and
to pay interest on said principal sum from ____________, 1995, or
from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein)
in arrears on [March 31, June 30, September 30 and December 31]
of each year commencing ___________, 1995, at the rate of ___%
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 in-
terest is enforceable under applicable law) on any overdue in-
stallment of interest at the same rate per annum compounded
quarterly. The amount of interest payable on any Interest Pay-
ment 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 Convertible Debenture is not a Busi-
ness Day, then payment of interest payable on such date will be
made on the next succeeding day that is a Business Day (and with-
28<PAGE>
out 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 Inter-
est Payment Date will, as provided in the Indenture, be paid to
the person in whose name this Convertible 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 busi-
ness on the business day next preceding such Interest Payment
Date unless otherwise provided in the Indenture] [IF PURSUANT
TO THE PROVISIONS OF THE INDENTURE THE CONVERTIBLE DEBENTURES ARE
NO LONGER REPRESENTED BY A GLOBAL DEBENTURE -- which shall be the
close of business on the ____ business 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 Convertible Deben-
ture (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 Convertible Debentures not less than 10 days prior to such
special record date, or may be paid at any time in any other law-
ful manner not inconsistent with the requirements of any secu-
rities exchange on which the Convertible 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 Convertible Deben-
ture 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 pay-
ment 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 Convertible Debenture is the Insti-
tutional Trustee, the payment of the principal of (and premium,
if any) and interest on this Convertible Debenture will be made
at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Convertible Deben-
ture is, to the extent provided in the Indenture, subordinate and
junior in right of payment to the prior payment in full of all
29<PAGE>
Senior Indebtedness, and this Convertible Debenture is issued
subject to the provisions of the Indenture with respect thereto.
Each Holder of this Convertible Debenture, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) autho-
rizes 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 purpos-
es. Each Holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provi-
sions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter in-
curred, and waives reliance by each such holder upon said provi-
sions.
This Convertible 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 Convertible Debenture are con-
tinued 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 instru-
ment to be executed.
Dated ___________________
NORAM ENERGY CORP.
By: _____________________________
Name:
Title
Attest:
By: ____________________
Name:
Title:
30<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series
of Convertible Debentures described in the within-mentioned
Indenture.
[ ]
or as Authentication Agent
By__________________ By_______________________
Authorized Signatory Authorized Signatory
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized
series of Convertible Debentures of the Company (herein sometimes
referred to as the "Convertible Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under
and pursuant to an Indenture dated as of _______, 1995, duly exe-
cuted and delivered between the Company and _________________, as
Trustee (the "Trustee"), as supplemented by the First Supplement-
ed Indenture dated as of _______, 1995, between the Company and
the Trustee (the Indenture as so supplemented, the "Indenture"),
to which Indenture and all indentures supplemental thereto refer-
ence 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 Convertible Deben-
tures. By the terms of the Indenture, the Convertible Debentures
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 Convertible Debentures is limited
in aggregate principal amount as specified in said First Supple-
mental Indenture.
Because of the occurrence and continuation of a Tax
Event, in certain circumstances, this Convertible Debenture may
become due and payable at the principal amount together with any
interest accrued thereon (the "Redemption Price"). The Redemp-
tion 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 Compa-
ny determines. The Company shall have the right to redeem this
Convertible Debenture at the option of the Company, without
premium or penalty, in whole or in part at any time on or after
________, 2000 (an "Optional Redemption"), or at any time in cer-
tain circumstances upon the occurrence of a Tax Event, at a
redemption price equal to 100% of the principal amount plus any
accrued but unpaid interest, to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this
31<PAGE>
paragraph will be made upon not less than 30 days nor more than
60 days notice, at the Optional Redemption Price. If the Con-
vertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures
will be redeemed pro rata or by lot or by any other method util-
ized by the Trustee; provided that if, at the time of redemption,
the Convertible Debentures are registered as a Global Debenture,
the Depositary shall determine the principal amount of such Con-
vertible Debentures held by each Debentureholder to be redeemed
in accordance with its procedures.
In the event of redemption of this Convertible Deben-
ture in part only, a new Convertible Debenture or Convertible
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 Inden-
ture, shall have occurred and be continuing, the principal of all
of the Convertible Debentures may be declared, and upon such dec-
laration 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 Compa-
ny and the Trustee, with the consent of the Holders of not less
than a majority in aggregate principal amount of the Convertible
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 Convertible Debentures; provided, however,
that no such supplemental indenture shall (i) extend the fixed
maturity of any Convertible Debentures of any series, or 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 Convertible Debenture so affected, or (ii) reduce
the aforesaid percentage of Convertible Debentures, the Holders
of which are required to consent to any such supplemental inden-
ture, without the consent of the Holders of each Convertible
Debenture then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Convertible Debentures of any
series at the time outstanding affected thereby, on behalf of all
of the Holders of the Convertible Debentures of such series, to
waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium,
if any, or interest on any of the Convertible Debentures of such
series. Any such consent or waiver by the registered Holder of
32<PAGE>
this Convertible 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 Convertible Debenture
and of any Convertible 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 Convertible Debenture.
No reference herein to the Indenture and no provision
of this Convertible 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 Convertible Debenture at the time and place and
at the rate and in the money herein prescribed.
The Company shall have the right at any time during the
term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible 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 interest thereon
at the rate specified for the Convertible Debentures to the
extent that payment of such interest is enforceable under appli-
cable law). Before the termination of any such Extended Interest
Payment Period, the Company may further extend such Extended In-
terest Payment Period, provided that such Extended Interest
Payment Period together with all such further extensions thereof
shall not exceed 20 consecutive quarters. At the termination of
any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then
due, the Company may commence a new Extended Interest Payment
Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Convertible Debenture is
transferable by the registered Holder hereof on the Security Reg-
ister of the Company, upon surrender of this Convertible De-
benture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a
written instrument or instruments of transfer in form satisfac-
tory to the Company or the Trustee duly executed by the regis-
tered Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Convertible Debentures of autho-
rized 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 trans-
fer, 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 Convertible Debenture, the Company, the Trustee, any
33<PAGE>
paying agent and the Security Registrar may deem and treat the
registered holder hereof as the absolute owner hereof (whether or
not this Convertible Debenture shall be overdue and notwithstand-
ing 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 con-
trary.
No recourse shall be had for the payment of the princi-
pal of or the interest on this Convertible Debenture, or for any
claim based hereon, or otherwise in respect hereof, or based on
or in respect of the Indenture, against any incorporator, stock-
holder, 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.
The Holder of any Convertible Debenture has the right,
exercisable at any time prior to the close of business (New York
time) on the date of the Convertible Debenture's maturity, to
convert the principal amount thereof (or any portion thereof that
is an integral multiple of $__) into shares of Common Stock at
the initial conversion price _______ shares of Common Stock for
each Convertible Debenture (equivalent to a conversion price of
$______ per share of Common Stock of the Company), subject to ad-
justment under certain circumstances, except that if a Convert-
ible Debenture is called for redemption, the conversion right
will terminate at the close of business on the Redemption Date.
To convert a Convertible Debenture, a Holder must (1)
complete and sign a conversion notice substantially in the form
attached hereto, (2) surrender the Convertible Debenture to a
Conversion Agent, (3) furnish appropriate endorsements or trans-
fer documents if required by the Conversion Agent and (4) pay any
transfer or similar tax, if required. Upon conversion, no
adjustment or payment will be made for interest or dividends, but
if any Holder surrenders a Convertible Debenture for conversion
after the close of business on the Regular Record Date for the
payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding
such conversion, the interest payable on such Interest Payment
Date will be paid to the registered Holder of such Convertible
Debenture on such Regular Record Date. In such event, such Con-
vertible Debenture, when surrendered for conversion, need not be
accompanied by payment of an amount equal to the interest payable
on such Interest Payment Date on the portion so converted. The
34<PAGE>
number of shares issuable upon conversion of a Convertible De-
benture is determined by dividing the principal amount of the
Convertible Debenture converted by the conversion price in effect
on the Conversion Date. No fractional shares will be issued upon
conversion but a cash adjustment will be made for any fractional
interest. The outstanding principal amount of any Security shall
be reduced by the portion of the principal amount thereof con-
verted into shares of Common Stock.
[The Convertible Debentures of this series are issuable
only in registered form without coupons in denominations of $__
and any integral multiple thereof.] [This Global Debenture is
exchangeable for Convertible Debentures in definitive form only
under certain limited circumstances set forth in the Indenture.
Convertible 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,
Convertible Debentures of this series [so issued] are exchange-
able for a like aggregate principal amount of Convertible Deben-
tures of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
All terms used in this Convertible Debenture that are
defined in the Indenture shall have the meanings assigned to them
in the Indenture.
35<PAGE>
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: NorAm Energy Corp.
The undersigned owner of this Convertible Debenture
hereby irrevocably exercises the option to convert this Convert-
ible Debenture, or the portion below designated, into Common
Stock of NORAM ENERGY CORP. in accordance with the terms of the
Indenture referred to in this Convertible Debenture, and directs
that the shares issuable and deliverable upon conversion, togeth-
er with any check in payment for fractional shares, be issued in
the name of and delivered to the undersigned, unless a different
name has been indicated in the assignment below. If shares are
to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect
thereto.
Date: ____________, ____
in whole __
Portions of Security to be convert-
ed ($25 or integral multiples-thereof):
$_________________
_______________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identify-
ing Number
_______________________________________
_______________________________________
_______________________________________
Signature Guarantee:1 _________________
36<PAGE>
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. Original Issue of Convertible Debentures.
Convertible Debentures in the aggregate principal
amount of $___________ may, upon execution of this First Supple-
mental Indenture, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Convertible Debentures to or upon
the written order of the Company, signed by its Chairman, its
Vice Chairman, its President, or any Vice President and its Trea-
surer 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 Supplemen-
tal 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 New York, 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 Convertible Deben-
tures shall for any reason be held to be invalid, illegal or un-
enforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
37<PAGE>
First Supplemental Indenture or of the Convertible Debentures,
but this First Supplemental Indenture and the Convertible Deben-
tures shall be construed as if such invalid or illegal or unen-
forceable provision had never been contained herein or therein.
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.
38<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
First Supplemental Indenture to be duly executed, and their re-
spective corporate seals to be hereunto affixed and attested, on
the date or dates indicated in the acknowledgements and as of the
day and year first above written.
NORAM ENERGY CORP.
By________________________________
Name:
Title:
[Seal]
Attest:
By:______________________
The Bank of New York
as Trustee
By_____________________________
Name:
Title:
Attest:
By:___________________
1. Signature must be guaranteed by a commercial bank,
trust company or member firm of the New York Stock
Exchange.
39<PAGE>
[Form of Supplemental Indenture for
non-convertible securities]
====================================
FIRST SUPPLEMENTAL INDENTURE
between
NORAM ENERGY CORP.
and
[Name of Debt Trustee]
Dated as of October __, 1995
=====================================<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount . . . . 4
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . 4
SECTION 2.3. Form and Payment . . . . . . . . . . . . 4
SECTION 2.4. Global Debenture . . . . . . . . . . . . 4
SECTION 2.5. Interest . . . . . . . . . . . . . . . . 6
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption . . . . . . . . 7
SECTION 3.2. Optional Redemption by Company . . . . . 8
SECTION 3.3. No Sinking Fund . . . . . . . . . . . . . 8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period . . 9
SECTION 4.2. Notice of Extension . . . . . . . . . . . 9
Section 4.3. Limitation of Transactions . . . . . . . 10
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses . . . . . . . . . . . 10
Section 5.2. Payment Upon Resignation or Removal . . . 11
ARTICLE VI
SUBORDINATION
SECTION 6.1. Agreement to Subordinate . . . . . . . . 11
SECTION 6.2. Default on Senior Indebtedness . . . . . 12
SECTION 6.3. Liquidation; Dissolution; Bankruptcy . . 12
SECTION 6.4. Subrogation . . . . . . . . . . . . . . . 14
SECTION 6.5. Trustee to Effectuate Subordination . . . 15
SECTION 6.6. Notice by the Company . . . . . . . . . . 15
i<PAGE>
Page
SECTION 6.7. Rights of the Trustee; Holders of Senior
Indebtedness . . . . . . . . . . . . . . 16
SECTION 6.8. Subordination May Not Be Impaired . . . . 17
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange . . . . . . . . . 17
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture . . . . . . . . . . . . 18
ARTICLE IX
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1. Original Issue of Debentures . . . . . . 24
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture . . . . . . . . 25
SECTION 10.2. Trustee Not Responsible for Recitals . . 25
SECTION 10.3. Governing Law . . . . . . . . . . . . . . 25
SECTION 10.4. Separability . . . . . . . . . . . . . . 25
SECTION 10.5. Counterparts . . . . . . . . . . . . . . 25
ii<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of ____________,
1995 (the "First Supplemental Indenture"), between NorAm Energy
Corp., a Delaware corporation (the "Company"), and [Name of Debt
Trustee], as trustee (the "Trustee") under the Indenture dated as
of ________, 1995 between the Company and the Trustee (the
"Indenture").
WHEREAS, the Company executed and delivered the Inden-
ture to the Trustee to provide for the future issuance of the
Company's unsecured junior subordinated debt securities to be
issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and deliv-
ered as provided in 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 ___% Junior Subordinated
Debentures due 20[25] (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, NorAm Financing [I] [II], a Delaware statutory
business trust (the "Trust"), has offered to the public $___
million aggregate liquidation amount of its ___% Trust 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 pro-
ceeds of the issuance and sale by the Trust to the Company of
$___ million aggregate liquidation amount of its ___% Trust
Common Securities, in $____ 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) a reference to a Section or Article is to a
Section or Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and
do not affect interpretation;
(f) 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) Pricing Agreement; (ix) Institutional Trust-
ee; (x) Regular Trustees; (xi) Special Event; and (xii) Tax
Event; and (xiii) Underwriting Agreement;
(g) the following terms have the meanings given to
them in this Section 1.1(g):
"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 Decla-
ration of Trust of NorAm Financing [I] [II], a Delaware statutory
business trust, dated as of _________, 1995.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
2<PAGE>
"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 Deben-
tures 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.
["Extended Maturity Date" means, if the Company elects
to extend the Maturity Date in accordance with Section 2.2(b),
the date selected by the Company which is after the Scheduled
Maturity Date but before October __, 2044.]
"Global Debenture" shall have the meaning set forth in
Section 2.4.
"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.
"Preferred Securities" has the meaning set forth in the
recitals to this First Supplemental Indenture.
["Scheduled Maturity Date" means October __, 2025.]
"Senior Indebtedness" means, with respect to the
Company, (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of such obligor for money borrowed
and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by such obligor; (ii) all
capital lease obligations of such obligor; (iii) all obligations
of such obligor issued or assumed as the deferred purchase price
of property, all conditional sale obligations of such obligor and
all obligations of such obligor under any title retention agree-
ment (but excluding trade accounts payable arising in the ordi-
nary course of business); (iv) all obligations of such obligor
for the reimbursement on any letter of credit, banker's accep-
tance, security purchase facility or similar credit transaction;
(v) all obligations of the type referred to in clauses (i)
3<PAGE>
through (iv) of other Persons for the payment of which such
obligor is responsible or liable as obligor, guarantor or other-
wise; 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 obligor (whether or not such obligation
is assumed by such obligor), except for (1) any such indebtedness
that is by its terms subordinated to or pari passu with the
Debentures, and (2) any indebtedness between or among such obli-
gor and its Affiliates, including all other debt securities and
guarantees in respect of those debt securities, issued to (y) any
other NorAm Financing Trust or (z) any other trust, or a trustee
of such trust, partnership or other entity affiliated with the
Company which is a financing vehicle of the Company (a "Financing
Entity") in connection with the issuance by such Financial Entity
of preferred securities or other securities which rank pari passu
with, or junior to, the Preferred Securities.
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 "___% Junior Subordinated Deferrable Interest
Debentures due 20[25]", limited in aggregate principal amount to
$___ million, which amount shall be as set forth in any written
order of the Company for the authentication and delivery of
Debentures pursuant to Section ___ of the Indenture.
SECTION 2.2. Maturity. [Select appropriate option]
[Use Option 1 if maturity is fixed -- The Maturity Date
is ____________, 2025.]
[Use Option 2 if maturity may be extended -- (a) The
Maturity Date will be either:
i) the Scheduled Maturity Date; or
ii) if the Company elects to extend the Maturity
Date beyond the Scheduled Maturity Date in accordance with
Section 2.2(b), the Extended Maturity Date;
(b) the Company may at any time before the day which
is 90 days before the Scheduled Maturity Date, elect to extend
the Maturity Date only once to the Extended Maturity Date provid-
4<PAGE>
ed that the following conditions in this Section 2.2(b) are
satisfied both at the date the Company gives notice in accordance
with Section 2.2(c) of its election to extend the Maturity Date
and at the Scheduled Maturity Date:
i) the Company is not in bankruptcy or otherwise
insolvent;
ii) the Company is not in default on any Securi-
ties issued to any NorAm Trust or any trustee of such NorAm
Trust in connection with the issuance of Trust Securities by
such NorAm Trust;
iii) the Company has made timely payments on the
Debenture for the immediately preceding six quarters without
deferrals;
iv) the Trust is not in arrears on payments of
Distributions on the Trust Securities issued by it; and
v) the Debentures are rated Investment grade or
the equivalent by Standard & Poor's Corporation, Moody's
Investors Service, Inc., Fitch Investor Services, Duff &
Phelps Credit Rating Company or any other nationally recog-
nized statistical rating organization; and
(c) if the Company elects to extend the Maturity Date
in accordance with Section 2.2(b), the Company shall give notice
to registered holders of the Debentures, the Institutional
Trustee and the Trust of the extension of the Maturity Date and
the Extended Maturity Date at least 90 days before the Scheduled
Maturity Date.]
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. Principal and interest on the Debentures issued in
certificated form will be payable, the transfer of such Deben-
tures will be registrable and such Debentures will be exchange-
able 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
5<PAGE>
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 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 out-
standing 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 ac-
counts of its participants pursuant to the instructions of
the Regular Trustees. The Company upon any such presenta-
tion 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 repre-
sents Preferred Securities other than Preferred Securities
held by the Clearing Agency or its nominee ("Non Book-Entry
Preferred Securities") will be deemed to represent benefi-
cial 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-E-
ntry 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 Certifi-
cate 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 princi-
6<PAGE>
pal amount that were presented by the Institutional Trustee
to the Trustee will be deemed to have been cancelled.
(b) 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 [Two] of the Inden-
ture, 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 addi-
tion, 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 [2.05] of
the Indenture, the Trustee, upon receipt of an Officers Certifi-
cate evidencing such determination by the Company, will authenti-
cate 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 defini-
tive registered form without coupons, in authorized denomina-
tions, the Global Debenture shall be cancelled by the Trustee.
Such Debentures in definitive registered form issued in exchange
for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to in-
structions 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
___% per annum (the "Coupon Rate") from the original date of
issuance until the principal thereof becomes due and payable, and
7<PAGE>
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 Four) quarterly in
arrears on [March 31, June 30, September 30 and December 31] of
each year (each, an "Interest Payment Date," commencing on
__________, 1995), 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 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 30-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 authori-
ty, then, in any case, the Company will pay as additional inter-
est ("Additional Interest") on the Debentures held by the Instit-
utional 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, assess-
8<PAGE>
ments 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.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special 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 Deben-
tures 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 Ac-
tion"), 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 obliga-
tions under the Declaration. The Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemp-
tion or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount suffi-
cient to pay the Redemption Price by 10:00 a.m., New York time,
on the date such Redemption Price is to be paid.
9<PAGE>
SECTION 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to
the provisions of Article [III] 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 _________, 2000,
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 re-
demption 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 proce-
dures, the principal amount of such Debentures held by each
Holder of Debenture 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 Redemp-
tion 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
10<PAGE>
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.
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only regis-
tered 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.
11<PAGE>
(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 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 acquisi-
tions of shares of its common stock in connection with the satis-
faction by the Company of its obligations under any employee
benefit plans or the satisfaction by the Company of its obliga-
tions 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 conver-
sion of one class or series of its capital 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 conver-
sion or exchange provisions of such capital stock or security
being converted or exchanged) or make any guarantee payment with
respect thereto and (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; provided, however,
the Company may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is
being paid.
12<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 offer-
ing, sale and issuance of the Debentures, including commissions
to the underwriters payable pursuant to the Underwriting Agree-
ment and the Pricing Agreement and compensation of the Trustee
under the Indenture in accordance with the provisions of Section
[7.06] of the Indenture;
(b) pay all costs and expenses of the Trust (includ-
ing, 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 6.10, the Company shall pay to the
Trustee all amounts accrued to the date of such termination,
13<PAGE>
removal or resignation. Upon termination of the Declaration or
the removal or resignation of the Delaware Trustee or the Insti-
tutional 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.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. Listing on an Exchange.
If the Debentures are to be issued as a Global Deben-
ture in connection with the distribution of the Debentures to the
holders of the Preferred Securities issued by the Trust upon 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 VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authen-
tication 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
THE FOLLOWING -- This Debenture is a Global Debenture within the
meaning of the Indenture hereinafter referred to and is regis-
tered 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 Deben-
ture 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,
14<PAGE>
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 TRANS-
FER, 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. ______________________
NORAM ENERGY CORP.
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 20[44]
NorAm Energy Corp., a Delaware corporation (the "Compa-
ny", 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 ______-
___, ____, and to pay interest on said principal sum from ___-
_________, 1995, or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest
has been paid or duly provided for, quarterly (subject to defer-
ral as set forth herein) in arrears on [March 31, June 30, Sep-
tember 30 and December 31] of each year commencing ___________,
1995, at the rate of ___% 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 Inter-
15<PAGE>
est Payment Date will, as provided in the Indenture, be paid to
the person in whose name this Debenture (or one or more Predeces-
sor Securities, as defined in said Indenture) is registered at
the close of business on the regular record date for such inter-
est installment. [which shall be the close of business on the
business day next preceding such Interest Payment Date unless
otherwise provided in the Indenture] [IF PURSUANT TO THE PROVI-
SIONS OF THE INDENTURE THE DEBENTURES ARE NO LONGER REPRESENTED
BY A GLOBAL DEBENTURE -- which shall be the close of business on
the ____ business day next preceding such Interest Payment Date.]
Any such interest installment not punctually paid or duly provid-
ed 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 Securi-
ties) 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 regis-
tered 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 Indebted-
ness, and this Debenture is issued subject to the provisions of
the Indenture with respect thereto. Each Holder of this Deben-
ture, 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 hereof, by his or her acceptance
16<PAGE>
hereof, hereby waives all notice of the acceptance of the subor-
dination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereaf-
ter 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 Authentica-
tion hereon shall have been signed by or on behalf of the Trust-
ee.
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 instru-
ment to be executed.
Dated __________________
NORAM ENERGY CORP.
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 Deben-
tures described in the within-mentioned Indenture.
[ ]
or as Authentication Agent
17<PAGE>
By______________________ By______________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the
"Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture
dated as of _______, 1995, duly executed and delivered between
the Company and The Chase Manhattan Bank, N.A., as Trustee (the
"Trustee"), as supplemented by the First Supplemented Indenture
dated as of _______, 1995, 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 Debentures. By the
terms of the Indenture, the Debentures 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 Debentures is limited in aggregate principal amount as speci-
fied in said First Supplemental Indenture.
Because of the occurrence and continuation of a Tax
Event, in certain circumstances, this Debenture may become due
and payable at the principal amount together with any interest
accrued thereon (the "Redemption Price"). The 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 deter-
mines. 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 on or after ________, 2000 (an "Op-
tional Redemption"), or at any time in certain circumstances upon
the occurrence of a Tax Event, at a redemption price equal to
100% of the principal amount plus any accrued but unpaid inter-
est, 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, 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
18<PAGE>
Debentures held by each Debentureholder to be redeemed in accor-
dance with its procedures.
In the event of redemption of this Debenture in part
only, a new Debenture or Debentures of this series for the unre-
deemed 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 Inden-
ture, shall have occurred and be continuing, the principal of all
of the Debentures may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the Holders of not
less than a majority in aggregate principal amount of the Deben-
tures 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) extend the fixed maturity of any
Debentures of any series, or 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 supple-
mental indenture, without the consent of the Holders of each
Debenture then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of any series at the
time outstanding affected thereby, on behalf of all of the Hold-
ers of the Debentures of such series, to waive any past default
in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect
to such series, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on
any of the Debentures of such series. 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),
19<PAGE>
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.
The Company shall have the right at any time during the
term of the Debentures and from time to time to extend the inter-
est 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 interest thereon at the rate specified for
the Debentures to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any
such Extended Interest Payment Period, the Company may further
extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. At
the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any addi-
tional amounts then due, the Company may commence a new Extended
Interest Payment Period.
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 and
State of New York accompanied by a written instrument or instru-
ments 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 ag-
gregate principal amount and series will be issued to the desig-
nated 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 Deben-
20<PAGE>
ture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Regis-
trar) 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 princi-
pal 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.
[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 exchange-
able 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 there-
of.] As provided in the Indenture and subject to certain limita-
tions [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.
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $_-
__________ may, upon execution of this First Supplemental Inden-
ture, 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
21<PAGE>
Company, signed by its Chairman, its Vice Chairman, its Presi-
dent, or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by the Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supple-
mental 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 9.2. 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 9.3. 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 New York, and for all purposes shall be construed in
accordance with the laws of said State.
SECTION 9.4. 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.
SECTION 9.5. Counterparts.
This First Supplemental Indenture may be executed in
any number of counterparts each of which shall be an original;
22<PAGE>
but such counterparts shall together constitute but one and the
same instrument.
23<PAGE>
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 acknowledgements and as of
the day and year first above written.
NORAM ENERGY CORP.
By________________________________
Name:
Title:
[Seal]
Attest:
By:______________________
[Name of Debt Trustee]
as Trustee
By_______________________________
Name:
Title:
Attest:
By:___________________
24<PAGE>
FORM OF PREFERRED
SECURITIES GUARANTEE
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NorAm Financing [I] [II]
Dated as of October __, 1995
====================================<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . 5
SECTION 2.3 Reports by the Preferred Guarantee Trust-
ee . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . 6
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 . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guar-
antee Trustee . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance
of Guarantee . . . . . . . . . . . . . . . 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility. . 12
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustees . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . 13
SECTION 5.2 Waiver of Notice and Demand . . . . . . . 13
SECTION 5.3 Obligations Not Affected . . . . . . . . . 14
SECTION 5.4 Rights of Holders . . . . . . . . . . . . 15<PAGE>
Page
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . 15
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations . . . . . . . . . 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . 16
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . 17
SECTION 8.2 Indemnification . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . 18
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . 18
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . 18
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . 19
SECTION 9.5 Governing Law . . . . . . . . . . . . . . 19
ii<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of October __, 1995, is executed and deliv-
ered by NorAm Energy Corp., a Delaware corporation (the "Guaran-
tor"), and [Name of Preferred Guarantee Trustee], 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 NorAm Financing [I] [II], a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declara-
tion of Trust (the "Declaration"), dated as of ________, 1995,
among the trustees of the Issuer named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided benefi-
cial interests in the assets of the Issuer, the Issuer is issuing
on the date hereof [ ] convertible preferred securi-
ties, having an aggregate liquidation amount of $[
], designated the _____% Convertible 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 Pre-
ferred Securities Guarantee, to pay to the Holders of the Pre-
ferred Securities the Guarantee Payments (as defined herein) and
to make certain other payments on the terms and conditions set
forth herein.
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. <PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the
context otherwise requires:
(a) Capitalized terms used in this Preferred Secur-
ities 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 Secur-
ities Guarantee has the same meaning throughout;
(c) all references to "the Preferred Securities Guar-
antee" 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 Guar-
antee 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 Secur-
ities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the con-
text 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.
"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 convertible common
securities representing common undivided beneficial interests in
the assets of the Issuer.
2<PAGE>
"Preferred Guarantee Trustee" means [Name of Preferred
Guarantee Trustee], 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.
"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 execu-
tion of this Agreement is located at [address].
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"Debentures" means the series of convertible junior
subordinated debt securities of the Guarantor designated the ___%
Junior Subordinated Debentures due [ ] held by the Insti-
tutional 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.
"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 Declara-
tion) 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 Dis-
tributions 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 Pre-
ferred 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 continu-
ing, the rights of holders of the Common Securities to receive
payments under the Common Securities Guarantee Agreement are
3<PAGE>
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 ________,
1995, among the Guarantor (the "Debenture Issuer") and The Bank
of New York, N.A., as trustee, and any indenture supplemental
thereto pursuant to which certain subordinated debt securities of
the Debenture Issuer are to be issued to the Property 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 other-
wise, 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 Offi-
cers' 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;
4<PAGE>
(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 individu-
al, corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust, unincorpo-
rated association, or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"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 per-
formed 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 succes-
sor 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
5<PAGE>
(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.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guaran-
tee 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 re-
ceipt 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 Sections 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 Pre-
ferred 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.
6<PAGE>
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 prece-
dent, 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 Pre-
ferred 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 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 Pre-
ferred Securities, notices of all Events of Default actually
known to a Responsible Officer of the Preferred Guarantee Trust-
ee, 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 of which a Responsible Officer of the Preferred Guarantee
Trustee charged with the administration of the Declaration shall
have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes
7<PAGE>
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 Trus-
tee
(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 Guar-
antee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Pre-
ferred Guarantee Trustee shall automatically vest in any Succes-
sor 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.
(b) If an Event of Default actually known to a Respon-
sible 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 occur-
rence 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 Guaran-
tee 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 Trust-
ee, 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.
8<PAGE>
(d) No provision of this Preferred Securities Guaran-
tee 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 De-
fault 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 Guaran-
tee, 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 cove-
nants 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 Guaran-
tee 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 con-
forming to the requirements of this Preferred Secu-
rities Guarantee; but in the case of any such certifi-
cates 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;
(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,
9<PAGE>
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 Guaran-
tee 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 believ-
ing 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 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
10<PAGE>
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 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 instruc-
tions concerning the administration of this Preferred Secu-
rities 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 pro-
vided to the Preferred Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Preferred Guar-
antee Trustee, against the costs, expenses (including attor-
neys' fees and expenses and the expenses of the Preferred
Guarantee Trustee's agents, nominees or custodians) and lia-
bilities 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; pro-
vided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve th Preferred Guarantee Trustee,
upon the occurrence of an Event of Default, of its obliga-
tion 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, instru-
ment, 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
11<PAGE>
the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trust-
ee 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 compli-
ance 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 a-
gent'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 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 Guaran-
tee shall be deemed to impose any duty or obligation on the Pre-
ferred 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 Guar-
antee
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.
12<PAGE>
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 Ex-
change 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 authori-
ty. 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 com-
bined 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).
(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.
13<PAGE>
(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 resig-
nation. The Preferred Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instru-
ment 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.
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
14<PAGE>
when due, regardless of any defense, right of set-off or counter-
claim 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 relat-
ing 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 Deben-
tures 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;
15<PAGE>
(d) the voluntary or involuntary liquidation, dissolu-
tion, sale of any collateral, receivership, insolvency, bank-
ruptcy, 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 Pre-
ferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to
enforce this Preferred Securities Guarantee, any Holder of Pre-
ferred Securities may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceed-
ing against the Issuer, the Preferred Guarantee Trustee or any
other Person.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION 5.6 Subrogation
16<PAGE>
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 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 hereun-
der 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 re-
spect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, (b) the
Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt secu-
rities (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 forego-
ing (other than pursuant to the Preferred Securities Guarantee
Agreement); provided, however, the Guarantor may declare and pay
a stock dividend where the dividend stock is the same stock as
that on which the dividend is being paid.
17<PAGE>
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordi-
nate and junior in right of payment to all other liabilities of
the Guarantor, (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.
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 Guarantor's common
stock to the Holders in respect of the conversion of the Pre-
ferred Securities into the Guarantor's common stock or 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
18<PAGE>
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 perti-
nent to the existence and amount of assets from which Distribu-
tions to Holders of Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any loss, liability or expense incurred without 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 8.2 shall survive the
termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Prefer-
red 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 adverse-
ly affect the rights of Holders (in which case no consent of
Holders will be required), this Preferred Securities Guarantee
19<PAGE>
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 other-
wise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all the outstand-
ing 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):
[Name of Preferred Guarantee Trustee]
[Address]
Attention:
(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):
NorAm Energy Corp.
1600 Smith Street
32nd Floor
Houston, Texas 77002
Attention:__________
(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 deliv-
ered 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.
20<PAGE>
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.
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 NEW YORK.
21<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
NorAm Energy Corp., as Guarantor
By:_______________________________
Name:
Title:
[Name of Preferred Guarantee Trust-
ee], as Preferred Guarantee Trustee
By:______________________________
Name:
Title:
22<PAGE>
NORAM ENERGY CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands of dollars)
<TABLE>
<CAPTION>
6-30-95 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
as set forth in Consolidated
Statement of Income $ 44,924 $ 51,291 $ 39,935 $ 6,227 $ 16,515 $ 100,826
Add back:
Provision for income taxes 35,833 34,372 46,481 12,516 18,418 52,643
Less:
Non-utility interest capitalized 0 0 0 0 0 0
80,757 85,663 86,416 18,743 34,933 153,469
Fixed charges (from continuing
operations):
Interest 76,001 167,384 169,857 182,453 174,044 150,593
Amortization of debt discount
and expense 1,563 3,312 3,421 4,450 3,290 2,191
Portion of rents considered to
represent an interest factor 5,646 11,292 10,402 7,704 6,514 5,534
Total fixed charges 83,210 181,988 183,680 194,607 183,848 158,318
Earnings $ 163,967 $ 267,651 $ 270,096 213,350 $ 218,781 $ 311,787
Ratio of earnings to fixed charges 1.97 1.47 1.47 1.10 1.19 1.97
</TABLE>
<PAGE>
NORAM ENERGY CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands of dollars)
<TABLE>
<CAPTION>
6-30-95 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
as set forth in Consolidated
Statement of Income $ 44,924 $ 51,291 $ 39,935 $ 6,227 $ 16,515 $ 100,826
Add back:
Provision for income taxes 35,833 34,372 46,481 12,516 18,418 52,643
Less:
Non-utility interest capitalized 0 0 0 0 0 0
80,757 85,663 86,416 18,743 34,933 153,469
Fixed charges (from continuing
operations):
Interest 76,001 167,384 169,857 182,453 174,044 150,593
Amortization of debt discount
and expense 1,563 3,312 3,421 4,450 3,290 2,191
Portion of rents considered to
represent an interest factor 5,646 11,292 10,402 7,704 6,514 5,534
Preferred stock dividend
requirements 7,011 13,026 16,879 23,480 16,497 11,872
Total fixed charges 90,221 195,014 200,559 218,087 200,345 170,190
Earnings $ 170,978 $ 280,677 $ 286,975 $ 236,830 $ 235,278 $ 323,659
Ratio of earnings to fixed charges 1.90 1.44 1.43 1.09 1.17 1.90
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 (File No. _______________) of our report,
dated March 24, 1995, on our audits of the consolidated financial
statements and financial statement schedule of NorAm Energy Corp.
& Subsidiaries. We also consent to the reference to our firm
under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
Houston, Texas
November 2, 1995<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Michael B. Bracy
Michael B. Bracy<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Joe E. Chenoweth
Joe E. Chenoweth<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ O. Holcombe Croswell
O. Holcombe Crosswell<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Walter A. DeRoeck
Walter A. DeRoeck<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
of NorAm Energy Corp., a Delaware corporation (the "Company"),
does hereby make, constitute and appoint Michael B. Bracy and T.
Milton Honea, and each of them acting individually, his true and
lawful attorney-in-fact and agent with power to act without the
other and full power of substitution and resubstitution, to
execute, deliver and file, for and on his behalf, and in his name
and in his capacity or capacities as aforesaid, any and all
instruments which said attorneys-in-fact and agents, or any of
them, may deem necessary to enable the Company to comply with the
Securities Act of 1933, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission, in
connection with the filing with the Securities and Exchange
Commission of a Registration Statement on Form S-3, together with
any amendments and any other documents in support thereof or
supplemental thereto, relating to the offering and issuance from
time to time of up to $500,000,000 of bonds, debentures, notes or
similar instruments; shares of the Company's common stock, $.625
par value per share; shares of the Company's preferred stock,
$.10 par value per share; and/or guaranties of securities offered
by a trust created by the Company, hereby granting to said
attorneys-in-fact and agents and each of them full power and
authority to do and perform each and every act and thing
whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Jack W. Ellis II
Jack W. Ellis II<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Mickey P. Foret
Mickey P. Foret<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ John P. Gover
John P. Gover<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Joseph M. Grant
Joseph M. Grant<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Robert C. Hanna
Robert C. Hanna<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ W. Jeffrey Hart
W. Jeffrey Hart<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ T. Milton Honea
T. Milton Honea<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Myra Jones
Myra Jones<PAGE>
POWER OF ATTORNEY
NORAM ENERGY CORP.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of NorAm Energy Corp., a Delaware corporation (the
"Company"), does hereby make, constitute and appoint Michael B.
Bracy and T. Milton Honea, and each of them acting individually,
his true and lawful attorney-in-fact and agent with power to act
without the other and full power of substitution and
resubstitution, to execute, deliver and file, for and on his
behalf, and in his name and in his capacity or capacities as
aforesaid, any and all instruments which said attorneys-in-fact
and agents, or any of them, may deem necessary to enable the
Company to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing with the
Securities and Exchange Commission of a Registration Statement on
Form S-3, together with any amendments and any other documents in
support thereof or supplemental thereto, relating to the offering
and issuance from time to time of up to $500,000,000 of bonds,
debentures, notes or similar instruments; shares of the Company's
common stock, $.625 par value per share; shares of the Company's
preferred stock, $.10 par value per share; and/or guaranties of
securities offered by a trust created by the Company, hereby
granting to said attorneys-in-fact and agents and each of them
full power and authority to do and perform each and every act and
thing whatsoever as said attorneys-in-fact and agents may deem
necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in
the capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorneys-in-fact and
agents may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has subscribed these
presents, effective as of the 31st day of October, 1995.
/s/ Larry C. Wallace
Larry C. Wallace<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,377,394
<OTHER-PROPERTY-AND-INVEST> 681,870
<TOTAL-CURRENT-ASSETS> 276,286
<TOTAL-DEFERRED-CHARGES> 72,403
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,407,953
<COMMON> 77,470
<CAPITAL-SURPLUS-PAID-IN> 876,436
<RETAINED-EARNINGS> (336,309)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 630,808
0
130,000
<LONG-TERM-DEBT-NET> 1,323,674
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0
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3,900
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</TABLE>
