<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1996
REGISTRATION NO. 33-64001
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION NO. 33-52853
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION NO. 33-48750
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT NO. 2
UNDER THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C> <C>
NORAM ENERGY CORP. DELAWARE 72-0120530
NORAM FINANCING I DELAWARE APPLIED FOR
NORAM FINANCING II DELAWARE APPLIED FOR
(Exact name of registrant as (State or other jurisdiction of (I.R.S. Employer
specified in its charter) incorporation or organization) Identification No.)
</TABLE>
<TABLE>
<S> <C>
1600 SMITH STREET, 32ND FLOOR HUBERT GENTRY, JR.
HOUSTON, TEXAS 77002 SENIOR VICE PRESIDENT AND GENERAL COUNSEL
(713) 654-5600 NORAM ENERGY CORP.
(Address, including zip code, and telephone number, 1600 SMITH STREET, 11TH FLOOR
including area code, of each registrant's HOUSTON TEXAS 77002
principal executive offices) (713) 654-5600
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
</TABLE>
---------------------
Copies to:
<TABLE>
<S> <C>
GERRY D. OSTERLAND, ESQ. VINCENT J. PISANO, ESQ.
JONES, DAY, REAVIS & POGUE SKADDEN, ARPS, SLATE, MEAGHER & FLOM
2300 TRAMMELL CROW CENTER 919 THIRD AVENUE
2001 ROSS AVENUE NEW YORK, NEW YORK 10022
DALLAS, TEXAS 75201, (214) 220-3939 (212) 735-3000
</TABLE>
---------------------
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.
---------------------
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/
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PRICE PER UNIT(2)(3) PRICE(3)(4) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities, Preferred Stock and Common
Stock of NorAm Energy Corp., Preferred
Securities of NorAm Trusts(6)..............
- ------------------------------------------------------------------------------------------------------------------------------
Guarantees of Preferred Securities of NorAm
Trusts by NorAm Energy Corp.(7)............ $500,000,000 100% $500,000,000 $133,760(5)
- ------------------------------------------------------------------------------------------------------------------------------
Total........................................ $500,000,000 $500,000,000 $133,760
==============================================================================================================================
</TABLE>
(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.
<PAGE> 2
(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, comprised of the obligations of
NorAm Energy Corp. to pay certain costs, expenses, debts, and obligations of
each NorAm Trust as set forth in the Amended and Restated Declaration of
Trust of each of the foregoing, the Indenture and Supplemental Indentures
thereto, in each case as further described in the Registration Statement.
The Preferred Securities Guarantee, when taken together with NorAm's
obligations under the Subordinated Debt Securities, the Indenture, and the
Declaration will provide a full and unconditional guarantee on a
subordinated basis by NorAm of payments due on the Preferred Securities.
Pursuant to Rule 457(n) under the Securities Act of 1933, no fee is payable
with respect to the Guarantee and the back-up undertaking.
---------------------
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> 3
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> 4
***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED JANUARY 22, 1996
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 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.
---------------------
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 , 1996.
<PAGE> 5
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.
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.
2
<PAGE> 6
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 is conducted principally
through the following wholly-owned subsidiaries of the Company: NorAm Trading
and Transportation Group, Inc., 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.
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
3
<PAGE> 7
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,
32nd 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
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
1995 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1).... 1.42(2) 1.47 1.47 1.10 1.19 1.97
</TABLE>
- ---------------
(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
nine 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.
4
<PAGE> 8
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 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
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.
5
<PAGE> 9
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 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
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designate additional Paying Agents or rescind the designation of any Paying
Agent 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 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 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
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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)
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 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
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<PAGE> 12
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)
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
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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 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 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.
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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.
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
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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 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.)
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% in
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
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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.)
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.)
13
<PAGE> 17
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 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
14
<PAGE> 18
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.
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.
15
<PAGE> 19
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.
16
<PAGE> 20
***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED JANUARY 22, 1996
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, 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 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 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 , 1996.
<PAGE> 21
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.
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.
2
<PAGE> 22
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 is conducted principally
through the following wholly-owned subsidiaries of the Company: NorAm Trading
and Transportation Group, Inc., 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.
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
3
<PAGE> 23
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,
32nd 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 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
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED ------------------------------------
SEPTEMBER 30, 1995 1994 1993 1992 1991 1990
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Including Preferred Stock
Dividends(1)...................... 1.39(2) 1.44 1.43 1.09 1.17 1.90
</TABLE>
- ---------------
(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
nine 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.
4
<PAGE> 24
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 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
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.
5
<PAGE> 25
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
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
6
<PAGE> 26
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 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.
7
<PAGE> 27
***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED JANUARY 22, 1996
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
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 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 , 1996.
<PAGE> 28
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.
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.
2
<PAGE> 29
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 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. Each NorAm
Trust will have two NorAm Trustees who are employees or officers of or who are
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 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, 32nd 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
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 is conducted principally
through the following wholly-owned subsidiaries of the Company: NorAm Trading
and Transportation Group, Inc., 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
3
<PAGE> 30
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.
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.
4
<PAGE> 31
The Company's principal executive offices are located at 1600 Smith Street,
32nd 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
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
1995 1994 1993 1992 1991 1990
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Including Preferred Stock
Dividends(1)...................... 1.39(2) 1.44 1.43 1.09 1.17 1.90
</TABLE>
- ---------------
(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
nine 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 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
5
<PAGE> 32
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
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
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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 guarantee on a subordinated
basis 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 Trust and will not have funds available therefor. See
"Description of the Subordinated Debt Securities -- Certain Covenants." The
Preferred Securities Guarantee, when taken together with NorAm's obligations
under the Subordinated Debt Securities, the Subordinated Indenture, and the
Declaration will provide a full and unconditional guarantee on a subordinated
basis by the Company of payments due on the Preferred Securities.
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.
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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. Notwithstanding the
foregoing, 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 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.
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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 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
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Subordinated Debt Securities are issuable as a global security, and in such
case, the identity of the depositary. (Section 2.1).
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.
The Prospectus Supplement relating to an issue of Subordinated Debt
Securities will set forth the aggregate amount of outstanding indebtedness as of
the most recent practicable date that by the terms of such Subordinated Debt
Securities will be senior to the Subordinated Debt Securities. The Prospectus
Supplement will also describe any limitations on the issuance of additional
indebtedness senior to the Subordinated Debt Securities.
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.
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,
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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 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).
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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. 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
(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
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(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).
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
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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 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.
14
<PAGE> 41
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.
15
<PAGE> 42
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.
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Securities and Exchange Commission Registration Fee....................... $172,414
Printing Fees............................................................. $ 86,000
Trustee Fees and Expenses................................................. $ 15,000
Accountant's Fees and Expenses............................................ $ 60,000
Legal Fees and Expenses................................................... $ 75,000
Listing Fees and Expenses................................................. $ 25,000
Blue Sky Fees and Expenses................................................ $ 15,000
Miscellaneous............................................................. $ 11,586
--------
Total................................................................... $460,000
========
</TABLE>
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.
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
II-1
<PAGE> 43
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
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.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
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)).
</TABLE>
II-2
<PAGE> 44
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
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 relating to Subordinated Debt Securities 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).
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
(incorporated by reference to Exhibit 5 to the Company's Registration
Statement on Form S-3 (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
(incorporated by reference to Exhibit 5.1 to the Company's
Registration Statement on Form S-3 (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.
</TABLE>
II-3
<PAGE> 45
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
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 (incorporated by reference to Exhibit 24.1 to
the Company's Registration Statement on Form S-3 (Registration
Statement 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 (incorporated by reference to Exhibit 25.1 to
the Company's Registration Statement on Form S-3 (Registration
Statement 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
relating to Subordinated Debt Securities.
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.
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.
25.5 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Preferred
Securities Guarantee of NorAm Energy Corp. for the Benefit of the
holders of Preferred Securities of NorAm Financing I.
25.6 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under 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.
</TABLE>
- ---------------
* Previously filed.
** To be filed by a Current Report on Form 8-K.
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:
(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,
II-4
<PAGE> 46
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. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; 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 of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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-5
<PAGE> 47
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 Amendment No. 1 to
the Registration Statement, Post-Effective Amendment No. 2 to Registration
Statement No. 33-52853 and Post-Effective Amendment No. 2 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 22nd day of
January, 1996.
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 Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ T. MILTON HONEA Principal executive officer January 22, 1996
- -------------------------------------------- and Director
(T. Milton Honea)
Chairman of the Board and
Chief Executive Officer
/s/ MICHAEL B. BRACY Principal financial officer January 22, 1996
- -------------------------------------------- and Director
(Michael B. Bracy)
Executive Vice President and
Principal Financial Officer
/s/ JACK W. ELLIS, II Principal accounting officer January 22, 1996
- --------------------------------------------
(Jack W. Ellis, II)
Vice President and
Corporate Controller
JOE E. CHENOWETH* Director January 22, 1996
- --------------------------------------------
(Joe E. Chenoweth)
O. HOLCOMBE CROSSWELL* Director January 22, 1996
- --------------------------------------------
(O. Holcombe Crosswell)
WALTER A. DeROECK* Director January 22, 1996
- --------------------------------------------
(Walter A. DeRoeck)
MICKEY P. FORET* Director January 22, 1996
- --------------------------------------------
(Mickey P. Foret)
JOHN P. GOVER* Director January 22, 1996
- --------------------------------------------
(John P. Gover)
JOSEPH M. GRANT* Director January 22, 1996
- --------------------------------------------
(Joseph M. Grant)
</TABLE>
II-6
<PAGE> 48
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<S> <C> <C>
ROBERT C. HANNA* Director January 22, 1996
- ---------------------------------------------
(Robert C. Hanna)
JEFFREY W. HART* Director January 22, 1996
- ---------------------------------------------
(Jeffrey W. Hart)
MYRA JONES* Director January 22, 1996
- ---------------------------------------------
(Myra Jones)
LARRY C. WALLACE* Director January 22, 1996
- ---------------------------------------------
(Larry C. Wallace)
*By /s/ MICHAEL B. BRACY
- ---------------------------------------------
(Michael B. Bracy
Attorney-in-Fact)
</TABLE>
II-7
<PAGE> 49
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 Amendment No. 1 to the Registration Statement to be signed on their
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on this 22nd day of January, 1996.
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-8
<PAGE> 50
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
- ----------
<S> <C>
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.
4.8 -- Form of Indenture relating to Subordinated Debt Securities 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
(incorporated by reference to Exhibit 5 to the Company's
Registration Statement on Form S-3 (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 (incorporated by reference to Exhibit 5.1 to the
Company's Registration Statement on Form S-3 (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.
</TABLE>
<PAGE> 51
<TABLE>
<CAPTION>
EXHIBIT
- ----------
<S> <C>
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 (incorporated by reference to
Exhibit 24.1 to the Company's Registration Statement on Form S-3
(Registration Statement 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 (incorporated by reference to
Exhibit 25.1 to the Company's Registration Statement on Form S-3
(Registration Statement 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
relating to Subordinated Debt Securities.
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.
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.
25.5 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Preferred
Securities Guarantee of NorAm Energy Corp. for the Benefit of the
holders of Preferred Securities of NorAm Financing I.
25.6 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under 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.
</TABLE>
- ---------------
* Previously filed.
** To be filed by a Current Report on Form 8-K.
<PAGE> 1
EXHIBIT 4.6
[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> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
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 . . . . . . . . . . . . . . . . . . . 17
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
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
i
<PAGE> 3
<TABLE>
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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 Trustees 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 Succession 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
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 Certificates . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
ii
<PAGE> 4
<TABLE>
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<S> <C> <C>
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 Institutional Trustee . . . . . . . . . . . . . . . . . . 52
SECTION 13.2 Representations and Warranties of Delaware Trustee . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XIV
MISCELLANEOUS
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
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
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<S> <C> <C>
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
</TABLE>
iv
<PAGE> 6
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
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)
</TABLE>
- ---------------
* 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> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NORAM FINANCING [I] [II]
____________, 1995
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of October __, 1995, by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the 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 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 governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE> 8
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in
this Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent 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.
"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.
2
<PAGE> 9
"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 Agreement]].
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"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.
"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.
3
<PAGE> 10
"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 specified 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 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).
"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 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 Convertible 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.
4
<PAGE> 11
"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 Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex
I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Convertible 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
Convertible Pre-
5
<PAGE> 12
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 Certificate
has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"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.
6
<PAGE> 13
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the 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 corporation, or
any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Convertible 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 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
7
<PAGE> 14
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Convertible 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.
(b) The Institutional Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by 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.
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SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide the Institutional Trustee (i) within 14 days
after each record date for payment of Distributions, a list, in such form as
the Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Securities ("List of Holders") as of such record date,
provided that neither the Sponsor nor the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most recent List of Holders given to the
Institutional Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Institutional Trustee. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity) provided that the
Institutional Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its
obligations under 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 Institutional
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 required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of compliance
with any conditions precedent, if any,
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provided for in this Declaration that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
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 Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation amount of the
Convertible Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
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 with respect to the Common
Securities and its consequences,
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provided that, if the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority to
be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Convertible Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Convertible Preferred Securities and
only the Holders of the Convertible Preferred Securities will have the right to
direct the Institutional Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of 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 Indenture
by the Institutional Trustee at the direction of the Holders of the Convertible
Preferred Securities, constitutes a waiver of 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
Indenture Act.
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SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.7(a)
being hereby defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment established for
the Debentures, the Institutional Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Institutional
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to
have knowledge of any default except:
(i) a default under Sections ____ and ____ of the
Indenture; or
(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a Responsible Officer
of the Institutional Trustee charged with the administration of the
Declaration shall have actual knowledge.
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.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Institutional Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust.
An action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
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-
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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 qualify or register such Convertible
Preferred Securities for sale;
(iii) execute and file an application, prepared
by the Sponsor, to the New York Stock Exchange, Inc. or any
other national stock exchange or the Nasdaq Stock Market's
National Market for listing upon notice of issuance of any
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 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
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 Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
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(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;
(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 incidental
to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its
election to defer payments of interest on the Debentures by extending
the interest payment period under the Indenture;
(n) to 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
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Delaware and of each other jurisdiction in which such existence 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 Trustees
determine in their discretion to be necessary or desirable in carrying
out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to be classified for
United States federal income tax purposes as a grantor trust;
and
(iii) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness of
the Debenture Issuer for United States federal income tax
purposes,
provided that such action does not adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all
applicable tax returns and tax information reports that are required
to be filed with respect to the Trust to be duly prepared and filed by
the Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust
set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
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SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including
the Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust
not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as provided in this Amended and Restated
Declaration or Annex I, (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the Indenture,
(C) exercise any right to rescind or annul any declaration that the principal
of all the Debentures shall be due and payable, or (D) consent to any
amendment, modification or termination of the Indenture or the Debentures where
such consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the Trust
will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by
and held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may
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hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its
right, title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (if the Institutional Trustee does not also act as Delaware
Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Institutional Trustee Account") in the
name of and under the exclusive control of the Institutional Trustee
on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by the
Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Convertible
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 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
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions
and perform such duties as may be specifically required of the Institutional
Trustee pursuant to the terms of the Securities.
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(e) The Institutional Trustee shall take any Legal
Action which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or the
Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a
Trustee unless either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been
appointed and has accepted that appointment in accordance with Section
5.6.
(g) The Institutional Trustee shall have the legal
power to exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of such Securities.
(h) 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 Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of
any Event of Default and after the curing of all Events of
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Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Declaration and no implied covenants shall
be read into this Declaration against the Institutional Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Institutional Trustee has
actual knowledge, the Institutional Trustee shall exercise such of the rights
and powers vested in it by this Declaration, and use the same degree of care
and skill in their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed
to relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the
Institutional Trustee shall be determined solely by the
express provisions of this Declaration and the Institutional
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of
the Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by
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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
Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Institutional
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Institutional Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Institutional Trustee Account shall be to deal with
such property in a similar manner as the Institutional Trustee deals
with similar property for its own account, subject to the protections
and limitations on liability afforded to the Institutional Trustee
under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for
any interest on any money received by it except as it may otherwise
agree with the Sponsor. Money held by the Institutional Trustee need
not be segregated from other funds held by it except in relation to
the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
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SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel
or other experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any Holder, unless
such Holder shall have provided to the Institutional Trustee security
and indemnity, reasonably satis-
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factory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by
the Institutional Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Institutional
Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees or attorneys and
the Institutional Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(ix) any action taken by the Institutional Trustee or
its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (i) may request
instructions from the Holders of the Securities which instructions may
only be given by the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to direct the
Institutional Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in
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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 authority available to the
Institutional Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee described
in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, 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 correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
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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 corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Securities, the Delaware Trustee or
the Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Convertible Preferred Securities (the "Successor Securities")
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
Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national 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 Securities
(including any Successor Securities) to be downgraded
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by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the Convertible Preferred
Securities as a result of such merger, consolidation, amalgamation or
replacement);
(vi) such Successor Entity has a purpose identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation
or replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the 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.
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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 Convertible Preferred Securities
are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Convertible
Preferred Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the
Convertible Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take
appropriate action to qualify or register for sale all or part of the
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 executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable
laws of any such States;
(c) to prepare for filing by the Trust an application
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Convertible Preferred Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the 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.
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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 Securities,
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 requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law,
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable
law, then the Institutional Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
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SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall
act as Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall
cease to be eligible to so act under Section 5.3(a), the Institutional Trustee
shall immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
(d) The 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:
[ ]
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
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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 execute on behalf of the
Trust any documents which the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by a majority of the Regular Trustees; and
(c) 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:
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of
the Holders of a Majority in liquidation amount of the Com-
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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 accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office
until his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has
been appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use
their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if
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the Institutional Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Institutional Trustee or
Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall
be liable for the acts or omissions to act of any Successor Institutional
Trustee or successor Delaware Trustee, as the case may be.
SECTION 5.8 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 evidence 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.
The death, resignation, retirement, removal, bankruptcy,
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 Declaration.
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
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in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of
the Regular Trustees or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration,
any action of the Regular Trustees may be taken at a meeting by vote of a
majority of the Regular Trustees present (whether in person or by telephone)
and eligible to vote with respect to such matter, provided that a Quorum is
present, or without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all action
of such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.11 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
(b) the Regular Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 5.12 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 Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware
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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 extent funds are available for that purpose, to
make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust
issue one class of convertible preferred securities representing 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 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 Convertible 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
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such Security, shall be the Regular Trustees of the Trust, although at the date
of the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other 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 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 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 or Conversion Agent, the
Institutional 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.
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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;
(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 dissolution
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 redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures
endorsed thereon shall have been distributed to the Holders of
Securities in exchange for all of the Securities; or
(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.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred
Securities shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any
Related Party may only transfer Common Securities to the Sponsor or a Related
Party of the Sponsor; provided that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
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SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Convertible
Preferred Securities, the Convertible Preferred Securities Certificates, on
original issuance, will be issued in the form of one or more, fully registered,
global Convertible Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global 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 consents 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 Section
9.4 conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 shall control; and
(d) the rights of the Convertible Preferred Security
Beneficial Owners shall be exercised only through the Clearing Agency
and shall be limited to those established by law
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and agreements between such Convertible 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 Convertible
Preferred Security Holders is required under this Declaration, unless and until
Definitive Convertible Preferred Security Certificates shall have been issued
to the Convertible 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 Convertible Preferred Security 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 Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Convertible
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 Preferred Securities,
then:
(c) Definitive Convertible Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of
the Trust with respect to such Convertible Preferred Securities; and
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(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 Certificates.
If:
(a) any mutilated Certificates should be surrendered to
the Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of
any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep each of
them harmless.
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration,
the 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, responsible
or accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the as-
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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 accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
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(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The 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 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
termi- nation of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
Company Indemnified Person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The 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
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably
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entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person
shall be successful on the merits or otherwise (including dismissal of
an action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii)
of this Section 10.4(a) (unless ordered by a court) shall be made by
the Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the 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 Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
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
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respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where
the Regular Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately breached his
duty to the Trust or its Common or 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 advancement 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
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 Debenture 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 (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Company
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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, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred 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.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Institutional Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(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
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder
as is required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, howev-
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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 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
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(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the
Delaware Trustee;
(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have 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 (including 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 Declaration (including
the terms of the Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Institutional Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) at such time after the Trust has issued any
Securities that remain outstanding, any amendment that would adversely affect
the rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in the
terms of such Securities;
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(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities
and;
(f) the rights of the holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration
may be amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations
of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the right,
preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of
the Amended Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration,
the terms of the Securities or the rules of any stock exchange on which the
Convertible Preferred Securities are listed or admitted for trading. The
Regular Trustees shall call a meeting of the Holders of such class if directed
to do so by the Holders of at least 10% in liquidation amount of 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
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wish to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified
shall be counted for purposes of determining whether the required percentage
set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least 7
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the 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 Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to authorize
or take such action at a meeting at which all Holders of Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person
to act for it by proxy on all matters in which a Holder of Securities
is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting
or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
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(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 deliver, 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,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless
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of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the
Declaration by the Institutional Trustee does not conflict with or
constitute a breach of the Articles of Organization or By-laws of the
Institutional Trustee; and
(d) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the
Institutional Trustee, of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents 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
corporation with trust powers, duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform
its obligations under the Certificate of Trust and the Declaration.
The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the Delaware
Trustee, of the Declaration.
(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.
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ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular
Trustees at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders of the
Securities):
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 Securities):
_____________________
_____________________
_____________________
[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):
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.
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All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature
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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.
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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:
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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 provisions 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 designated for the purposes of identification only as
"______% Trust Originated Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declara- tion, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
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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 distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360- day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative,
will accrue from ________, 1995, and will be payable quarterly in arrears, on
[March 31, June 30, September 30, and December 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 "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the date of maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Convertible
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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 Convertible Preferred
Securities -- 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 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 Preferred Securities,
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least one Business Day but less than 60 Business Days before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on the special
record date or other specified date determined in accordance with the
Indenture. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event 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 adjustment shall be made with respect to accumulated and
unpaid Distributions 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.
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(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 dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution
to Holders of Securities after satisfaction of liabilities of creditors an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Securities, with an interest rate equal to the Coupon Rate of, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Securities, shall be distributed on a Pro Rata basis to
the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in
part, whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Special Event as described below), the
proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption price
of $25 per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the "Redemption
Price"). Holders will be given not less than 30 nor more than 60 days notice
of such redemption.
(b) If fewer than all the outstanding Securities are to
be so redeemed, the Common Securities and the Convertible Preferred Securities
will be redeemed Pro Rata and the Convertible Preferred Securities to be
redeemed will be as described in Section 4(f)(ii) below.
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(c) If a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event") shall occur and be continuing the
Regular Trustees shall, except in certain limited circumstances in relation to
a Tax Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Institutional Trustee,
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and having
the same record date for payment as the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the occurrence of such
Special Event (the "90 Day Period"); provided, however, that, as a condition of
such dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
of the Securities will not recognize any gain or loss for United States federal
income tax purposes as a result of the dissolution of the Trust and the
distribution of Debentures, and provided, further, that, if at the time there
is available to the Trust the opportunity to eliminate, within the 90 Day
Period, the Special Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
that has no adverse effect on the Trust, the Debenture Issuer, the Sponsor or
the Holders of the Securities ("Ministerial Action"), the Trust will pursue
such Ministerial Action in lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax
Event Opinion (as defined hereinafter) by the Regular Trustees, the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even if the Debentures
were distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) 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 Debenture Issuer shall have the
right at any time, upon not less than 30 nor more than 60 days notice, to
redeem the Debentures in whole or in part for cash within 90 days following the
occurrence of such 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
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by the Trust at the Redemption Price on a Pro Rata basis; provided, however,
that, if at the time there is available to the Trust the opportunity to
eliminate, within such 90 day period, the 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 Supplement, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after the date of the Prospectus Supplement, there is
more than an insubstantial risk that (i) the Trust is or will be within 90 days
of the date thereof, subject to United States federal income tax with respect
to interest accrued or received on the Debentures, (ii) the Trust is, or will
be within 90 days of the date thereof, subject to more than a de minimis amount
of taxes, duties or other governmental charges, or (iii) interest payable by
the Debenture Issuer to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the
Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") that, as a result of the occurrence of a change in law
or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after the date of the Prospectus
Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Convertible Preferred Securities, will
receive a
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registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing 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 Debentures
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the
outstanding Securities unless all accrued and unpaid Distributions have been
paid on all Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) If the Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the 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
distribution of Debentures in exchange for the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Convertible Preferred
Securities, it being understood that, in respect
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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 nominee, the distribution of the
proceeds of such redemption will be made to each Clearing Agency
Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency
or nominee.
(iii) If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may only be issued if
the Debentures are redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the 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 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
Convertible Preferred Securities and will give the Depository
irrevocable 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 sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been
given and funds deposited as required, if applicable, then immediately
prior to the close of business on the date of such deposit, or on the
redemption date, as applicable, distributions will cease to accrue on
the Securities 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
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on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual
date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating
the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Convertible 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 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
(including, without limitation, United States federal securities
laws), provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor or any of
its subsidiaries may at any time and from time to time purchase
outstanding 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 Security per $__ principal amount of Debentures, and immediately
convert 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 Debentures (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")).
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(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 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
Conversion 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 election 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 Distribution
payable on such securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities 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 dividends on the shares of NorAm Common Stock issued
upon such conversion. 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
Persons 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.
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(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 accordance with this Section. In effecting the
conversion and transactions 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 conversion 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
outstanding. 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
interests 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
qualification of the NorAm Common Stock (and all requirements to list the NorAm
Common Stock issuable upon conversion of Debentures 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.
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(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 Common 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 proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section ___ of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided, however, that, where a
consent under the Indenture would require the consent or act of the Holders of
greater than a majority of the Holders in principal amount of Debentures
affected 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 Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Convertible Preferred Securities. Other than with respect to
directing the time, method and place of conducting any remedy
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<PAGE> 76
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
Trustee's rights under the Declaration without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of NorAm to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder on or after the respective due date
specified in the Debentures. Except as provided in the preceding sentence, the
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
Any approval or direction of Holders of 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 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 Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
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Notwithstanding that Holders of Convertible Preferred
Securities are entitled to vote or consent under any of the circumstances
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 eliminated and subject to the requirements
of the second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may
direct the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the 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 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
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<PAGE> 78
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 Institutional Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
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
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Convertible 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
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<PAGE> 79
effective except with the approval of a Majority in liquidation amount of such
class of Securities.
(b) In the event the consent of the Institutional Trustee
as the holder of the Debentures is required under the Indenture with respect to
any amendment, modification or termination on the Indenture or the Debentures,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding; provided, further, that the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified
as other than a grantor trust on account of such action.
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 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 Securities 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-
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<PAGE> 80
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.
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 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.
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<PAGE> 81
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 transfer of this Convertible
Preferred Security (other than a transfer of this Convertible 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 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)
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 convertible preferred
securities of the Trust representing undivided beneficial interests in the
assets of the
A1-1
<PAGE> 82
Trust designated the _____% Trust Originated Convertible Preferred Securities
(liquidation amount $__ per Convertible Preferred 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 Securities 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 indebtedness and the Convertible
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of ____________, 199__.
NorAm Financing [I] [II]
By:________________________________
Name:
Title: Regular Trustee
A1-2
<PAGE> 83
[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.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by applicable
law). The term "Distributions" as used herein includes such cash distributions
and any such interest payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360- day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Preferred Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears, on [March 31, June 30,
September 30 and December 31 of each year, commencing on ______ __, 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
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Convertible Preferred Securities shall be redeemable as
provided in the Declaration.
A1-3
<PAGE> 84
The Convertible Preferred Securities shall be convertible 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.
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<PAGE> 85
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 Convertible 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 undersigned, 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> 86
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
Identifying 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> 87
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 transferthis Convertible Preferred Security Certificate on the books of
the Trust. The agent may substitute another to actfor him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Convertible
Preferred Security Certificate)
A1-7
<PAGE> 88
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 designated the ______% Trust Originated Common Securities (liquidation
amount $25 per Common Security) (the "Common Securities"). The Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject
to the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of _______, 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 Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
A2-1
<PAGE> 89
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of ____________, 199__.
NorAm Financing [I] [II]
By:________________________________
Name:
Title: Regular Trustee
A2-2
<PAGE> 90
[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 payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears, on [March 31, June 30,
September 30 and December 31 of each year, commencing on _______ __, 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
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-3
<PAGE> 91
The Common Securities shall be convertible into shares of
NorAm Common Stock, through (i) the exchange of Common 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.
A2-4
<PAGE> 92
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 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 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> 93
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 Identifying 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> 94
____________________
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> 95
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE> 96
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4.7
[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> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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 Succession 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 Certificates . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . 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 Institutional Trustee . . . . . . . . . . . . . . . . . . 54
SECTION 13.2 Representations and Warranties of Delaware 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
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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
</TABLE>
iv
<PAGE> 6
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
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)
</TABLE>
- ---------------
* 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> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NORAM FINANCING [I] [II]
____________, 1995
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of October __, 1995, by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the 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 governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE> 8
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in
this Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"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> 9
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means [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 Agreement]].
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"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> 10
"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.
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"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 Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex
I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Preferred
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
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Person. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate
has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement
to be dated as of ______, 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.
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"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 outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means NorAm Energy Corp., a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
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"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 outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement 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.
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(b) The Institutional Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by 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 Distributions, 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,
provided that neither the Sponsor nor the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most recent List of Holders given to the
Institutional Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Institutional Trustee. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity) provided that the
Institutional Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its
obligations under 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 Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Institutional Trustee
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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 required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation amount of the
Preferred Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly
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excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred Securities arising therefrom
shall be deemed to have been cured, for every purpose of this Declaration, but
no such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event
of Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority to
be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
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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 Indenture
by the Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of 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 Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.7(a)
being hereby defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment established for
the Debentures, the Institutional Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Institutional
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to
have knowledge of any default except:
(i) a default under Sections ____ and ____ of the
Indenture; or
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(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a Responsible Officer
of the Institutional Trustee charged with the administration of the
Declaration shall have actual knowledge.
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 necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal
income tax purposes as a grantor trust.
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
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Trust. In dealing with the Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Institutional Trustee Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities, and the issuance of Securities shall be limited
to a [one-time], simultaneous issuance of both Preferred Securities
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, prepared
by the Sponsor, to the New York Stock Exchange,
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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 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 Preferred Securities and
the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant notices to
the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may
be required of the Regular Trustees pursuant to the terms of the
Securities;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Institutional Trustee has the exclusive power to
bring such Legal Action;
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(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 incidental
to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its
election to defer payments of interest on the Debentures by extending
the interest payment period under the Indenture;
(n) to 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 existence is necessary to protect the
limited liability of the Holders of the Preferred Securities or to
enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees
determine in their discretion to be necessary or desirable in carrying
out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
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(ii) causing the Trust to be classified for
United States federal income tax purposes as a grantor trust;
and
(iii) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness of
the Debenture Issuer for United States federal income tax
purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all
applicable tax returns and tax information reports that are required
to be filed with respect to the Trust to be duly prepared and filed by
the Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust
set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including
the Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust
not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than as expressly provided
herein;
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(iii) possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as provided in this Amended and Restated
Declaration or Annex I, (A) direct the time, method and place of
exercising any trust or power conferred upon the Debenture Trustee
with respect to the Debentures, (B) waive any past default that is
waivable under the Indenture, (C) exercise any right to rescind or
annul any declaration that the principal of all the Debentures shall
be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent
shall be required unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause more than
an insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by
and held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.7. 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")
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in the name of and under the exclusive control of the Institutional
Trustee on behalf of the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the
Institutional Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration. The Institutional Trustee
Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as that term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified circumstances
pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions
and perform such duties as may be specifically required of the Institutional
Trustee pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal
Action which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or the
Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a
Trustee unless either:
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(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been
appointed and has accepted that appointment in accordance with Section
5.7.
(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 Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of such Securities.
(h) 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 Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise
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such of the rights and powers vested in it by this Declaration, and use the
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed
to relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the
Institutional Trustee shall be determined solely by the
express provisions of this Declaration and the Institutional
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of
the Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the
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Institutional Trustee, or exercising any trust or power conferred upon
the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Institutional
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Institutional Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Institutional Trustee Account shall be to deal with
such property in a similar manner as the Institutional Trustee deals
with similar property for its own account, subject to the protections
and limitations on liability afforded to the Institutional Trustee
under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for
any interest on any money received by it except as it may otherwise
agree with the Sponsor. Money held by the Institutional Trustee need
not be segregated from other funds held by it except in relation to
the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
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SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel
or other experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in
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it by this Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Institutional Trustee
security and indemnity, reasonably satisfactory to the Institutional
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Institutional Trustee provided,
that, nothing contained in this Section 3.10(a)(vi) shall be taken to
relieve the Institutional Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in
it by this Declaration;
(vii) the Institutional Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Institutional Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees or attorneys
and the Institutional Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or
its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (i) may request
instructions from the Holders of the Securities which instructions may
only be given by the
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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 authority available to the
Institutional Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee described
in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, 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.
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SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 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 corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Securities, the Delaware Trustee or
the Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same
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powers and duties as the Institutional Trustee as the Holder of the
Debentures;
(iii) the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
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 (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the Preferred Securities as a
result of such merger, consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation
or replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and
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(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
Commission a registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than
actions which must be taken by the Trust, and advise the Trust of
actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of
any such States;
(c) to prepare for filing by the Trust an application
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
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(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the 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 Securities,
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 requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
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(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
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall
cease to be eligible to so act under Section 5.3(a), the Institutional Trustee
shall immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
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(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 execute on behalf of the
Trust any documents which the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by a majority of the Regular Trustees; and
(c) 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:
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SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of
the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of the Common
Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall
not be removed in accordance with Section 5.7(a) until a Successor
Institutional Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.7(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 instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified therein; provided,
however, that:
(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
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(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use
their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if the Institutional Trustee
or the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor
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 resignation, the resigning Institutional Trustee or
Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall
be liable for the acts or omissions to act of any Successor Institutional
Trustee or successor Delaware Trustee, as the case may be.
SECTION 5.8 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 evidence 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, bankruptcy,
dissolution, liquidation, incompetence or incapacity to
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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 Declaration.
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
lawfully called or convened. Unless provided otherwise in this Declaration,
any action of the Regular Trustees may be taken at a meeting by vote of a
majority of the Regular Trustees present (whether in person or by telephone)
and eligible to vote with respect to such matter, provided that a Quorum is
present, or without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all action
of such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.11 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
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(b) the Regular Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 5.12 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 Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust
issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I (the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities.") The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the
Trust by a Regular Trustee. Such signature shall be the manual signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration
any such person was not such a Regular Trustee. Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other 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
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with the terms of this Declaration, shall be deemed to have expressly assented
and agreed to the terms of, and shall be bound by, this Declaration.
SECTION 7.2 Paying Agent.
In the event that the Preferred Securities are not in
book-entry only form, the Trust shall maintain in the Borough of Manhattan,
City of New York, State of New York, an office or agency where the Preferred
Securities may be presented for payment ("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 Institutional
Trustee shall act as such. The Trust or any of its Affiliates may act as
Paying Agent. The Trust shall initially act as Paying Agent for the Preferred
Securities and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall 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 dissolution
of the Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called
for redemp-
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tion and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures
endorsed thereon shall have been distributed to the Holders of
Securities in exchange for all of the Securities; or
(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 transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities
shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any
Related Party may only transfer Common Securities to the Sponsor or a Related
Party of the Sponsor; provided that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
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SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will
be issued in the form of one or more, fully registered, global Preferred
Security Certificates (each a "Global Certificate"), to be delivered to DTC,
the initial Clearing Agency, by, or on behalf of, the Trust. Such Global
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 Preferred Security
Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 9.7. Unless and until
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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 consents 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
Owners;
(c) to the extent that the provisions of this Section
9.4 conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until
Definitive Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7, the Regular
Trustees shall give all such notices and communications specified herein to be
given to the Preferred Security Holders to the Clearing Agency, and shall have
no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
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SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Preferred
Securities and a successor Clearing Agency is not appointed within 90
days after such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book entry system through the Clearing
Agency with respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect
to such Preferred Securities; and
(d) upon surrender of the Global 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, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Preferred
Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to
the Regular Trustees, or if the Regular Trustees shall
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receive evidence to their satisfaction of the destruction, loss or
theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep each of
them harmless.
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration,
the 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
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private corporations for profit organized under the General Corporation Law
of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Institutional Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace
such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
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(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The 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-
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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, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The 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
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person
shall be successful on the merits or otherwise (including dismissal of
an action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii)
of this Section 10.4(a) (unless ordered by a court) shall be made by
the Debenture Issuer only as authorized in the specific case upon a
determination that indemnification
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of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1) by the
Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the 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 Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person
did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or
Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust
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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 Debenture 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 (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The 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, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in
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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 interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Institutional Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect
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in reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance with
generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined
by and reported upon as of the end of each Fiscal Year of the Trust by a firm
of independent certified public accountants selected by the Regular Trustees.
(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
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder
as is required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Institutional Trustee shall be
made directly to the Institutional Trustee Account and no other funds of the
Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Institutional Trustee shall designate the
signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
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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 purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Offi-
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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 Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have 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 (including 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 Declaration (including
the terms of the Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Institutional Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) at such time after the Trust has issued any
Securities that remain outstanding, any amendment that would adversely affect
the rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in the
terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities
and;
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(f) the rights of the holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration
may be amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations
of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the right,
preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of
the Amended Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration,
the terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of Securities.
Such direction shall be given by delivering to the Regular Trustees one or more
calls in a writing stating that the signing Holders of Securities wish to call
a meeting and indicating the general or specific purpose for which the meeting
is to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be
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counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least 7
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be taken at a meeting
of the Holders of Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to authorize
or take such action at a meeting at which all Holders of Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person
to act for it by proxy on all matters in which a Holder of Securities
is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting
or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
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(iii) each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the listing
rules of any stock exchange on which the Preferred Securities are then
listed or trading, otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any 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 deliver, 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,
reorganization, moratorium, insolvency, and other similar laws
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affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the
Declaration by the Institutional Trustee does not conflict with or
constitute a breach of the Articles of Organization or By-laws of the
Institutional Trustee; and
(d) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the
Institutional Trustee, of the Declaration.
(e) the Institutional Trustee, pursuant to this
Declaration, shall hold legal title and a valid ownership interest in
the Debentures.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents 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
corporation with trust powers, duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform
its obligations under the Certificate of Trust and the Declaration.
The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
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(c) No consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the Delaware
Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular
Trustees at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders of the
Securities):
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 Securities):
[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):
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(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 delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
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
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<PAGE> 64
and inure to the benefit of their respective successors and assigns, whether so
expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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<PAGE> 65
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
Institutional Trustee
By:____________________________
Name:
Title:
NorAm Energy Corp., as Sponsor
By:____________________________
Name:
Title:
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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, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. [ ] 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 $25 per preferred
security, are hereby designated for the purposes of identification only as
_____% Trust Preferred Securities (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. [ ] Common
Securities of the Trust with an aggregate liquidation amount with respect to
the assets of the Trust of [ ] dollars ($[ ]) 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.
<PAGE> 67
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 distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative,
will accrue from ________, 1995, and will be payable quarterly in arrears, on
[March 31, June 30, September 30, and December 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 "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the date of maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
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(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities remain in book-entry
only form, the relevant record dates shall be one Business Day prior to the
relevant payment dates which payment dates correspond to the interest payment
dates on the Debentures. Subject to any applicable laws and regulations and
the provisions of the Declaration, each such payment in respect of the
Preferred Securities will be made as described under the heading "Description
of the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the Prospectus Supplement dated______, 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 Preferred
Securities. If the Preferred Securities shall not continue to remain in
book-entry only form, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least one Business Day but less than 60 Business Days before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on the special
record date or other specified date determined in accordance with the
Indenture. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders of
the Securities.
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3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution
to Holders of Securities after satisfaction of liabilities of creditors an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Securities, with an interest rate equal to the Coupon Rate of, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Securities, shall be distributed on a Pro Rata basis to
the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in
part, whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Special Event as described below), the
proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption price
of $25 per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the "Redemption
Price"). Holders will be given not less than 30 nor more than 60 days notice
of such redemption.
(b) If fewer than all the outstanding Securities are to
be so redeemed, the Common Securities and the Preferred Securities will be
redeemed Pro Rata and the Preferred Securities to be redeemed will be as
described in Section 4(f)(ii) below.
(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
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this Section 4(c), dissolve the Trust and, after satisfaction of creditors,
cause Debentures held by the Institutional Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on, and having the same record date
for payment as the Securities, to be distributed to the Holders of the
Securities in liquidation of such Holders' interests in the Trust on a Pro Rata
basis, within 90 days following the occurrence of such Special Event (the "90
Day Period"); provided, however, that, as a condition of such dissolution and
distribution, the Regular Trustees shall have received an opinion of a
nationally recognized independent tax counsel experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution
of Debentures, and provided, further, that, if at the time there is available
to the Trust the opportunity to eliminate, within the 90 Day Period, the
Special Event by taking some ministerial action, such as filing a form or
making an election, or pursuing some other similar reasonable measure that has
no adverse effect on the Trust, the Debenture Issuer, the Sponsor or the
Holders of the Securities ("Ministerial Action"), the Trust will pursue such
Ministerial Action in lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax
Event Opinion (as defined hereinafter) by the Regular Trustees, the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even if the Debentures
were distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) 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 Debenture Issuer shall have the
right at any time, upon not less than 30 nor more than 60 days notice, to
redeem the Debentures in whole or in part for cash within 90 days following the
occurrence of such 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-
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<PAGE> 71
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 Supplement, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after the date of the Prospectus Supplement, there is
more than an insubstantial risk that (i) the Trust is or will be within 90 days
of the date thereof, subject to United States federal income tax with respect
to interest accrued or received on the Debentures, (ii) the Trust is, or will
be within 90 days of the date thereof, subject to more than a de minimis amount
of taxes, duties or other governmental charges, or (iii) interest payable by
the Debenture Issuer to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the
Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") that, as a result of the occurrence of a change in law
or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is a more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after the date of the Prospectus
Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee
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(or any successor Clearing Agency or its nominee), as the record Holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and any certificates representing Securities, except for certificates
representing Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the
outstanding Securities unless all accrued and unpaid Distributions have been
paid on all Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) If the Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
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<PAGE> 73
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Preferred Securities, it being
understood that, in respect of Preferred Securities registered in the
name of and held of record by the Depository or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to each
Clearing Agency Participant (or Person on whose behalf such nominee
holds such securities) in accordance with the procedures applied by
such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may only be issued if
the Debentures are redeemed as set out in this Section 4 (which notice
will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by
12:00 noon, New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Institutional Trustee a sufficient
amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will deposit irrevocably
with the Depository or its nominee (or successor Clearing Agency or
its nominee) funds sufficient to pay the applicable Redemption Price
with respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee
a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check
mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accrue on the
Securities 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
8
<PAGE> 74
Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not
paid either by the Institutional Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions
on such Securities will continue to accrue from the original
redemption date to the actual date of payment, in which case the
actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if 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
(including, without limitation, United States federal securities
laws), provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor or any of
its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this
paragraph, the Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the
9
<PAGE> 75
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 consent under the Indenture would require the consent or act of the Holders
of greater than a majority of the Holders in principal amount of Debentures
affected thereby, (a "Super Majority"), the Institutional Trustee may only give
such consent or take such action at the written direction of the Holders of at
least the proportion in liquidation amount of the Preferred Securities which
the relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. The Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Institutional Trustee or the Debenture
Trustee as set forth above, the Institutional Trustee shall not take any action
in accordance with the directions of the Holders of the Preferred Securities
under this paragraph unless the Institutional Trustee has obtained an opinion
of tax counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust on
account of such action. If 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
Trustee's rights under the Declaration without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of NorAm to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder on or after the respective due date
specified in the Debentures. Except as provided in the preceding sentence, the
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at
10
<PAGE> 76
which Holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned by the Sponsor or any Affiliate of
the Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
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 Securities has been
cured, waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may
direct the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under Section ____ of the
Indenture, or (iii) exercise any right to rescind or
11
<PAGE> 77
annul a declaration that the principal of all the Debentures shall be due and
payable, provided that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Pursuant to this
Section 6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Institutional Trustee or the Debenture Trustee as
set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. 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 Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
12
<PAGE> 78
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of
the Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional Trustee
as the holder of the Debentures is required under the Indenture with respect to
any amendment, modification or termination on the Indenture or the Debentures,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require the consent of the holders of greater than a majority in
aggregate principal amount of the Debentures (a "Super Majority"), the
Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding; provided, further, that the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified
as other than a grantor trust on account of such action.
13
<PAGE> 79
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
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
14
<PAGE> 80
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.
15
<PAGE> 81
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Preferred Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
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> 82
tered owner of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated 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 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 Preferred Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Preferred Securities Guarantee and the Indenture to
a Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
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]
A1-2
<PAGE> 83
___________________________________
[Name of Regular Trustee]
A1-3
<PAGE> 84
[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. Distributions in arrears for more than one quarter will
bear interest thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
Except as otherwise described below,
distributions on the Preferred Securities will be cumulative, will accrue from
the date of original issuance and will be payable quarterly in arrears, on
[March 31, June 30, September 30 and December 31 of each year, commencing on
______ __, 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 "Extension Period") and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
A1-4
<PAGE> 85
The Preferred Securities shall be
redeemable as provided in the Declaration.
A1-5
<PAGE> 86
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert assignee's social security or tax identification number)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A1-6
<PAGE> 87
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 designated 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 transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of _______, 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 Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebted-
A2-1
<PAGE> 88
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> 89
[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 payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
Except as otherwise described below,
distributions on the Common Securities will be cumulative, will accrue from the
date of original issuance and will be payable quarterly in arrears, on [March
31, June 30, September 30 and December 31 of each year, commencing on ______
__, 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
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
A2-3
<PAGE> 90
The Common Securities shall be
redeemable as provided in the Declaration.
A2-4
<PAGE> 91
_____________________
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> 92
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE> 93
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4.8
FORM OF INDENTURE
================================================================================
NORAM ENERGY CORP.
AND
___________________,
Trustee
______________________________________
INDENTURE
Dated as of ________, 1995
_______________________________________
Subordinated Debt Securities
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
- ------------------- ---------
<S> <C>
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
</TABLE>
____________________
* 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 provisions.
<PAGE> 3
TABLE OF CONTENTS*
ARTICLE I.
DEFINITIONS
<TABLE>
<S> <C>
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
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
___________________
* 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 provisions.
i
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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 Certificate . . . . . . . . . . . . . . . . . . . . . . 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 Sinking Fund . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
</TABLE>
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SECTION 4.1. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . 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 Provisions . . . . . . . . . . . . . . . . . . . . . . . . 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
</TABLE>
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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 Indentures . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.5. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
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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 Trustee . . . . . . . . . . . . . . . . . . . . . . . 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
</TABLE>
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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
</TABLE>
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<PAGE> 9
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 securities (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 delivered, 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 or unless the context otherwise
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act and in
<PAGE> 10
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 partnership 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 specified
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 certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
"Business Day" 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 principal
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.
"Common Securities" means undivided beneficial interests in
the assets of a NorAm Trust which rank pari passu with Preferred Securities
issued by such NorAm Trust; provided,
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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 provision 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 authenticated 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 Securities will be issued as a
Global Security, The Depository Trust 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,
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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, continued 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 custodian for the account of the
holder of such depositary receipt; provided, however, that (except as required
by law) such custodian 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 Obligation 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 executed or as
it may from time to time be supplemented or amended 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.
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"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 from 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 liquidation, 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 reclassifications.
"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 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.
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"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 Securities 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 previously been
cancelled; (b) Debt Securities or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent); provided,
however, that if such 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 Securities in
lieu of or in substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.7.
"Person" means any individual, corporation, partnership,
joint-venture, joint-stock company, unincorporated organization 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 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
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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 President, 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 familiarity 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 agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
such obligor for the reimbursement on any letter of credit, banker's
acceptance, 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 otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) of other Persons secured by any lien on any
property or asset of such obligor (whether or not such obligation is assumed by
such obligor), except for (1) any such indebtedness
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that is by its terms subordinated to or pari passu with the Securities, and (2)
any indebtedness between or among such obligor 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 preferred 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 partnership, 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 Subsidiaries, 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.
"Trust Securities" means Common Securities and Preferred
Securities of a NorAm Trust.
"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.
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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 Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Debt Securities of that series);
(3) the date or dates on which the principal of the Debt
Securities of the series is payable;
(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 determination 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;
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(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 obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at
which, and the terms and conditions upon which, 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 denominations 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 Securities of that series;
(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, including 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 substantially
identical except as to denomination and except as may
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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 Certificate.
The Securities of any series and the Trustee's certificate of
authentication to be borne by such Securities shall be substantially of the
tenor and purpose 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.
The Securities shall be issuable as registered Securities 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 Securities shall be computed on
the basis of a 360-day year composed of twelve 30-day months.
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The interest installment on any Security that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the Person in whose name said
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment. In the
event 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 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 Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix
a special record date for the payment of such Defaulted Interest which
shall not be more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first
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class postage prepaid, to each Securityholder at his or her address as
it appears in the Security Register (as hereinafter defined), not less
than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record
date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names such 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 exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the 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 establishing 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 Interest Payment Date for such series shall mean either the
fifteenth day of the month immediately preceding the month in which an 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 immediately preceding the month in which an Interest Payment
Date established 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
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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 evidence that the Security so authenticated has
been duly authenticated 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 Securities of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company for the authentication and delivery of such
Securities, signed by its President or any Vice President and its Treasurer or
any Assistant 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 immunities under the Securities and
this Indenture or otherwise in a manner that is not reasonably acceptable to
the Trustee.
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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 authenticate and such office or agency shall deliver
in exchange therefor the Security or Securities of the same series that the
Securityholder 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 herein provided shall be appointed as authorized by Board
Resolution (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
authorized 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
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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 authenticate 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 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 conditions 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
authenticate 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
definitive Securities of such series authenticated and delivered hereunder.
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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 satisfaction of the
destruction, loss or theft of the applicant's Security and of the ownership
thereof. The Trustee may authenticate 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 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 contractual 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 hereunder. 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
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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 certificate of disposition to the Company. If the Company shall
otherwise acquire any of the Securities, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness 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
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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 reported or determined by it,
sufficient under the laws of any jurisdiction 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 authorities. If at any time any
Authenticating Agent shall cease to be eligible in accordance with these
provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee
may at any time (and upon request by the Company shall) terminate the agency of
any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. 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."
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(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
receives 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 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 Securities 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 determination by the Company, 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. 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 Securities in definitive registered form issued in exchange for
the Global Security pursuant to this Section 2.11(c) shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
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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 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
prepaid, 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 designated for redemption in whole or in part, or any defect in the
notice, shall not affect the validity of the proceedings for the redemption of
any other 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 restriction.
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 specified in said notice, that
from and after said date interest will
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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 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 redemption is to be given by
the Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as
the case may be, such 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
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notice shall become due and payable on the date and at the place stated in such
notice at the applicable redemption price, together with interest accrued to
the date fixed for redemption and interest on such 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 redemption
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 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 Securities 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.
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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 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 Sinking
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
Securities 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 redemption of such Debt Securities shall be
made upon the terms and in the manner stated in Section 3.3.
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ARTICLE IV.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.1. Payment of Principal, Premium and Interest.
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.
So long as any series of the Securities remain Outstanding,
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 locations 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 authorized 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 Trustee, 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
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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 failure by
the Company (or by any other obligor of such Securities) 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) 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 Trustee) 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
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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.
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 Provisions.
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 obligations under the Preferred Securities Guarantee or Common Securities
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; provided, however, that the restriction in clause (a) above does
not apply to any stock dividends
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paid by the Company where the dividend stock is the same as that on which the
dividend is being paid.
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 Securities 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 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 permitted by
the Declaration of such NorAm Trust, and (b) to otherwise continue not to be
treated 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 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
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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 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 furnished.
(c) Securityholders may communicate as provided in Section
312(b) of the Trust Indenture Act with other Securityholders 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 required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed
from to time by the Commission, such additional information, documents and
reports with respect to
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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 the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to subsections (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 Securities 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 installment of
interest upon any of the Securities of that
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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;
(2) the Company defaults in the payment of the principal of
(or premium, if any, on) any of the Securities of that series as and
when the same shall become due and payable whether at maturity, upon
redemption, by declaration or otherwise, or in any payment required by
any sinking or analogous fund established with respect to that series;
provided, however, that a valid extension of the maturity of such
Securities in accordance with the terms of any indenture 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 Resolution or other instrument
authorizing such series of Securities;
(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" hereunder, shall have been given
to the Company by the Trustee, by registered or certified mail, or to
the Company and the Trustee by the holders of at least 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
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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 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
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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 enforceable under applicable law, upon overdue
installments of interest, 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 consequent 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 proceedings had been taken.
SECTION 6.2. Collection of Indebtedness and Suits for
Enforcement by Trustee.
(a) The Company covenants 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 declaration or otherwise, then, upon demand of the
Trustee 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 enforceable
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under applicable law and, if the Securities are held by a NorAm Trust or a
trustee of such trust, without duplication of 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 addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, and the amount payable to the Trustee under
Section 7.6.
(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, liquidation,
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
otherwise provided by law) be entitled to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the
claims of the Trustee and of the holders of Securities of such series allowed
for the entire amount due and payable by the Company under the Indenture at the
date of institution 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
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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, arrangement, 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 collection and
of all amounts payable to the Trustee under Section 7.6;
SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article Fourteen; and
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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 reasonable 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 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
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availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other of such Securities, 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
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such 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.
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, determined 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 prejudicial to the rights
of holders of Securities of any other series at the time Outstanding determined
in accordance with Section
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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 established 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 preference 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 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
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litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, 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
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to 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:
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(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 implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to the Securities 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;
(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 available to the Trustee, or exercising any
trust or power conferred 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 performance of any of its duties
or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture
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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, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the President or any Vice
President and by the Secretary 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;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, 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
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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 investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
security, or other papers or documents, unless requested in writing 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.
SECTION 7.3. Trustee Not Responsible for Recitals or
Issuance or Securities.
(a) The recitals contained herein and in the Securities 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.
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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 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 expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. 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
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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.
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 Indenture 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 supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the
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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 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 provisions of
subsection (a) of Section 7.8 after written request therefor by the
Company or the Guarantor or by any Securityholder 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 accordance 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
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(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 Trustee 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 of the Trustee and the
appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the 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 Company.
(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 successor
trustee with respect to all Securities, every such successor trustee so
appointed shall execute, acknowledge and deliver to
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the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor trustee all
the rights, powers, and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor trustee relates, (2) 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,
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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 indenture, 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 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 corporation 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
corporation shall be qualified under the provisions of Section 7.8 and eligible
under the provisions of Section 7.9, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating
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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 described 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.
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 instrument 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 Securityholders 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 Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities of that series have authorized or agreed or consented
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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.
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 sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of
any instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of 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 necessary.
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 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.
SECTION 8.4. Certain Securities Owned by Company
Disregarded.
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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 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 specified 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 conclusive 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 thereof, 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.
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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 Securities, or to add to the rights of the holders
of any series of Securities.
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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 supplemental 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 liquidation 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 Debt Security is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities of the
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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
Indentures.
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.
SECTION 9.5. Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by their Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evi-
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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 supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into
such supplemental indenture. 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 be, or its
successor or successors as an entirety, or substantially 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
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of the Company, of the principal of (premium, if any) and interest 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 delivered 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 Company, as the case may be, with respect
to each series, such successor 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 thereupon the predecessor
corporation shall be relieved of all obligations 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 phraseology and form
(but not in substance) may be made in the Securities thereafter to be issued as
may be appropriate.
(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).
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SECTION 10.3. Evidence of Consolidation, Etc. to Trustee.
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 theretofore 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 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 with
respect to such series by the Company; then this Indenture shall thereupon
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,
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on demand of the Company and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction 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 irrevocably 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 Obligations, 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.
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.
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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 Obligations, 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
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution
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or statute, of, and any and all such rights and claims against, every such
incorporator, stockholder, officer or director as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities 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 agreements 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 Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful sole successor of the Company, 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 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
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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 purposes. 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 application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) 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
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
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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 succeeding Business Day
with the same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such nominal
date.
SECTION 13.9. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture
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 counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
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 construed
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,
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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 Securities held as the assets of such NorAm Trust
any holder of Preferred 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. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest or principal on
the applicable Series of Securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), the
Company acknowledges that a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the applicable Series of Securities having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Applicable Series of Securities.
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 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, premium, if
any, and interest on all Debt Securities issued hereunder
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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 principal (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 Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 14.3. 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
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Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the 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 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-
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nated at least to the extent provided in this Article XIV with respect to the
Debt Securities to the payment of all Senior Indebtedness 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
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article 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 Indebtedness 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 be paid in
full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness 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 Indebtedness. 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.
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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 Company, 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 anything 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 jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the 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 distributed 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 acceptance
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.
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<PAGE> 76
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, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such
date.
The Trustee, subject to the provisions of Section 7.1 of the
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company, as the case may be (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 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
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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 entitled 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 obligations 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 Indebtedness and, subject to the
provisions of Section 7.1 of the Indenture, 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
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the Debt Securities and without impairing or releasing the subordination
provided in this Article XIV or the obligations hereunder 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 Indebtedness or any
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, 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.
NORAM ENERGY CORP.
By ____________________________________
Attest:
By _________________________________
[ ]
as Trustee
By ____________________________________
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STATE OF )
COUNTY OF ) ss.:
On the ____ day of ________________, 1995, before me personally 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 Directors of said
corporation, and that he signed his name thereto by like authority.
________________________________________
NOTARY PUBLIC
[seal] Commission expires
________________________________________
NOTARY PUBLIC
[seal]
Commission expires
71
<PAGE> 1
EXHIBIT 4.9
[FORM OF SUPPLEMENTAL
INDENTURE FOR CONVERTIBLE
SECURITIES]
====================================
FIRST SUPPLEMENTAL INDENTURE
between
NorAm Energy Corp.
and
The Bank of New York
Dated as of _______ __, 1995
=====================================
<PAGE> 2
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
SECTION 7.2. Conversion Procedures . . . . . . . . . . . . . . 13
SECTION 7.3. Conversion Price Adjustments. . . . . . . . . . . 16
SECTION 7.4. Reclassification, Consolidation, Merger
or Sale of Assets . . . . . . . . . . . . . . . . 21
i
<PAGE> 3
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
ii
<PAGE> 4
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 Indenture 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 delivered
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 Debentures"), 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 Indenture;
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 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 Convertible Debentures by the Holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Convertible Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
<PAGE> 5
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) Institutional 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.
"Declaration" means the Amended and Restated Declaration 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-
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rtible Debentures held by the Institutional Trustee are to be distributed to
the holders of the Trust Securities issued by the Trust pro ratain 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 agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
such obligor for the reimbursement on any letter of credit, banker's
acceptance, 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 otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) of other Persons secured by any lien on any
property or asset of such 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 guarantees in respect of those debt securities, issued to (y)
any other Noram Capital Financing Trust or (z) any other trust, or a
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trustee of such trust, partnership or other entity affiliatedwith 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 securities.
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 $___ million, 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;
(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 provided 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
Securities 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;
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(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
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 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 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 Convertible Debentures
shall be issued in fully registered certificated form without interest coupons.
Principal and interest on the Convertible 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
Convertible 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 Convertible Debentures is the Institutional Trustee, 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 Debenture"), to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant
to the instructions of the 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
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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 Securities 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 liquidation amount
of the Non Book-Entry Convertible Preferred Securities until such
Convertible Preferred Security Certificates 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 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
authentication and delivery in accordance with the Indenture and this
First Supplemental Indenture. On issue of such Convertible
Debentures, Convertible Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to
the Trustee will be deemed to have been cancelled.
(b) 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 Indenture, 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
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the Global Debenture in exchange for such Global Debenture. In addition, the
Company may at any time determine that the Convertible 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 authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
SECTION 2.5. Interest.
(a) Each 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,
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 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) Convertible
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 Convertible 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
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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 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 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,
assessments 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 Convertible 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
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"Redemption Price"), provided that if at the time there is available to the
Company the opportunity to eliminate, within the 90-Day Period, the Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a form
or making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Trust or the Holders of the Trust
Securities issued by the Trust, the Company shall pursue such Ministerial
Action in lieu of redemption, and, provided, further, that the Company shall
have no right to redeem the Convertible Debentures while the Trust is pursuing
any Ministerial Action pursuant to its obligations under the Declaration. The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York time, on the date such Redemption
Price is to be paid.
SECTION 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to
the provisions of Article [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 Con- vertible 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
Redemption 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 Debentures
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
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effect such partial redemption and may only redeem the Convertible Debentures
in whole.
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 Debentures, 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
Convertible 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 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 registered
Holder of the Convertible Debentures at the time the Company selects an
Extended Interest Payment Period, the Company
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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 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 acquisitions of shares of its
common stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security requiring the Company
to purchase shares of its common stock, (ii) as a result of a reclassification
of its capital stock or the exchange or conversion of one class or series of
its capital stock for another class or series of its capital stock or, (iii)
the purchase of fractional interests in shares of its capital stock pursuant to
the conversion or exchange provisions of such capital stock or security being
converted or exchanged) or make any guarantee payment with respect thereto 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
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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 offering,
sale and issuance of the Convertible Debentures, including commissions to the
underwriters payable pursuant to the Underwriting 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 (including,
but not limited to, costs and expenses relating to the organization of the
Trust, 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, removal or resignation. Upon termination of the Declaration
or the removal or resignation of the Delaware Trustee or the Institutional
Trustee, as the case may be, pursuant to Section 5.6 of
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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 Preferred 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 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 nonassessable 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
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forth the principal amount of Convertible Debentures to be converted, 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 Convertible 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, surrendering 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
Conversion 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 Date, the Holder will
be entitled to receive the interest payable on the subsequent Interest Payment
Date on the portion of Convertible 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 conversion 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 received (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 conversion 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
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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 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 Convertible 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 conversion 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.
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<PAGE> 19
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 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 established 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 Convertible 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
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<PAGE> 20
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 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 Conversion 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 referred
to in subparagraph (a) of this Section 7.3), 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 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 evidences 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 Reference 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
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<PAGE> 21
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 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
distribution 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 required 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 subparagraph 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 subparagraph (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 determined 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 reduction 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
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<PAGE> 22
ment, adequate provision shall be made so that each Holder of shares of
Convertible Debentures shall have the right to receive upon conversion the
amount of cash such Holder would have received had such Holder converted each
share of the Convertible Debentures immediately prior to the record date for
the distribution of the cash. 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 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 subparagraph (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 (determined as provided in subparagraph (f)) of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction 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
subparagraphs (b), (c), (d) or (e), the current market price per share 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
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<PAGE> 23
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 distribution, 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
conversion 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, however, that any adjustments
which by reason of this subparagraph are not required to be made shall be
carried forward and taken into account in determining whether any subsequent
adjustment 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
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<PAGE> 24
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 recapitalization 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 combination 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 Company), (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 certificate 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 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 Financial Officer or
the Treasurer of the Company setting forth the adjusted conversion price and
showing in reasonable detail the
21
<PAGE> 25
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 dividend 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 consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company shall be required, or 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 Securities 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
22
<PAGE> 26
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, distribution, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, 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, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity 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 exercisable, exchangeable or
convertible security outstanding as of the 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 exchangeable for stock) of the Company except as
specifically described 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, dividends 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 receive 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
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<PAGE> 27
indebtedness, shares of capital stock, cash and assets so distributed
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 distribution
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 resolution of the Board of Directors). If any conversion of Convertible
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 converted 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 distribute 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, provided, 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, 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 respect 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 payment 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 conversion.
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<PAGE> 28
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. Form of Convertible Debenture.
The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially 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 registered in the name of a Depositary
or a nominee of a Depositary. This Debenture is exchangeable for Convertible
Debentures registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Debenture (other than a transfer of this Debenture as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]
No. ______________________________
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
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<PAGE> 29
"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 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 Convertible Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this 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 business 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 Debenture (or one or
more Predecessor Securities) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered Holders of
this series of Convertible 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
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 Debenture shall
be payable at the office or agency of the Trustee maintained for that purpose
in any coin or currency of the United States of America that at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered Holder at such address as shall
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<PAGE> 30
appear in the Security Register. Notwithstanding the foregoing, so long as the
Holder of this Convertible Debenture is the Institutional 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 Debenture is,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
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) 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 hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This 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 continued on
the reverse side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated ____________________________
NORAM ENERGY CORP.
By:______________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
27
<PAGE> 31
[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 executed and delivered between the Company and
_________________, 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
Convertible Debentures. 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 Supplemental 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 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. 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 certain circumstances upon the occurrence of a
Tax Event, at a redemption price equal to 100% of the principal amount plus any
28
<PAGE> 32
accrued but unpaid interest, 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 Convertible 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 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 the principal
amount of such Convertible Debentures held by each Debentureholder to be
redeemed in accordance with its procedures.
In the event of redemption of this Convertible Debenture 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 Indenture,
shall have occurred and be continuing, the principal of all of the Convertible
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 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 indenture, 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,
29
<PAGE> 33
if any, or interest on any of the Convertible Debentures of such series. Any
such consent or waiver by the registered Holder of 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 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 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 Register of the Company, upon
surrender of this Convertible 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 instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Convertible
Debentures of authorized denominations and for the same aggregate principal
amount and series will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
30
<PAGE> 34
Prior to due presentment for registration of transfer of this
Convertible 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 Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this 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, 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 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 adjustment under
certain circumstances, except that if a Convertible 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 transfer 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 Convertible
Debenture, when surrendered for conversion, need not be
31
<PAGE> 35
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the portion so converted. The number of shares
issuable upon conversion of a Convertible Debenture 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 converted 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 exchangeable for a like aggregate principal amount
of Convertible Debentures 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.
32
<PAGE> 36
[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 Convertible 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, 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.
Date: ____________, ____
in whole __
Portions of Security to be converted
($25 or integral multiples
-thereof): $_________________
_______________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code,
and Social Security or Other
Identifying Number
________________________________________________
________________________________________________
________________________________________________
Signature Guarantee:1 __________________________
33
<PAGE> 37
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 Supplemental 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 Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 10.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
SECTION 10.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be
deemed to be a contract made under the internal laws of the State of 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 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
34
<PAGE> 38
First Supplemental Indenture or of the Convertible Debentures, but this First
Supplemental Indenture and the Convertible Debentures shall be construed as if
such invalid or illegal or unenforceable 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.
35
<PAGE> 39
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:______________________
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.
36
<PAGE> 1
EXHIBIT 4.10
[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> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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
SECTION 6.7. Rights of the Trustee; Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . 16
SECTION 6.8. Subordination May Not Be Impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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
</TABLE>
ii
<PAGE> 4
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 Indenture 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 delivered
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
proceeds 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> 5
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 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.
"Declaration" means the Amended and Restated Declaration 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 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.
2
<PAGE> 6
"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 agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
such obligor for the reimbursement on any letter of credit, banker's
acceptance, 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 otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) of other Persons secured by any lien on any
property or asset of such 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 obligor 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
3
<PAGE> 7
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 provided 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
Securities 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;
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<PAGE> 8
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 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 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 Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Institutional Trustee, the payment of the principal of and interest (including
Compounded Interest and Additional Interest, if any) on such Debentures held by
the Institutional Trustee will be made at such place and to such account as may
be designated by the Institutional Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee in exchange for
a global Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Debentures (a "Global
Debenture"), to be registered in the name of the Depositary, or its
nominee, and delivered by the Trustee to the Depositary for crediting
to the accounts of its participants pursuant to the instructions of
the 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
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<PAGE> 9
Debentures issued as a Global Debenture will be made to the
Depositary; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated form may
be presented to the Trustee by the Institutional Trustee and any
Preferred Security Certificate which represents Preferred Securities
other than Preferred Securities held by the Clearing Agency or its
nominee ("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Debentures presented to the Trustee
by the Institutional Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance at
which time such Preferred Security Certificates will be cancelled and
a Debenture, registered in the name of the holder of the Preferred
Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance
with the Indenture and this First Supplemental Indenture. On issue of
such Debentures, Debentures with an equivalent aggregate principal
amount that were presented by the Institutional Trustee to the Trustee
will be deemed to have been cancelled.
(b) 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 Indenture, the Trustee, upon
written notice from the Company, will authenticate and deliver the Debentures
in definitive registered form without coupons, in authorized denominations, and
in an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. In addition, the Company may
at any time determine that the Debentures shall no longer be represented by a
Global Debenture. In such event the Company will execute, and subject to
Section [2.05] of the Indenture, the Trustee, upon receipt of an Officers
Certifi-
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<PAGE> 10
cate evidencing such determination by the Company, will authenticate and
deliver the Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such Global Debenture.
Upon the exchange of the Global Debenture for such Debentures in definitive
registered form without coupons, in authorized denominations, the Global
Debenture shall be cancelled by the Trustee. Such Debentures in definitive
registered form issued in exchange for the Global Debenture shall be registered
in such names and in such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest at the rate of ___%
per annum (the "Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
on any overdue installment of interest at the Coupon Rate, compounded
quarterly, payable (subject to the provisions of Article 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
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<PAGE> 11
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(c) If, at any time while the Institutional Trustee is
the Holder of any Debentures, the Trust or the Institutional Trustee is
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
any other taxing authority, then, in any case, the Company will pay as
additional interest ("Additional Interest") on the Debentures held by the
Institutional Trustee, such additional amounts as shall be required so that the
net amounts received and retained by the Trust and the Institutional Trustee
after paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust and the Institutional Trustee would have
received had no such taxes, duties, assessments or other government charges
been imposed.
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 Debentures to redeem the Debentures, in whole or in part,
for cash within 90 days following the occurrence of such Tax Event (the "90 Day
Period") at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon to the date of such
redemption (the "Redemption Price"), provided that if at the time there is
available to the Company the opportunity to eliminate, within the 90 Day
Period, the Tax Event by taking some ministerial action ("Ministerial Action"),
such as filing a form or making an election, or pursuing some other similar
reasonable measure which has no adverse effect on the Company, the Trust or the
Holders of the Trust Securities issued by the Trust, the Company shall pursue
such Ministerial
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<PAGE> 12
Action in lieu of redemption, and, provided, further, that the Company shall
have no right to redeem the Debentures while the Trust is pursuing any
Ministerial Action pursuant to its obligations under the Declaration. The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York time, on the date such Redemption
Price is to be paid.
SECTION 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to
the provisions of Article [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 redemption pursuant
to this paragraph will be made upon not less than 30 days nor more than 60 days
notice to the Holder of the Debentures, at the Optional Redemption Price. If
the Debentures are only partially redeemed pursuant to this Section 3.2, the
Debentures will be redeemed pro rata or by lot or by any other method utilized
by the Trustee; provided, that if at the time of redemption the Debentures are
registered as a Global Debenture, the Depositary shall determine, in accordance
with its procedures, the 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 Redemption Price
is to be paid.
(b) If a partial redemption of the Debentures would
result in the delisting of the Preferred Securities issued by the Trust from
any national securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Debentures in whole.
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
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<PAGE> 13
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to
time during the term of the Debentures, to defer payments of interest by
extending the interest payment period of such Debentures for a period not
exceeding 20 consecutive quarters (the "Extended Interest Payment Period"),
during which Extended Interest Payment Period no interest shall be due and
payable; provided that no Extended Interest Payment Period may extend beyond
the Maturity Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest
(together, "Deferred Interest") that shall be payable to the Holders of the
Debentures in whose names the Debentures are registered in the Security
Register on the first record date after the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period, provided that such period
together with all such further extensions thereof shall not exceed 20
consecutive quarters, or extend beyond the maturity date of the Debentures.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only registered
Holder of the Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the Regular Trustees,
the Institutional Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by the
Trust are payable, or (ii) the date the Trust is required to give notice of the
record date, or the date such Distributions are payable, to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Preferred
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<PAGE> 14
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Institutional Trustee is not the only Holder
of the Debentures at the time the Company selects an Extended Interest Payment
Period, the Company shall give the Holders of the Debentures and the Trustee
written notice of its selection of such Extended Interest Payment Period 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
Section 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1, or (ii) there shall have occurred any
Event of Default, as defined in the Indenture, then (a) the Company shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of its
common stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security requiring the Company
to purchase shares of its common stock, (ii) as a result of a reclassification
of its capital stock or the exchange or conversion of one class or series of
its capital for another class or series of its capital stock or, (iii) the
purchase of fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or security being
converted or exchanged) or make any guarantee payment with respect thereto 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.
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<PAGE> 15
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the
Debentures to the Institutional Trustee and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering,
sale and issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting 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 (including,
but not limited to, costs and expenses relating to the organization of the
Trust, the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and expenses
of the Institutional Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing, and disposition of Trust
assets);
(c) be primarily liable for any indemnification
obligations arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
Section 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to this Section
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 Institutional
Trustee, as the case may be, pursuant to Section 5.6 of the Declaration, the
Company shall pay to the Delaware Trustee or
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<PAGE> 16
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 Debenture 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 Preferrted Securities are then
listed.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1 Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING -- This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a person
other than the Depositary or a nominee of a Depositary. This Debenture is
exchangeable for Debentures registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since
the registered ownere hereof, Cede & Co., has an interest herein.]
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<PAGE> 17
No. ______________________________
NORAM ENERGY CORP.
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 20[44]
NorAm 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 interest
is enforceable under applicable law) on any overdue installment of interest at
the same rate per annum compounded quarterly. The amount of interest payable
on any Interest Payment Date shall be computed on the basis of a 360-day year
of twelve 30-day months. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the regular record
date for such interest installment. [which shall be the close of business on
the business day next preceding such Interest Payment Date unless otherwise
provided in the Indenture] [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE
THE DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL DEBENTURE -- which shall
be the close of business on the ____ 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
Debenture (or one or more Predecessor Securi-
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<PAGE> 18
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 registered Holder at such address as shall
appear in the Security Register. Notwithstanding the foregoing, so long as the
Holder of this Debenture is the Institutional Trustee, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at such place and to such account as may be designated by the Institutional
Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each Holder hereof, by his
or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
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<PAGE> 19
IN WITNESS WHEREOF, the Company has caused this instrument 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 Debentures
described in the within-mentioned Indenture.
[ ]
or as Authentication Agent
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
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<PAGE> 20
and in other respects as provided in the Indenture. This series of Debentures
is limited in aggregate principal amount as specified 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
determines. 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 "Optional 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 interest, 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 Debentures held by each Debentureholder to be
redeemed in accordance with its procedures.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Debentures
may be declared, and upon such declaration shall become, due and payable, in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental indenture shall
(i) 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
17
<PAGE> 21
thereof, without the consent of the Holder of each Debenture so affected, or
(ii) reduce the aforesaid percentage of Debentures, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of each Debenture then outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of such series, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture
with respect to such series, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on any of the
Debentures of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.
The Company shall have the right at any time during the term
of the Debentures and from time to time to extend the interest payment period
of such Debentures for up to 20 consecutive quarters (an "Extended Interest
Payment Period"), at the end of which period the Company shall pay all interest
then accrued and unpaid (together with 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 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 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-
18
<PAGE> 22
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 aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
[The Debentures of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
thereof.] [This Global Debenture is exchangeable for Debentures in definitive
form only under certain limited circumstances set forth in the Indenture.
Debentures of this series so issued are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof.] As
provided in the Indenture and subject to certain limitations [herein and]
therein set forth, Debentures of this series [so issued] are exchangeable for a
like aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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<PAGE> 23
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 Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures to or upon the written order
of the Company, signed by its Chairman, its Vice Chairman, its President, 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 Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 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.
20
<PAGE> 24
SECTION 9.5. 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.
21
<PAGE> 25
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:___________________
22
<PAGE> 1
EXHIBIT 4.15
[FORM OF PREFERRED
SECURITIES GUARANTEE]
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NorAm Financing [I] [II]
Dated as of October __, 1995
====================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C> <C>
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 Trustee . . . . . . . . . . . . . . . . . . . . . . . . 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 Guarantee 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
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<TABLE>
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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
</TABLE>
ii
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of October __, 1995, is executed and delivered by NorAm
Energy Corp., a Delaware corporation (the "Guarantor"), 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 Declaration 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 beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof [ ]
preferred securities, having an aggregate liquidation amount of $[ ],
designated the _____% Trust Originated Preferred Securities (the "Preferred
Securities");
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
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> 5
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 Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(c) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee"
are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections
of this Preferred Securities Guarantee, unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities
Guarantee, unless otherwise defined in this Preferred
Securities Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"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.
"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
2
<PAGE> 6
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 execution 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 Institutional Trustee (as
defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution"). If an event of default under
the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any
3
<PAGE> 7
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 otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorpo-
4
<PAGE> 8
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 performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred Securities
("List of Holders") as of such date, (i) within 1 Business Day after January 1
and June 30 of each year, and (ii) at any other time within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee provided, that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Preferred Guarantee Trustee
5
<PAGE> 9
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 Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event 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.
6
<PAGE> 10
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices of all
Events of Default actually known to a Responsible Officer of the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, the Preferred Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or 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 of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee
shall automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and
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<PAGE> 11
is continuing, the Preferred Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred
Securities.
(c) The Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee
shall be construed to relieve the Preferred Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements
of this Preferred Securities Guarantee; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine
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<PAGE> 12
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, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by
a Direction 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
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<PAGE> 13
before taking, suffering or omitting any action hereunder, the
Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve th
Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
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<PAGE> 14
(viii) The Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee Trustee or
its agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the
authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by
the Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such
instructions.
(b) No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Preferred Guarantee Trustee shall be construed to
be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
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<PAGE> 15
ARTICLE IV
Preferred Guarantee TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
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(c) The Preferred Guarantee Trustee appointed to office
shall hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee
all amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any
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<PAGE> 17
right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer
of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures or any extension of the
maturity date of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
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<PAGE> 18
a guarantor, it being the intent of this Section 5.3 that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) Any Holder of Preferred Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under
this Preferred Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee
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<PAGE> 19
Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Guarantor which rank pari passu with or junior to the Debentures
or (c) the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee
Agreement); 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.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, (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 Preferred 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
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<PAGE> 20
the Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any Holder of Preferred Securities must restore payment of any sums
paid under the Preferred Securities or under this Preferred Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
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.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders
of the Preferred Securities):
[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:__________
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<PAGE> 22
(c) If given to any Holder of Preferred Securities, at
the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit
of the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.
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.
19
<PAGE> 23
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
Trustee], as Preferred Guarantee
Trustee
By:______________________________
Name:
Title:
20
<PAGE> 1
EXHIBIT 5.3
-----------
January 22, 1996
NorAm Energy Corp.
1600 Smith Street
Houston, Texas 77002
Gentlemen:
In connection with the registration under the Securities Act of 1933,
as amended (the "Act"), of up to $500,000,000 aggregate principal amount of
unsecured debt securities (the "Debt Securities") (plus such additional
principal amount as may be necessary such that, if the Securities are issued
with an original issue discount, the aggregate initial offering price of all
Securities will equal $500,000,000), Preferred Stock, $0.10 par value per share
and Common Stock, $0.625 par value per share (collectively, the "Equity
Securities") of NorAm Energy Corp. (the "Company") on a Registration Statement
on Form S-3 (the "Registration Statement") which Debt Securities will be issued
from time to time under that certain Indenture, dated as of April 15, 1990,
between the company and Citibank, N.A., as Trustee (the "Indenture") and which
Equity Securities may be offered from time to time, I, as General Counsel for
the Company have examined such corporate records, certificates and other
documents and have reviewed such questions of law as I have considered
necessary or appropriate for purposes of the opinion expressed below.
Based on such examination and review, I hereby advise you that, in my
opinion:
When (i) the Registration Statement has become effective under the
Act, (ii) the Debt Securities have been duly created, issued and authenticated
in accordance with all necessary corporate authorizations and in accordance
with the terms of the Indenture, and (iii) the Debt Securities have been
delivered and paid for as contemplated by the Registration Statement and the
prospectus relating thereto and in accordance with the Indenture, the Debt
Securities will be legally issued by the Company, and will be valid and binding
obligations of the Company subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
When (i) the Registration Statement has become effective under the
Act, and (ii) the Equity Securities to be offered have been duly issued and
sold, the Equity Securities will be validly issued, fully paid and
nonassessable.
<PAGE> 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Opinions" in the appropriate prospectus forming a part of the Registration
Statement. In giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
NORAM ENERGY CORP.
/s/ HUBERT GENTRY, JR.
----------------------
Hubert Gentry, Jr.
Senior Vice President,
General Counsel and Secretary
<PAGE> 1
EXHIBIT 5.4
January 22, 1996
NorAm Financing I
NorAm Financing II
c/o NorAm Energy Corp.
1600 Smith, 11th Floor
Houston, TX 77002
Re: NorAm Energy Corp.;
NorAm Financing I;
NorAm Financing II;
Registration Statement on Form S-3
(Registration No. 33-64001)
Ladies and Gentlemen:
We have acted as special counsel to (1) NorAm Financing I and
NorAm Financing II (each, a "NorAm Trust" and, together, the "NorAm Trusts"),
each a statutory business trust formed under the laws of the State of Delaware,
and (2) NorAm Energy Corp. (the "Company"), a corporation organized under the
laws of the State of Delaware, in connection with the preparation of a
Registration Statement on Form S-3 (Registration No. 33-64001), filed by the
Company and the NorAm Trusts with the Securities and Exchange Commission (the
"Commission") on November 3, 1995 under the Securities Act of 1933, as amended
(the "Act"), and Amendment No. 1 thereto, filed with the Commission on January
22, 1996 (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"), in connection with the public
offering of preferred securities (the "Trust Preferred Securities") of each of
the NorAm Trusts, and certain other securities.
The Trust Preferred Securities of each NorAm Trust are to be
issued pursuant to the Amended and Restated Declaration of Trust of such NorAm
Trust (each, a "Declaration" and, collectively, the "Declarations"), each such
Declaration being among the Company, as sponsor and as the issuer of certain
debentures to be held by the Institutional Trustee (as defined below) of such
NorAm Trust, The Bank of New York (Delaware), as Delaware
<PAGE> 2
NorAm Financing I
NorAm Financing II
NorAm Energy Corp.
January 22, 1996
Page 2
trustee (the "Delaware Trustee"), The Bank of New York, as institutional
trustee (the "Institutional Trustee"), and Michael B. Bracy and Michael A.
Creel, as trustees (together, the "Regular Trustees").
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act. Capitalized
terms used but not otherwise defined herein have the meanings ascribed to them
in the Registration Statement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
certificate of trust of each of the NorAm Trusts (the "Certificates of Trust")
filed with the Secretary of State of the State of Delaware on November 2, 1995;
(ii) the form of the Declaration of each of the NorAm Trusts (including the
designations of the terms of the Trust Preferred Securities of such NorAm Trust
annexed thereto); (iii) the form of the Trust Preferred Securities of each of
the NorAm Trusts; (iv) the form of the preferred securities guarantee agreement
(the "Preferred Securities Guarantee"), between the Company and The Bank of New
York, as guarantee trustee (the "Preferred Securities Guarantee Trustee"); (v)
the form of the Debentures; (vi) the form of the junior subordinated indenture
(the "Indenture"), between the Company and The Bank of New York, as debt
trustee (the "Debt Trustee"); and (vii) the form of the supplemental indenture,
between the Company and the Debt Trustee, in each case in the form filed as an
exhibit to the Registration Statement. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents exe-
<PAGE> 3
NorAm Financing I
NorAm Financing II
NorAm Energy Corp.
January 22, 1996
Page 3
cuted by parties other than the NorAm Trusts, we have assumed that such parties
had the power, corporate or other, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate or other, and execution and delivery by such parties of such
documents and that, except as set forth in paragraphs (2) and (3) below, such
documents constitute valid and binding obligations of such parties. In
addition, we have assumed that the Declaration of each NorAm Trust, the
Preferred Securities of each NorAm Trust, the Preferred Securities Guarantee,
the Debentures and the Indenture when executed, will be executed in
substantially the form reviewed by us and that the terms of the Debentures when
established in conformity with the Indenture will not violate any applicable
law. As to any facts material to the opinions expressed herein which were not
independently established or verified, we have relied upon oral or written
statements and representations of officers, trustees and other representatives
of the Company, the NorAm Trusts and others.
Members of our firm are admitted to the bar in the States of
Delaware and New York, and we express no opinion as to the laws of any other
jurisdiction.
Based on and subject to the foregoing and to the other
qualifications and limitations set forth herein, we are of the opinion that:
1. The Trust Preferred Securities of each NorAm Trust,
when the Declaration of such NorAm Trust is duly executed and delivered by the
parties thereto, will be duly authorized for issuance and, when issued and
executed in accordance with such Declaration and delivered and paid for as
contemplated in the Registration Statement, will be validly issued, fully paid
and nonassessable, representing undivided beneficial interests in the assets of
such NorAm Trust; and the holders of such Preferred Securities will be entitled
to the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation Law of
the State of Delaware. We bring to your attention, however, that the holders
of Preferred
<PAGE> 4
NorAm Financing I
NorAm Financing II
NorAm Energy Corp.
January 22, 1996
Page 4
Securities of each NorAm Trust may be obligated, pursuant to the Declaration of
such NorAm Trust, to (i) provide indemnity and/or security in connection with
and pay Taxes or governmental charges arising from transfers of Preferred
Securities and (ii) provide security and indemnity in connection with the
requests of or directions to the Institutional Trustee of such NorAm Trust to
exercise its rights and powers under the Declaration of such NorAm Trust.
2. The Preferred Securities Guarantee, when duly
executed and delivered by the parties thereto, will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except to the extent that (a) enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, or other similar laws
now or hereafter in effect relating to creditors's rights generally and (ii)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
3. The Debentures, when the Indenture has been duly
authorized, executed and delivered and when the terms of the Debenture have
been established in conformity with the Indenture, when duly executed,
delivered, authenticated and issued in accordance with the Indenture and
delivered and paid for as contemplated in the Registration Statement, will be
valid and binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles
of equity (regardless of whether enforceability is considered in a proceeding
at law or in equity).
This opinion is furnished to you solely for your benefit in
connection with the filing of the Registration Statement and, except as set
forth below, is not to be used, circulated, quoted or otherwise referred to for
any other purpose or relied upon by any other person
<PAGE> 5
NorAm Financing I
NorAm Financing II
NorAm Energy Corp.
January 22, 1996
Page 5
for any purpose without our prior written consent. We hereby consent to the
use of our name under the heading "Legal Matters" in the prospectus which forms
a part of the Registration Statement. We also hereby consent to the filing of
this opinion with the Commission as an exhibit to the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Act or the rules
and regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof unless otherwise expressly stated and we
disclaim any undertaking to advise you of the facts stated or assumed herein or
any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom
<PAGE> 1
EXHIBIT 12
1 of 2
NORAM ENERGY CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands of dollars)
<TABLE>
<CAPTION>
9/30/95 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
as set forth in Consolidated
Statement of Income $ 30,640 $ 51,291 $ 39,935 $ 6,227 $ 16,515 $100,826
Add back:
Provision for income taxes 23,520 34,372 46,481 12,516 18,418 52,643
Less:
Non-utility interest capitalized 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
54,160 85,663 86,416 18,743 34,933 153,469
-------- -------- -------- -------- -------- --------
Fixed charges (from continuing
operations):
Interest 116,898 167,384 169,857 182,453 174,044 150,593
Amortization of debt discount
and expense 2,455 3,312 3,421 4,450 3,290 2,191
Portion of rents considered to
represent an interest factor 8,469 11,292 10,402 7,704 6,514 5,534
-------- -------- -------- -------- -------- --------
Total fixed charges 127,822 181,988 183,680 194,607 183,848 158,318
-------- -------- -------- -------- -------- --------
Earnings $181,982 $267,651 $270,096 $213,350 $218,781 $311,787
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.42 1.47 1.47 1.10 1.19 1.97
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE> 2
EXHIBIT 12
2 of 2
NORAM ENERGY CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands of dollars)
<TABLE>
<CAPTION>
9/30/95 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
as set forth in Consolidated
Statement of Income $ 30,640 $ 51,291 $ 39,935 $ 6,227 $ 16,515 $100,826
Add back:
Provision for income taxes 23,520 34,372 46,481 12,516 18,418 52,643
Less:
Non-utility interest capitalized 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
54,160 85,663 86,416 18,743 34,933 153,469
-------- -------- -------- -------- -------- --------
Fixed charges (from continuing
operations):
Interest 116,898 167,384 169,857 182,453 174,044 150,593
Amortization of debt discount
and expense 2,455 3,312 3,421 4,450 3,290 2,191
Portion of rents considered to
represent an interest factor 8,469 11,292 10,402 7,704 6,514 5,534
Preferred stock dividend
requirements 10,341 13,026 16,879 23,480 16,497 11,872
-------- -------- -------- -------- -------- --------
Total fixed charges 138,163 195,014 200,559 218,087 200,345 170,190
-------- -------- -------- -------- -------- --------
Earnings $192,323 $280,677 $286,975 $ 236,830 $235,278 $323,659
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.39 1.44 1.43 1.09 1.17 1.90
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 (File No. 33-64001) of our report dated March 24, 1995, on our audits
of the consolidated financial statements and financial statement schedule of
NorAm Energy Corp. and Subsidiaries. We also consent to the reference to our
firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
Houston, Texas
January 22, 1996
<PAGE> 1
EXHIBIT 25.2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________________________________________
NORAM ENERGY CORP.
(Exact name of obligor as specified in its charter)
Delaware 72-0120530
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1600 Smith Street
11th Floor
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
______________________
Subordinated Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
3
<PAGE> 4
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 18th day of January, 1996.
THE BANK OF NEW YORK
By: /s/ STEVEN D. TORGESON
----------------------------
Name: STEVEN D. TORGESON
Title: ASSISTANT TREASURER
4
<PAGE> 1
EXHIBIT 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________________________________________
NORAM FINANCING I
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1600 Smith Street
11th Floor
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
3
<PAGE> 4
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 18th day of January, 1996.
THE BANK OF NEW YORK
By: /s/STEVEN D. TORGESON
---------------------------
Name: STEVEN D. TORGESON
Title: ASSISTANT TREASURER
4
<PAGE> 1
EXHIBIT 25.4
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________________________________________
NORAM FINANCING II
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1600 Smith Street
11th Floor
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
____________________
Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
3
<PAGE> 4
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 18th day of January, 1996.
THE BANK OF NEW YORK
By: /s/ STEVEN D. TORGESON
----------------------------
Name: STEVEN D. TORGESON
Title: ASSISTANT TREASURER
4
<PAGE> 1
EXHIBIT 25.5
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________________________________________
NORAM ENERGY CORP.
(Exact name of obligor as specified in its charter)
Delaware 72-0120530
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1600 Smith Street
11th Floor
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
______________________
Guarantee to Preferred Securities of Noram Financing I
(Title of the indenture securities)
================================================================================
<PAGE> 2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
3
<PAGE> 4
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 18th day of January, 1996.
THE BANK OF NEW YORK
By: /s/ HELEN M. COTIAUX
--------------------------
Name: HELEN M. COTIAUX
Title: VICE PRESIDENT
4
<PAGE> 1
EXHIBIT 25.6
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________________________________________
NORAM ENERGY CORP.
(Exact name of obligor as specified in its charter)
Delaware 72-0120530
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1600 Smith Street
11th Floor
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
______________________
Guarantee to Preferred Securities of Noram Financing II
(Title of the indenture securities)
================================================================================
<PAGE> 2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Name Address
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<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
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(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None. (See Note on page 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
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<PAGE> 4
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 18th day of January, 1996.
THE BANK OF NEW YORK
By: /s/ HELEN M. COTIAUX
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Name: HELEN M. COTIAUX
Title: VICE PRESIDENT
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