UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended November 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _______________________
Commission file number 1-3789
SOUTHWESTERN PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
New Mexico 75-0575400
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Tyler at Sixth, Amarillo, Texas 79101
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (806) 378-2121
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
As of January 10, 1997, 40,917,908 shares of the Company's common stock were
outstanding.
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SOUTHWESTERN PUBLIC SERVICE COMPANY
FORM 10-Q
For the Quarter Ended November 30, 1996
TABLE OF CONTENTS
Page
PART I. Financial Information
Condensed Consolidated Balance Sheets at November 30, 1996 and
August 31, 1996
Condensed Consolidated Statements of Earnings for the three and twelve
months ended November 30, 1996 and November 30, 1995
Condensed Consolidated Statements of Cash Flows for the three and
twelve months ended November 30, 1996 and November 30, 1995
Notes to Condensed Consolidated Financial Statements
Independent Accountants' Report
Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II. Other Information
Signatures
Exhibit 12. Statement of Computation of Ratio of Earnings
FORWARD LOOKING INFORMATION
Certain matters discussed in this 10-Q are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as the Company "believes," "anticipates,"
"expects" or words of similar import. Similarly, statements that describe the
Company's future plans, objectives or goals are also forward-looking statements.
Such statements address future events and conditions concerning capital
expenditures, earnings, litigation, rate and other regulatory matters, the
pending Merger, liquidity and capital resources, and accounting matters. Actual
results in each case could differ materially from those currently anticipated in
such statements, by reason of factors such as electric utility restructuring,
including the ongoing state and federal activities; future economic conditions;
developments in the legislative, regulatory and competitive markets in which the
Company operates; and other circumstances affecting anticipated revenues and
costs.
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Balance Sheets
Assets
<S> <C> <C>
November 30, August 31,
1996 1996
(Unaudited)
(In Thousands)
Utility plant:
Utility plant in service ........................ $ 2,510,014 $ 2,484,025
Accumulated depreciation ........................ (926,055) (911,422)
Net plant in service ................... 1,583,959 1,572,603
Construction work in progress ................... 74,404 49,143
Net utility plant ...................... 1,658,363 1,621,746
Nonutility property and investments ...................... 71,401 71,855
Current assets:
Cash and temporary investments .................. 20,651 31,223
Accounts receivable, net ........................ 63,921 77,959
Undercollected fuel and purchased power cost, net 11,253 7,193
Accrual for unbilled revenues ................... 19,744 23,152
Materials and supplies, at average cost ......... 20,082 21,513
Prepayments and other current assets ............ 6,288 7,452
Total current assets ................... 141,939 168,492
Deferred debits .......................................... 147,018 135,724
Total assets ........................... $ 2,018,721 $ 1,997,817
Continued . . .
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Balance Sheets
Capitalization and Liabilities
<S> <C> <C>
November 30, August 31,
1996 1996
(Unaudited)
(In Thousands)
Capitalization:
Common stock, $1 par value, authorized - 100,000,000 shares;
issued and outstanding - 40,917,908 shares ............ $ 40,918 $ 40,918
Premium on capital stock ....................................... 307,484 307,484
Retained earnings .............................................. 385,682 386,717
Total common shareholders' equity ................... 734,084 735,119
SPS Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trust holding solely Subordinated Debentures of SPS 100,000 -
Long-term debt ................................................. 620,402 622,931
Total capitalization ................................ 1,454,486 1,358,050
Current liabilities:
Short-term debt ................................................ 53 69,624
Current maturities of long-term debt ........................... 15,231 15,176
Accounts payable ............................................... 17,493 15,979
Interest accrued ............................................... 17,082 10,962
Fuel and purchased power expense accrued ....................... 36,579 46,396
Taxes accrued .................................................. 29,384 32,486
Dividends payable on common stock .............................. 22,505 22,505
Other current liabilities ...................................... 40,229 43,441
Total current liabilities ........................... 178,556 256,569
Deferred credits:
Deferred income taxes .......................................... 367,619 365,911
Unamortized investment tax credits ............................. 5,740 5,803
Other .......................................................... 12,320 11,484
Total deferred credits .............................. 385,679 383,198
Total capitalization and liabilities ................ $2,018,721 $1,997,817
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Statements of Earnings
(Unaudited)
<S> <C> <C> <C> <C>
Three Months Ended Twelve Months Ended
11-30-96 11-30-95 11-30-96 11-30-95
(In Thousands, Except Per Share Amounts)
Operating revenues ................................ $ 214,381 $ 200,957 $ 912,821 $ 847,823
Operating expenses:
Operation:
Fuel ............................ 100,466 89,450 428,039 375,476
Purchased power ................. 3,289 1,438 19,862 5,579
Other ........................... 27,228 26,935 109,926 107,911
Maintenance .............................. 8,525 7,234 33,825 28,382
Depreciation and amortization ............ 17,101 16,388 66,161 62,166
Taxes other than property and income taxes 5,580 5,277 21,412 19,590
Property taxes ........................... 5,801 5,678 23,594 23,843
Income taxes ............................. 11,680 13,165 57,863 64,338
Total operating expenses 179,670 165,565 760,682 687,285
Operating income .................................. 34,711 35,392 152,139 160,538
Other income, net:
Income taxes ............................. (611) (1,117) (5,443) (4,670)
Other, net ............................... 966 (119) 9,571 8,562
Total other income, net 355 (1,236) 4,128 3,892
Interest charges .................................. 12,724 10,988 51,322 42,953
Preferred stock dividends of subsidiary ........... 872 - 872 -
Net earnings ...................................... 21,470 23,168 104,073 121,477
Dividends on cumulative preferred stock ........... - 1,219 1,274 4,878
Earnings applicable to common stock ............... $ 21,470 $ 21,949 $ 102,799 $ 116,599
Earnings per common share* ........................ $ .52 $ .54 $ 2.51 $ 2.85
Weighted average shares outstanding ............... 40,918 40,918 40,918 40,918
Dividends declared per common share ............... $ .55 $ .55 $ 2.20 $ 2.20
( ) Denotes deduction.
*Based on weighted average shares outstanding.
See accompanying notes to condensed consolidated financial statements.
Certain 1995 amounts have been reclassified to conform to the 1996 presentation.
</TABLE>
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<S> <C> <C> <C> <C>
Three Months Ended Twelve Months Ended
11-30-96 11-30-95 11-30-96 11-30-95
(In Thousands)
Operating Activities:
Cash received from customers .......................................... $ 227,526 $ 225,264 $ 888,378 $ 835,409
Cash paid to suppliers and employees .................................. (149,325) (128,683) (584,764) (503,790)
Interest paid ......................................................... (7,398) (4,154) (51,370) (41,986)
Income taxes paid ..................................................... (13,000) (19,205) (49,220) (58,283)
Taxes other than income taxes paid .................................... (10,330) (9,248) (46,682) (42,087)
Other operating cash receipts and payments, net ....................... (9,493) 441 (2,691) 11,007
Net cash provided by operating activities ....... 37,980 64,415 153,651 200,270
Investing Activities:
Construction expenditures ............................................. (54,456) (32,991) (133,451) (105,507)
Nonutility property and investments ................................... 454 (1,134) (180) (27,993)
Acquisitions .......................................................... - (29,200) - (29,200)
Net cash used in investing activities ........... (54,002) (63,325) (133,631) (162,700)
Financing Activities:
Issuance of long-term debt ............................................ 82,300 - 142,300 76,204
Issuance of SPS Obligated Mandatorily Redeemable
Preferred Securities ................................................ 100,000 - 100,000 -
Retirement of long-term debt .......................................... (84,774) (1,645) (87,574) (18,375)
Change in short-term debt ............................................. (69,571) - 53 -
Redemption of cumulative preferred stock .............................. - - (75,434) -
Dividends paid (common and preferred) ................................. (22,505) (23,724) (91,295) (94,898)
Net cash used in financing activities ........... 5,450 (25,369) (11,950) (37,069)
Net Increase (Decrease) in Cash and Temporary Investments ...................... (10,572) (24,279) 8,070 501
Cash and Temporary Investments at Beginning of Period .......................... 31,223 36,860 12,581 12,080
Cash and Temporary Investments at End of Period ................................ $ 20,651 $ 12,581 $ 20,651 $ 12,581
Reconciliation of Net Earnings to Net Cash Provided
by Operating Activities:
Net earnings ................................................. $ 21,470 $ 23,168 $ 104,073 $ 121,477
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation ........................................ 17,101 16,388 66,161 62,166
Deferred income taxes and investment tax credits .... 3,445 3,074 16,543 10,122
Allowance for equity funds used during construction . (175) (60) (174) (245)
Cash flows impacted by changes in:
Accounts receivable ................................. 14,038 18,394 (9,053) (1,121)
Accrual for unbilled revenues ....................... 3,408 7,339 1,543 (9,821)
Materials and supplies .............................. 1,431 1,112 453 (924)
Accounts payable .................................... 1,514 4,723 583 6,029
Fuel and purchased power expense accrued ............ (9,817) (10,587) 7,002 921
Taxes accrued ....................................... (3,102) (6,289) (4,084) 2,022
Undercollected fuel and purchased power cost, net ... (4,060) (1,165) (16,057) (536)
Other, net .......................................... (7,273) 8,318 (13,339) 10,180
Net cash provided by operating activities ...... $ 37,980 $ 64,415 $ 153,651 $ 200,270
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1) Interim periods. The results of operations for the interim periods are not
necessarily an indication of the expected results for the fiscal year due to the
seasonal nature of Southwestern Public Service Company's (the Company) business.
The unaudited condensed consolidated financial statements included herein were
prepared from the books of the Company in accordance with generally accepted
accounting principles and reflect all adjustments (none of which are other than
normal recurring adjustments) which are, in the opinion of management, necessary
to provide a fair statement of the results of operations and financial position
for the interim periods. Such financial statements generally conform to the
presentation reflected in the Company's Annual Report to Stockholders. The
current interim period reported herein is included in the fiscal year subject to
independent audit at the end of the year.
(2) Income taxes. The components of income tax expense (benefit) are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Ended Twelve Months Ended
11-30-96 11-30-95 11-30-96 11-30-95
(In Thousands)
Taxes on operating income:
Federal-current ........... $ 7,997 $ 9,518 $ 38,138 $ 51,188
Federal-deferred .......... 3,668 3,287 17,678 11,468
Investment tax credits .... (62) (62) (250) (250)
State-current ............. 77 422 2,297 1,932
11,680 13,165 57,863 64,338
Taxes on other income:
Federal-current ........... 765 1,262 6,279 5,735
Federal-deferred .......... (161) (151) (884) (1,096)
State-current ............. 7 6 48 31
611 1,117 5,443 4,670
Total income taxes ..... $ 12,291 $ 14,282 $ 63,306 $ 69,008
</TABLE>
(3) Merger with Public Service Company of Colorado (PSCo). The Company and
Denver-based PSCo entered into a definitive merger agreement (the Merger) on
August 22, 1995, to form a registered public utility holding company named New
Century Energies, Inc., which will be the parent company for the Company and
PSCo. The transaction is subject to various conditions, including receipt of the
approval of or the taking of other action by the Securities and Exchange
Commission, the Federal Trade Commission, the Department of Justice, the Nuclear
Regulatory Commission, the Federal Energy Regulatory Commission (FERC), and the
state public utility commissions in Texas, Colorado, New Mexico, Wyoming, and
Kansas. (See GENERAL. Merger Agreement in the Company's 1996 Annual Report on
Form 10-K.)
The Merger, with a targeted completion date in the spring of 1997, is
conditioned on qualifying as a tax-free reorganization and being accounted for
as a pooling of interests.
(4) Issuance of securities. The Company redeemed in September 1996, the
$25,000,000 6-1/2% pollution control revenue bonds (PCRBs) due 2004 and the
$32,300,000 6-5/8% PCRBs due 2009 and replaced these series in September 1996,
with $57,300,000 5-3/4% PCRBs due 2016.
In October 1996, the Company called its $25,000,000 principal amount of
13-1/2% PCRBs and issued $25,000,000 of new variable rate PCRBs. In connection
with the new issuance of variable rate PCRBs, the Company has an interest rate
swap agreement, which, in effect, fixes the interest rate on a $25,000,000
notional amount at 6.435%. Amounts paid or received under this agreement are
accrued as interest rates change and are recognized over the life of the
agreement as an adjustment to interest expense. The Company is exposed to
interest rate risk in the event of nonperformance by the counterparty; however,
the Company does not anticipate such nonperformance.
In October 1996, Southwestern Public Service Capital I, a wholly owned
trust, issued in a public offering $100,000,000 of its 7.85% Trust Preferred
Securities, Series A. The sole asset of the trust is $103,000,000 principal
amount of the Company's 7.85% Deferrable Interest Subordinated Debentures,
Series A due September 1, 2036. The funds from this financing were used to
reduce short-term debt.
(5) Rate and regulatory matters. The Company may effect changes in its rates
only as approved by the regulatory authorities governing its jurisdictions.
Amounts ultimately realized will differ from amounts approved because
kilowatt-hour sales and other factors will vary from those used in rate
proceedings.
A Public Utility Commission of Texas (PUCT) substantive rule requires
periodic examination of the Company's fuel and purchased power costs, the
efficiency of the use of such fuel and purchased power, fuel acquisition and
management policies and purchase power commitments. On May 1, 1995, the Company
filed with the PUCT a petition for a fuel reconciliation for the months of
January 1992 through December 1994. A hearing was held in September 1995, and in
January 1996 an order was issued which required the Company to make a $3.9
million fuel refund consisting of $2.1 million of overrecovered fuel costs and
$1.8 million of disallowed fuel costs for the period. This refund was made in
April 1996. Additionally, the order required the Company to flow through to
customers 100% of margins from non-firm off-system opportunity sales as of
January 1995. Prior PUCT rulings had allowed the Company to retain 25% of these
margins. The 100% flow through is required by PUCT rules, absent rule waiver.
The Company filed a motion for rehearing on January 25, 1996. The PUCT issued an
order on March 14 denying rehearing on the fuel disallowance (which was adjusted
to $1.9 million), and ordered the flow through of 100% of the margin effective
with the first billing cycle after the date of the order. On May 24, 1996, the
Company filed an appeal in the Travis County District Court on the PUCT's
decision with respect to the $1.9 million of disallowed fuel costs in which the
hearing of merits was held on November 1, 1996. The District Court upheld the
PUCT's decision on the disallowed fuel costs. It is anticipated that the
District Court decision will be appealed to the Texas Court of Appeals. The
ultimate outcome of this matter will not significantly affect consolidated
financial results. Currently the Company has approximately $11 million in
underrecovered fuel costs and has filed with the PUCT for a change in the fuel
factors. Settlement was made with the PUCT and intervening parties, and the fuel
factors were interimly approved and are now in effect.
On December 19, 1989, the FERC issued its final order regarding the
1985 rate case. The Company appealed certain portions of the order that related
to recognition in rates of the reduction of the federal income tax rate from 46%
to 34%. The United States Court of Appeals for the District of Columbia Circuit
remanded the case, directing the FERC to reconsider the Company's claim of an
offsetting cost and limiting the FERC's actions. The FERC issued its Order on
Remand in July 1992, required filings were made and a hearing was completed in
February 1994. In October 1994, the administrative law judge issued a favorable
initial decision that, if approved by the FERC, would result in a substantial
recovery by the Company. Negotiated settlements with the Company's partial
requirements customers and TNP were approved by the FERC in July 1993 and
September 1993, respectively, and the Company received approximately $2,800,000,
including interest. In a settlement with the Company's New Mexico cooperative
customers the Company received approximately $7,000,000, including interest. The
FERC approved this settlement in July 1995. Resolutions of these matters with
the remaining wholesale customers, Golden Spread member cooperatives and
Lyntegar Electric Cooperative, have not been reached. The Company cannot
reasonably estimate the remaining amount recoverable from these proceedings;
however, a favorable resolution could materially improve consolidated earnings
in the year in which it is resolved.
(6) Other events. As discussed in the Company's 1996 Annual Report on Form 10-K
under BUSINESS. Nonutility Businesses, Quixx Corporation, a wholly owned
subsidiary of the Company, holds a 49% limited partnership interest in BCH
Energy Limited Partnership which owns a waste-to-energy cogeneration facility
located near Fayetteville, North Carolina. Limited commercial operation of the
BCH project began in June 1996; however, the facility has not achieved the
expected performance level. Quixx is currently negotiating with the project debt
and equity holders concerning the restructuring of the project to achieve the
required improvements on economically viable terms. Should it not be possible to
economically complete the necessary improvements, Quixx may be required to write
off a portion or all of its investment of approximately $15,000,000 in this
project. The resolution of this matter could adversely affect consolidated
earnings for the year.
The banks providing the debt financing to the project have withheld
funds for the BCH project and for the construction of the companion Carolina
project discussed in such Form 10-K and construction of the Carolina project has
been suspended. Quixx is also in negotiations concerning the viability of the
Carolina project and the restoration of the funding for its construction.
The Company was named as a defendant in a case entitled Thunder Basin Coal
Co. v. Southwestern Public Service Co., No. 93-CV-304B (D. Wyo.). (See ITEM 3.
LEGAL PROCEEDINGS in the Company's 1996 Annual Report on Form 10-K.) On November
1, 1994, the jury returned a verdict in favor of Thunder Basin and awarded them
damages of approximately $18,800,000. The Company appealed the judgement to
the Tenth Circuit Court of Appeals and on January 7, 1997, that Court found in
favor of Thunder Basin and upheld the $18,800,000 judgement. The Company is
considering a motion for rehearing.
Management believes that the payment would be recoverable from
ratepayers, although any such recovery would be subject to regulatory review.
Therefore, management believes that the ultimate resolution will not have a
material adverse effect on the Company's consolidated financial statements.
(7) General. See note (1) of Notes to Consolidated Financial Statements in the
Company's 1996 Annual Report on Form 10-K for a summary of the Company's
significant accounting policies.
<PAGE>
Independent Accountant's Report
Southwestern Public Service Company:
We have reviewed the accompanying condensed consolidated balance sheet of
Southwestern Public Service Company and subsidiaries as of November 30, 1996,
and the related condensed consolidated statements of earnings and cash flows for
the three-month and twelve-month periods ended November 30, 1996 and 1995. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet and statement of capitalization of
Southwestern Public Service Company and subsidiaries as of August 31, 1996, and
the related consolidated statements of earnings, common shareholders' equity,
and cash flows for the year then ended (not presented herein); and in our report
dated October 10, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of August 31, 1996, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
Deloitte & Touche LLP
January 10, 1997
Dallas, Texas
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating Revenues and Kilowatt-Hour Sales
Substantially all of the Company's operating revenues result from the
sale of electric energy. The principal factors determining revenues are the
amount and price per unit of energy sold. The following table describes the
principal components of changes in revenues.
<TABLE>
<CAPTION>
<S> <C> <C>
Increase (Decrease) From
Corresponding Prior Period
Three Months Twelve Months
Ended Ended
11-30-96 11-30-96
(Dollars In Thousands)
Estimated effect on revenues of variations in:
Kilowatt-hour (kwh) sales* .................... $ (711) $ 37,408
Rates .......................................... 3,490 (9,441)
Fuel and purchased power cost recovery ......... 8,325 31,747
Subtotal ............................ 11,104 59,714
Non-firm kwh sales ............................. 2,320 5,284
Total revenue increase ............... $ 13,424 $ 64,998
Increase in kwh sales* (in millions) .................. 52 805
Increase (decrease) in non-firm kwh sales (in millions) 132 (45)
* Comprised of retail and wholesale excluding economy and interruptible (non-firm) wholesale kwh sales.
</TABLE>
Variations in Kwh Sales. The revenue increases for the twelve-month
period was due primarily to increased Kwh sales to all retail (ultimate)
customers and to rural electric cooperatives (RECs) due primarily to a hotter
than normal late spring and early summer. These conditions increased air
conditioning load for the twelve-month period. Contributing to the increase were
kwh sales resulting from the acquisition of electric properties in the Texas
Panhandle from Texas-New Mexico Power Company (TNP). The decrease for the
quarter is primarily due to a significant decline in firm sales to firm
municipal customers including the Texas cities of Lubbock, Brownfield, Tulia and
Floydada. These customers purchased available non-firm power from the Company
and others. Although kwh sales increased modestly in the quarter, the migration
of these customer purchases to the lower priced non-firm power caused a decline
in revenues that was not offset by the increased level of sales.
Variations in Rates. Increased revenues for the three-month period are
due primarily to increased demand charges per kwh received from certain
wholesale customers. The decreases for the twelve-month period are primarily the
result of last year's settlement of the 1985 Federal Energy Regulatory
Commission (FERC) rate case with the Company's New Mexico wholesale REC
customers. This settlement contributed increased revenues of approximately $4.0
million (and interest of $3.0 million that is included in other income).
Interruptible rates available to certain classes of retail customers were
approved and implemented in Texas and New Mexico in 1996 which acted to lower
related revenues for both periods. The Company sought approval to put into
effect these new rates in compliance with settlement agreements in the 1993 and
1994 rate cases in Texas and New Mexico, respectively, and to respond to
generation resource capacity needs.
Variations in Fuel and Purchased Power Cost Recovery. Revenue increases for
the three- and twelve-month periods are due to increased gas and coal costs.
Variations in Non-Firm Kwh Sales. The amount of revenues arising from
non-firm sales is dependent, in large part, upon the amount and cost of power
available to the Company for sale, the demand for power, the availability of
competing hydroelectric power from the Northwest and generation from major
plants in the West. The increases for the three- and twelve-month periods are
due primarily to increased fuel charges included in the non-firm kwh sales.
Additionally, interruptible sales to Public Service Company of New Mexico
increased for both periods because of an increased demand for power.
Operating Expenses and Non-Operating Items
Operating Expenses. Fuel and purchased power expense comprised 57.7%
and 58.9% of total operating expenses for the three and twelve months ended
November 30, 1996, respectively. When compared to the corresponding periods last
year, these expenses increased $12.9 million, or 14.2%, and $66.8 million, or
17.5%, for the three- and twelve-month periods respectively. Increased fuel
costs, primarily gas costs, caused increases in both periods. Fuel expense
(excluding purchased power expense), per net kwh generated, increased from 1.83
to 2.01 cents and from 1.78 to 2.02 cents for the respective three- and
twelve-month periods due to higher natural gas and coal costs.
Total operating expenses, excluding fuel and purchased power, increased
$1.2 million, or 1.7%, for the three-month period, and increased $6.6 million,
or 2.1%, for the twelve-month period. The increase in the three-month period was
due primarily to steam production maintenance expenses. Additionally, a decline
in taxable income lowered taxes in the current period. The increase in the
twelve-month period was due primarily to increased steam production maintenance
expense and expenses associated with the acquisition of the TNP electric
properties. Maintenance expenses were higher due to the normal recurring
eighteen-month repair cycle and additional cooling tower maintenance costs.
Other Income. Other income increased for the three-month period due
primarily to reduced taxes and merger and business integration expenses as well
as slightly increased subsidiary earnings. Other income during the twelve-month
period was favorably impacted by the approximate $7.7 million after-tax gain on
the sale of certain water rights by Quixx Corporation. The gain was offset by
increased merger and business integration expenses of approximately $5.4
million. The Company reclassified these expenses from operating expenses to
other income to conform with a FERC order. Other income was favorably impacted
in the prior twelve-month period by the approximate $3.0 million of interest
arising from the rate case settlement with New Mexico wholesale customers.
Earnings
Current earnings applicable to common stock declined for both periods
in part because of increased interest expense due to increased long-term and
short-term debt. These higher levels of debt were caused by the retirement of
preferred stock, the 1995 acquisition of electric properties from TNP and
increased construction expenditures. Twelve-month earnings were positively
affected by the sale of a portion of underground water rights held by Quixx that
added 19 cents per share. However, these earnings were adversely affected by
merger-related and business integration expenses. Additionally, earnings for the
prior twelve-month period had been boosted by the rate settlement with wholesale
customers in New Mexico that added 11 cents per share, and by a change in the
estimate of delivered-but-not-billed kwh sales that added 13 cents per share.
These estimated kwh sales relate to energy used by customers but not billed
until the subsequent month. Operating income was flat in the three-month period
and decreased in the twelve-month period primarily because of the greater
maintenance expenses and the expenses associated with the TNP acquisition.
Assuming normal weather conditions, 1997 operating income is expected
to remain relatively flat, but net earnings for 1997 will be negatively impacted
by increased merger-related and business integration expenses. Any write-off
associated with the BCH project discussed in Note (6) would further adversely
affect such earnings. A resolution of the 1985 FERC rate case with Texas
wholesale REC customers, by settlement or otherwise, would favorably affect
income and earnings in the year received.
LIQUIDITY AND CAPITAL RESOURCES
The Company's demand for capital is normally related to the
construction of utility plant and equipment. Cash construction expenditures
excluding AFUDC for the three and twelve months ended November 30, 1996, were
$54.5 million and $133.5 million, respectively. Also in fiscal 1996, the Company
received regulatory approval to make investments in Quixx of up to $15 million
each year beginning in fiscal 1996 and continuing for five years. Quixx's
investment in independent power projects is dependent upon suitable investment
opportunities and the availability of capital. The Company cannot accurately
forecast the portion of internally generated funds to be used for capital
expenditures, but expects that it will be approximately 40% in fiscal 1997. To
the extent the capital required in 1997 is not supplied by internally generated
funds, the Company expects to obtain such capital from short-term borrowing or
from the sale of long-term debt, preferred stock and/or common stock. The
Company's estimates of capital needs, in particular those related to
construction and the generation of internal funds are subject to review and
revision, and may vary substantially from the foregoing especially in a more
competitive environment. Due to the merger, Standard & Poor's is reviewing the
Company's rated debt for possible downgrade.
In August 1994 the Company entered in a forward interest rate swap
agreement in anticipation of redeeming its $25 million principal amount of
13-1/2% Pollution Control Revenue Bonds (PCRBs) with a new issuance of variable
rate PCRBs. Such bonds were redeemed October 1, 1996, and replaced with a
variable rate bond issue that has been swapped for a fixed rate of 6.435% due
July 1, 2016. Additionally, the Company redeemed on September 26, 1996, the $25
million 6-1/2% PCRBs due 2004 and the $32.3 million 6-5/8% PCRBs and replaced
these series on September 18, 1996, with $57.3 million 5-3/4% PCRBs due
September 1, 2016.
In October 1996, Southwestern Public Service Capital I, a wholly owned
trust, issued in a public offering $100 million of 7.85% Trust Preferred
Securities, Series A. The sole asset of the trust is $103 million principal
amount of the Company's 7.85% Deferrable Interest Subordinated Debentures,
Series A due September 1, 2036. The securities are shown as SPS Obligated
Mandatorily Redeemable Preferred Securities of Subsidiary Trust holding solely
Subordinated Debentures of SPS on the Consolidated Balance Sheet. The funds from
this financing were used to reduce short-term debt.
The Company also has effective a shelf registration under which $220
million of debt securities and/or preferred stock are available for issuance.
OTHER MATTERS
Electric utilities have historically operated in a highly regulated
environment in which they have an obligation to provide electric service to
their customers in return for an exclusive franchise within their service
territory with an opportunity to earn a regulated rate of return. This
regulatory environment is changing. The generation sector has experienced
competition from nonutility power producers and the FERC is requiring utilities,
including the Company, to provide wholesale transmission service to others and
may order electric utilities to enlarge their transmission systems to facilitate
transmission services without impairing reliability. On July 9, 1996, the
Company filed its open access transmission tariff in compliance with FERC Order
No. 888. (See GENERAL. Competition in the Company's 1996 Annual Report on Form
10-K.) State regulatory authorities are in the process of changing utility
regulations in response to federal and state statutory changes and evolving
markets. All of the Company's jurisdictions continue to evaluate utility
regulations with respect to competition, and legislative proposals to effect
retail wheeling are expected to be introduced in 1997. The Company is unable to
predict what financial impact or effect the adoption of these proposals would
have on its operations. In part in response to these changing conditions the
Company has entered into a definitive merger agreement with Public Service
Company of Colorado (the Merger). Consummation of the Merger is subject to
customary conditions including receiving regulatory authority approvals. The two
utilities are working toward a completion date in spring 1997. The foregoing
discussions of the Company's "Results of Operations" and "Liquidity and Capital
Resources" do not take into account any changes that could arise as a result of
the Merger.
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information.
The Company's ratio of earnings to fixed charges for the twelve months
ended November 30, 1996, was 4.00. The ratio of earnings to fixed charges and
preferred dividend requirements combined was 3.86 for such period.
See Note (6) of Notes to Condensed Consolidated Financial Statements
for a discussion of Quixx's BCH project and a lawsuit between the Company and
Thunder Basin Coal Company.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
4(a) Indenture dated as of October 21, 1996, between the
Company and Wilmington Trust Company
(b) Supplemental Indenture dated as of October 21, 1996,
between the Company and Wilmington Trust Company
(c) Guarantee Agreement dated as of October 21, 1996,
between the Company and Wilmington Trust Company
(d) Amended and Restated Trust Agreement dated as of
October 21, 1996, among the Company, David M. Wilks,
as initial depositor, Wilmington Trust Company and
the administrative trustees named therein
(e) Agreement as to Expenses and Liabilities dated as of
October 21, 1996, between the Company and Southwestern
Public Service Capital I (included as Exhibit F in
Exhibit 4(d))
Instruments defining the rights of holders of other
long-term debt not required to be filed as exhibits
will be furnished to the Commission upon request.
12 Statement showing computations of ratio of earnings for
the twelve months ended November 30, 1996
15 Letter of Deloitte & Touche LLP regarding unaudited
condensed consolidated interim financial information
(b) Reports on Form 8-K:
Item reported - Item 5. Other Events
Financial Statements filed - None
Date of report filed - October 11, 1996, reporting 1996
fiscal year earnings
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SOUTHWESTERN PUBLIC SERVICE COMPANY
/s/ Doyle R. Bunch II
By
Doyle R. Bunch II
Executive Vice-President
Accounting and Corporate Development
DATE: January 10, 1997
SOUTHWESTERN PUBLIC SERVICE COMPANY
TO
WILMINGTON TRUST COMPANY,
AS TRUSTEE
------------------------
INDENTURE
DATED AS OF OCTOBER 21, 1996
------------------------
DEFERRABLE INTEREST SUBORDINATED DEBENTURES
<PAGE>
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture
Indenture
Act Section Section
Section 310(a)(1)............................ 609
(a)(2)............................ 609
(a)(3)............................ Not Applicable
(a)(4)............................ Not Applicable
(b)............................... 608, 610
Section 311(a)............................... 613
(b)............................... 613
Section 312(a)............................... 701, 702(a)
(b)............................... 702(b)
(c)............................... 702(c)
Section 313(a)............................... 703(a)
(b)............................... 703(a)
(c)............................... 703(a)
(d)............................... 703(b)
Section 314(a)............................... 704
(b)............................... Not Applicable
(c)(1)............................ 102
(c)(2)............................ 102
(c)(3)............................ Not Applicable
(d)............................... Not Applicable
(e)............................... 101, 102
Section 315(a)............................... 601
(b)............................... 602
(c)............................... 601
(d)............................... 601
(e)............................... 514
Section 316(a)............................... 101
(a)(1)(A)......................... 502, 512
(a)(1)(B)......................... 513
(a)(2)............................ Not Applicable
(b)............................... 508
(c)............................... 104(c)
Section 317(a)(1)............................ 503
(a)(2)............................ 504
(b)............................... 1003
Section 318(a)............................... 107
- -------------------
Note: This reconciliation and tie shall not, for any purposes,
be deemed to be a part of this Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions..................................... 1
SECTION 102. Compliance Certificates and
Opinions...................................... 10
SECTION 103. Form of Documents Delivered to
Trustee....................................... 11
SECTION 104. Acts of Holders; Record Dates................... 11
SECTION 105. Notices, Etc. to Trustee and the
Company....................................... 13
SECTION 106. Notice to Holders; Waiver....................... 13
SECTION 107. Conflict with Trust Indenture Act............... 14
SECTION 108. Effect of Headings and Table of
Contents...................................... 14
SECTION 109. Successors and Assigns.......................... 14
SECTION 110. Separability Clause............................. 14
SECTION 111. Benefits of Indenture........................... 15
SECTION 112. GOVERNING LAW................................... 15
SECTION 113. Legal Holidays.................................. 15
ARTICLE TWO
FORM OF SECURITIES
SECTION 201. Forms Generally................................. 15
SECTION 202. Form of Legend for Global
Securities.................................... 16
SECTION 203. Form of Trustee's Certificate of
Authentication................................ 16
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in
Series........................................ 17
SECTION 302. Denominations................................... 20
SECTION 303. Execution, Authentication, Delivery
and Dating.................................... 21
SECTION 304. Temporary Securities............................ 22
SECTION 305. Registration, Registration of
Transfer and Exchange......................... 23
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<PAGE>
Page
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities............................. 26
SECTION 307. Payment of Interest; Interest
Rights Preserved.............................. 27
SECTION 308. Persons Deemed Owners........................... 28
SECTION 309. Cancellation.................................... 29
SECTION 310. Computation of Interest......................... 29
SECTION 311. Right of Set-Off................................ 29
SECTION 312. CUSIP Numbers................................... 29
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of
Indenture..................................... 30
SECTION 402. Application of Trust Money...................... 31
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................... 32
SECTION 502. Acceleration of Maturity;
Rescission and Annulment...................... 34
SECTION 503. Collection of Indebtedness and
Suits for Enforcement by Trustee.............. 35
SECTION 504. Trustee May File Proofs of Claim................ 36
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities...................... 36
SECTION 506. Application of Money Collected.................. 37
SECTION 507. Limitation on Suits............................. 37
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest................ 38
SECTION 509. Restoration of Rights and Remedies.............. 39
SECTION 510. Rights and Remedies Cumulative.................. 39
SECTION 511. Delay or Omission Not Waiver.................... 39
SECTION 512. Control by Holders.............................. 39
SECTION 513. Waiver of Past Defaults......................... 40
SECTION 514. Undertaking for Costs........................... 40
SECTION 515. Waiver of Stay or Extension Laws................ 41
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities............. 41
SECTION 602. Notice of Defaults.............................. 43
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<PAGE>
Page
SECTION 603. Certain Rights of the Trustee................... 43
SECTION 604. Not Responsible for Recitals or
Issuance of Securities........................ 45
SECTION 605. May Hold Securities............................. 45
SECTION 606. Money Held in Trust............................. 45
SECTION 607. Compensation and Reimbursement.................. 45
SECTION 608. Disqualification; Conflicting
Interests.................................... 46
SECTION 609. Corporate Trustee Required;
Eligibility................................... 46
SECTION 610. Resignation and Removal;
Appointment of Successor...................... 47
SECTION 611. Acceptance of Appointment by
Successor..................................... 49
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business..................... 51
SECTION 613. Preferential Collection of Claims
Against Company............................... 51
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders..................... 51
SECTION 702. Preservation of Information;
Communications to Holders..................... 52
SECTION 703. Reports by Trustee.............................. 52
SECTION 704. Reports by Company.............................. 52
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only
on Certain Terms.............................. 53
SECTION 802. Successor Substituted........................... 54
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without
Consent of Holders........................... 55
SECTION 902. Supplemental Indentures with
Consent of Holders........................... 56
SECTION 903. Execution of Supplemental
Indentures................................... 57
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<PAGE>
Page
SECTION 904. Effect of Supplemental Indentures............... 57
SECTION 905. Conformity with Trust Indenture Act............. 58
SECTION 906. Reference in Securities to
Supplemental Indentures....................... 58
ARTICLE TEN
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 1001. Payment of Principal and Interest............... 58
SECTION 1002. Maintenance of Office or Agency................. 58
SECTION 1003. Money for Payments on Securities to
Be Held in Trust.............................. 59
SECTION 1004. Statement by Officers as to Default............. 60
SECTION 1005. Additional Covenants............................ 61
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Senior
Indebtedness.................................. 62
SECTION 1102. Payment Over of Proceeds upon
Dissolution, etc.............................. 62
SECTION 1103. No Payment When Senior Indebtedness
in Default.................................... 64
SECTION 1104. Payment Permitted if No Default................. 65
SECTION 1105. Subrogation to Rights of Holders of
Senior Indebtedness........................... 65
SECTION 1106. Provisions Solely to Define
Relative Rights............................... 66
SECTION 1107. Trustee to Effectuate Subordination............. 67
SECTION 1108. No Waiver of Subordination
Provisions.................................... 67
SECTION 1109. Notice to Trustee............................... 68
SECTION 1110. Reliance on Judicial Order or
Certificate of Liquidating Agent.............. 69
SECTION 1111. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation
of Trustee's Rights........................... 69
SECTION 1112. Article Applicable to Paying Agents............. 70
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<PAGE>
Page
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article........................ 70
SECTION 1202. Election to Redeem; Notice to
Trustee....................................... 70
SECTION 1203. Selection by Trustee of Securities
to Be Redeemed................................ 71
SECTION 1204. Notice of Redemption............................ 71
SECTION 1205. Deposit of Redemption Price..................... 72
SECTION 1206. Securities Payable on Redemption
Date.......................................... 73
SECTION 1207. Securities Redeemed in Part..................... 73
ANNEX A Form of Amended and Restated Trust
Agreement.................................... A-1
-v-
<PAGE>
INDENTURE, dated as of October 21, 1996, between Southwestern Public
Service Company, a corporation duly organized and existing under the laws of the
State of New Mexico (herein called the "Company") having its principal office at
Tyler at Sixth, Amarillo, Texas 79101, and Wilmington Trust Company, as Trustee
(herein called the "Trustee"). Unless otherwise defined herein, with respect to
a given series of debentures, all capitalized terms used herein but not defined
shall have the meanings ascribed to them in the Amended and Restated Trust
Agreement, the form of which is attached as Annex A hereto.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures
(herein called the "Securities"), to be issued in one or more series to evidence
the loans to be made to the Company of the proceeds from the issuance from time
to time by one or more business trusts (each a "Trust" and, collectively, the
"Trusts") of preferred beneficial interests in such Trusts (the "Preferred
Securities") and common beneficial interests in such Trusts (the "Common
Securities").
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities of each series thereof,
as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
<PAGE>
-2-
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" means the sum of Additional
Interest Attributable to Deferral and Additional Interest
Attributable to Taxes.
"Additional Interest Attributable to Deferral" means interest that
shall accrue on any interest on the Securities that is in arrears or not paid
during an Extension Period.
"Additional Interest Attributable to Taxes" means, if a Trust is
required to pay any taxes, duties or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other taxing
authority, such amounts as shall be required so that the net amounts received by
such Trust and available for distribution to holders of Trust Securities by such
Trust after paying such taxes, duties or governmental charges shall not be less
than the amounts such Trust would have received had no such taxes, duties or
governmental charges been imposed.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Board of Directors" means either the board of
directors of the Company or any duly authorized committee of
<PAGE>
-3-
that board or any Officer of the Company who has been authorized by the Board to
act on its behalf by a Board Resolution.
"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 delivered to the Trustee.
"Business Day" means a day other than (w) a Saturday or a Sunday,
(x) a day on which banks in New York are authorized or obligated by law or
executive order to remain closed, (y) a day on which the Corporate Trust Office
of the Trustee, or the principal office of the Property Trustee under the Trust
Agreement, is closed for business or (z) a day on which the principal office of
the Company is closed for business.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, its President or a Vice
President and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in Wilmington, Delaware at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is 1100
North Market Street, Wilmington, Delaware 19890.
"Defaulted Interest" has the meaning specified in
Section 307.
"Depositary" means, with respect to Securities of any
series issuable in whole or in part in the form of one or more
<PAGE>
-4-
Global Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depositary for such Securities as contemplated by Section
301.
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, as amended from time to time.
"Extension Period" has the meaning specified in
Section 301.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 202 (or such
other legend as contemplated by Section 301).
"Holder" means a Person in whose name a Security is
registered in the Securities Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"Interest Payment Date", when used with respect to any installment
of interest on any Security, means the date specified in such Security as the
fixed date on which an installment of interest with respect to such Security is
due and payable.
"Investment Company Event" means with respect to an issuance of
Securities of a particular issue, the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body,
<PAGE>
-5-
court, governmental agency, or regulatory authority (a "Change in 1940 Act Law")
to the effect that a Trust is or will be considered an "investment company" that
is required to be registered under the Investment Company Act of 1940, as
amended, which Change in 1940 Act Law becomes effective after the date specified
in the prospectus supplement or in the authorizing Board Resolution with respect
to the related issuance of Preferred Securities.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, the President, a Vice President, or the Treasurer of the Company and
(ii) the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee; provided, however, that such certificate may be signed by two of the
officers or directors listed in clause (i) above in lieu of being signed by one
of such officers or directors listed in such clause (i) and one of the officers
listed in clause (ii) above. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the principal executive,
financial or accounting officer of the Company. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Indenture shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition
and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
<PAGE>
-6-
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except: (i) Securities theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation; (ii) Securities for
whose payment or redemption money or U.S. Government Obligations in the
necessary amount have been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and (iii) Securities which
have been paid pursuant to Section 1001, or in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; provided, however, that in determining whether the
Holders of the requisite principal amount of Securities have given or concurred
in any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any Affiliate of the Company
(other than a Trust to which such Securities have been issued) shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities the
ownership of which by the Company or an Affiliate of the Company the Trustee has
actual knowledge of shall be so disregarded.
"Parent Guarantee" means any guarantee that the Company may enter
into with a Trust for the benefit of the holders of the Preferred Securities of
such Trust.
"Paying Agent" means any Person authorized by the
Company to pay the principal of or interest on any Securities
on behalf of the Company. The Paying Agent shall initially be
Wilmington Trust Company.
<PAGE>
-7-
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in
the Recitals to this Indenture.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed by or pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Representative" means an indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the 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 his knowledge of
and familiarity with the particular subject.
<PAGE>
-8-
"Securities" has the meaning specified in the Recitals to this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred, created or assumed: (i)
all indebtedness of the Company on a consolidated basis (other than any
obligations to trade creditors) evidenced by notes, debentures, bonds or other
securities sold by the Company for money borrowed and capitalized lease
obligations; (ii) all indebtedness of others of the kinds described in the
preceding clause (i) assumed or guaranteed in any manner by the Company or in
effect guaranteed by the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable); (iv) certain
obligations of the Company for the reimbursement of any obligor on any letter of
credit, banker's acceptance, security purchase facility, surety bond or similar
credit transaction entered into in the ordinary course of business of the
Company; and (v) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (i), (ii), (iii) or (iv),
unless, in the case of any particular indebtedness, capitalized lease
obligation, guarantee, renewal, extension or refunding, the instrument creating
or evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding is subordinated
to or is pari passu with the Securities.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal, together with any accrued and unpaid
interest (including Additional Interest), of such Security or such installment
of interest is due and payable.
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"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "Voting Stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Tax Event" means, with respect to an issuance of Securities of a
particular series, the receipt by a Trust or the Company, as the case may be, of
an Opinion of Counsel experienced in such matters to the effect that a relevant
tax law change has occurred after the date specified in the prospectus
supplement or in the authorizing Board Resolution with respect to the related
issuance of Preferred Securities. For purposes of the preceding sentence a
relevant tax law change is any amendment or change to (or officially proposed
amendment or change to) the laws (including regulations thereunder) of the
United States or any political subdivision or taxing authority thereof, or the
publication of any judicial opinion interpreting such laws (or regulations) or
any written interpretation of such laws (or regulations) by any governmental
authority having jurisdiction to enforce or administer such laws (or
regulations) (including official and unofficial opinions purporting to apply
such laws and regulations to other Persons who have issued securities similar to
the Securities), which amendment, change, proposed amendment or change, opinion
or interpretation could, if valid and enacted or applied to such Trust or the
Company, result in (i) such Trust, either currently or within 90 days of the
date thereof, becoming subject to United States federal income tax with respect
to interest received on the Securities, (ii) interest payable by the Company on
the Securities attributable to the Preferred Securities, either currently or
within 90 days of the date thereof, becoming nondeductible for United States
federal income tax purposes or (iii) such Trust, either currently or within 90
days of the date thereof, becoming subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Trust Agreement" means any agreement establishing a Trust, as the
same may be amended, modified, supplemented or restated.
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"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee, and if at any time there is more
than one such person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) 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, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository 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
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this
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Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such certificate
or opinion shall be given in the form of an Officers' Certificate, if to be
given by an officer of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirement set forth in this Indenture.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
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Indenture to be given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders in
person or by their agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.
<PAGE>
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(d) The ownership of Securities shall be proved by
the Securities Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
SECTION 105. Notices, Etc. to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, Attention:
Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture, Attention: Secretary, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at such Holder's address as it appears in the Securities
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in a notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other
<PAGE>
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Holders. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to (a) a direct or indirect wholly
owned Subsidiary, provided that, in the event of any such assignment, the
Company will remain liable for all such obligations and (b) to any other Person
in accordance with the provisions of Article Eight of this Indenture. This
Indenture may not otherwise be assigned by the parties hereto. Subject to the
foregoing, this Indenture is binding upon and inures to the benefit of the
parties hereto and their respective successors and assigns.
<PAGE>
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SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness, the holders of Preferred
Securities (to the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest on or principal of the Securities shall 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 of interest on or principal of
the Securities, as the case may be, shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity.
<PAGE>
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ARTICLE TWO
FORM OF SECURITIES
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the forms
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of such Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed, engraved
or produced by any combination of these or other methods, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART
FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN
PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE
<PAGE>
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THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
SECTION 203. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
------------------------------,
as Trustee
By:___________________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of such series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other
Securities of
<PAGE>
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the series pursuant to Section 304, 305, 306, 906 or 1207 and except for
any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series
shall 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;
(4) the date or dates on which the principal
of any Securities of the series is payable;
(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the extent to which Additional Interest
Attributable to Deferral, if any, shall be payable in respect of any
Securities of such series, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall
be payable, the Regular Record Date for any such interest payable on any
Interest Payment Date and the right, if any, of the Company to extend the
interest payment periods and the duration of such extension (an "Extension
Period");
(6) the place or places where the principal
of and any premium and interest on any Securities
of the series shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which any Securities of the series may
be redeemed, in whole or in part, at the option of the Company and, if
other than by a Board Resolution, the manner in which any election by the
Company to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or repurchase
any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof, and the period or
periods within which, the price
<PAGE>
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or prices at which and the terms and conditions upon which any Securities
of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
(9) if other than denominations of $25 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(11) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies or currency units other
than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made
shall be payable, the periods within which and the terms and conditions
upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);
(13) if other than the entire principal amount thereof, the portion
of the principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
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(14) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and in such case, the respective Depositaries designated for such Global
Securities, the form of any legend or legends which shall be borne by any
such Global Security in addition to or in lieu of that set forth in
Section 202 and any circumstances in addition to or in lieu of those set
forth in clause (2) of the last paragraph of Section 305, in which any
such Global Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in part
may be registered, in the name or names of Persons other than the
Depositary for such Global Security or a nominee thereof;
(15) any addition to or change in the Events of Default which apply
to any Securities of the series and any change in the right of the Trustee
or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 502;
(16) any addition to or change in the
covenants set forth in Article Ten which applies
to Securities of the series; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
<PAGE>
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delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered
form, without coupons, and only in denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
<PAGE>
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(1) if the form of such Securities has been established by or
pursuant to Board Resolutions as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolutions as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities or this Indenture or otherwise in a manner which
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
<PAGE>
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No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of any authorized
denominations. Until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant Section 1002 being herein sometimes
collectively referred to as the "Securities Register") in which, subject to
<PAGE>
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such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Securities Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a
series at an office or agency of the Company designated pursuant to Section 1002
for such purpose for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series of any authorized
denominations and of a like aggregate principal amount.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed, by the
Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1207 not involving any transfer.
<PAGE>
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If the Securities of any series (or of any series and specified
tenor) are to be redeemed in part, the Company will not be required to issue,
register the transfer of or exchange any Securities of that series (or of that
series and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities that may be selected for redemption and ending
at the close of business on the day of such mailing.
The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such
Global Security or a nominee thereof unless (A) such Depositary (i) has
notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing
agency registered under the Exchange Act at a time when the Depositary is
required to be so registered to act as such Depositary, (B) there shall
have occurred and be continuing an Event of Default with respect to such
Global Security, (C) the Company in its sole discretion determines that
such Global Security shall be so exchangeable, or (D) there shall exist
such circumstances, if any, in addition to or in lieu of the foregoing as
have been specified for this purpose as contemplated by Section 301.
(3) Subject to clause (2) above, any
exchange of a Global Security for other Securities
may be made in whole or in part, and all
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Securities issued in exchange for a Global Security or any portion thereof
shall be registered in such names as the Depositary for such Global
Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906
or 1207 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute, and the Trustee shall authenticate and deliver in exchange
therefor, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute, and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses
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(including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) the Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the
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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
be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such series
at such Holder's address as it appears in the Securities Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities may be
listed, and, if so listed, upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration
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of transfer of or in exchange for or in lieu of any other Security shall carry
the rights to interest accrued and unpaid, and to accrue (including in each such
case Additional Interest), which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 307) interest (including Additional Interest) on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months and, for any
period shorter than a full monthly period, shall be computed on the basis of the
actual number of days elapsed in such period.
SECTION 311. Right of Set-Off.
Notwithstanding anything to the contrary in this
Indenture, the Company shall have the right to set-off any
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payment it is otherwise required to make hereunder to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under a Parent Guarantee.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities of any series may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(a) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Securities
for whose payment money or U.S. Government Obligations have theretofor
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(b) all such Securities not theretofore
delivered to the Trustee for cancellation:
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(i) have become due and payable; or
(ii) will become due and payable at
their Stated Maturity within one year; or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds (a) money in the
necessary amount or (b) U.S. Government Obligations, the principal of and
the interest on which when due, and without any regard to reinvestment
thereof, in the opinion of an independent accountant, and, in the opinion
of the officers of the Company executing an Officers' Certificate to that
effect, will provide moneys which, together with the moneys, if any,
deposited with or held by the Trustee, shall be sufficient to pay when due
the principal of, premium, if any, and interest due and to become due on
said Securities or portions thereof on the Redemption Date or the Stated
Maturity thereof, as the case may be, in trust to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest (including Additional
Interest to the date of deposit) to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Company has paid or caused to be
paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
<PAGE>
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money or
U.S. Government Obligations shall have been deposited with the Trustee pursuant
to subclause (b) of clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such deposited money and the money from
U.S. Government Obligations have been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to Securities
of any series, means any one of the following events that has occurred and is
continuing (whatever the reason for such Event of Default and whether it shall
be occasioned by the provisions of Article Eleven or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) failure for 30 days to pay any interest on the Securities of
that series, including any Additional Interest in respect thereof, when
due (subject to the deferral of any due date in the case of an Extension
Period); or
(2) failure to pay any principal on the Securities of that series
when due whether at Stated Maturity, upon redemption, by declaration of
acceleration or otherwise; except that, in the
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event of an optional redemption, the failure to redeem any Security which
is the result of the Company's failure to deposit on or before the
Redemption Date with the Trustee (and/or having irrevocably directed the
Trustee to apply, from money held by it available to be used for the
redemption of Securities) an amount in cash sufficient to redeem all of
the Securities to be redeemed, shall not be an Event of Default, but shall
be deemed a rescission of the call for redemption; or
(3) failure to observe or perform in any material respect any other
covenant relating to a particular series contained in this Indenture for
90 days after written notice to the Company from the Trustee or the
holders of at least 25% in principal amount of the Outstanding Securities
of that series; or
(4) a decree or order is entered by a court having jurisdiction in
the premises (i) for relief in respect of the Company in an involuntary
case or proceeding under the Federal Bankruptcy Code or any other federal
or state bankruptcy, insolvency, reorganization or similar law or (ii)
adjudging the Company a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under the Federal Bankruptcy Code or any other applicable federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) of the Company or of any
substantial part of any of its properties, or ordering the winding up or
liquidation of any of its affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or
(5) the Company institutes a voluntary case or proceeding under the
Federal Bankruptcy Code or any other applicable federal or state law or
any other case or proceedings to be adjudicated a bankrupt or insolvent,
or the Company consents to the entry of a decree or order for relief in
respect of the Company in any involuntary case or proceeding under the
Federal Bankruptcy Code or
<PAGE>
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any other applicable federal or state law or to the institution of
bankruptcy or insolvency proceedings against the Company, or the Company
files a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other applicable federal or state
law, or consents to the filing of any such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the Company or of
any substantial part of its property, or makes an assignment for the
benefit of creditors, or admits in writing its inability to pay its debts
generally as they become due or takes corporate action in furtherance of
any such action.
SECTION 502. Acceleration of Maturity;
Rescission and Annulment.
If an Event of Default with respect to the Securities of any series
at the time Outstanding occurs and is continuing, then and in every such case,
the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities of that series or the holders of at least 25% in
aggregate liquidation amount of the Preferred Securities then outstanding of the
Trust to which such series of securities has been issued shall have the right to
declare the principal of and the interest (including any Additional Interest) on
all the Securities of that series and any other amounts payable hereunder to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders or the holders of such Preferred Securities) and
shall have the right to enforce any and all other rights of Holders of
Securities of that series as creditors with respect to the Securities of that
series. Upon any such declaration, such principal and all accrued interest shall
become immediately due and payable.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided in this Article, the Holders of a
majority in principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
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(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay,
(A) all overdue interest (including any
Additional Interest) on all Securities of that
series,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by such Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Interest) on any Security when such interest becomes due and
payable and such default continues for a period of 30 days (subject to the
deferral of any due and payable interest in the case of an Extension
Period), or
(2) default is made in the payment of the principal
of any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Interest), at
the rate borne by the Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses
<PAGE>
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of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relating to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
<PAGE>
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SECTION 505. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Subject to Article Eleven, any money or U.S. Government Obligations
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest (including any
Additional Interest), upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Interest) on the
Securities 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 interest (including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any holder of Preferred
Securities of the Trust to which such series of Securities has been issued shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this
<PAGE>
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Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder or holder of Preferred Securities has previously
given written notice to the Trustee of a continuing Event of Default with
respect to Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series or the holders of at least 25% in
aggregate liquidation amount of the Preferred Securities then outstanding
of the Trust to which such series of securities has been issued shall have
made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders or holder or holders of Preferred
Securities have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series
or the holders of a majority in aggregate liquidation amount of the
Preferred Securities then outstanding of the Trust to which such series of
securities has been issued;
it being understood and intended that no one or more Holders or holders of
Preferred Securities shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders or holders of Preferred Securities, or
to obtain or to seek to obtain priority or preference over any other Holders or
holders of Preferred Securities or to enforce any right under this Indenture,
except in the manner herein
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provided and for the equal and ratable benefit of all the
Holders or holders of Preferred Securities.
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest
(including any Additional Interest) on such Security on the Stated Maturity
(subject to the deferral of any due date for the payment of interest in the case
of an Extension Period) expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture, and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holder shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holder shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict
with any rule of law or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 905 hereof, the Holders of not less than
a majority in principal amount of the Outstanding Securities of any series may
on behalf of the Holders of all the Securities of such series waive any past
default hereunder and its consequences, except a default
(1) in the payment of the principal of or interest (including any
Additional Interest) on any Security of such series (unless such default
has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration have been
deposited with the Trustee); or
(2) 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.
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Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such court
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company or the Trustee or
in any suit for the enforcement of the right to receive the principal of and
interest (including any Additional Interest) on any Security.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(1) Except during the continuance of an
Event of Default,
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(A) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(B) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(2) 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
(A) this Subsection shall not be
construed to limit the effect of Subsection
(1) of this Section;
(B) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(C) the Trustee shall not be liable
with respect to any action taken or omitted
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to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 512 relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of such
series.
Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
If any default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(3) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any Event of
Default unless the Trustee shall have received written notice, or a Responsible
Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.
For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
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SECTION 603. Certain Rights of the Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice, which may be
counsel to the Company, and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
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(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Paying Agent, any Securities Registrar, or any
other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it
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were not Trustee, Paying Agent, Security Registrar, or such
other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based on the income of the
Trustee), incurred without negligence or bad faith on its part, 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 or lia bility in connection with the exercise or performance of any
of its powers or duties hereunder.
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To secure the Trustee's rights under this Section, the Trustee shall have a lien
against any money or other property collected hereunder. The provisions of this
Section shall survive the termination of this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by and subject to
the provisions of the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder with respect to the
Securities of each series, which may be a Trustee hereunder for Securities of
one or more other series. Each Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal;
Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by such successor Trustee under Section 611.
(b) The Trustee may resign at any time with
respect to the Securities of one or more series by
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giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the
Trustee within 60 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, or
(4) an Event of Default has not
occurred and is not continuing,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee
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with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, with respect to the Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Securities of any
particular series). If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment, become the successor Trustee with respect to Securities
of such series and supersede the successor Trustee with respect to the
Securities of any series appointed by the Company. If no successor Trustee
with respect to the Securities of any series shall have been so appointed
by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to
the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of
any series to all Holders of Securities of such series in the manner
provided in Section 106. Each notice shall include the
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name of the successor Trustee with respect to the Securities of such
series and the address of such successor Trustee's Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee with respect to all Securities appointed
hereunder shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
provided that, on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its reasonable 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.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or
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trusts hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
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 the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
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SECTION 613. Preferential Collection of Claims Against
Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to
the Trustee
(a) semiannually, not later than February 15 and August 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of a
date not more than 15 days prior to the delivery thereof, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished; excluding from any such list names and
addresses received by the Trustee in its capacity as Securities Registrar.
SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or
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under the Securities, and the corresponding rights and duties of the Trustee,
shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company, the Trustee or
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission. Delivery of such reports, information and documents to the Trustee
is for informational purposes only, and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain
Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any 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, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation,
partnership, trust or other entity shall be organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, the due and punctual payment of
the principal of and interest (including any Additional Interest) on all
the Securities and the performance or observance of every covenant of this
Indenture, any Trust Agreement, any Parent Guarantee and any Expense
Agreement on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) such consolidation or merger or conveyance,
transfer or lease of properties or assets of the Company
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does not give rise to any breach or violation of, any
Trust Agreement or any Parent Guarantee; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of
the covenants of the Company herein and in the Securities;
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities
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(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 or in the Securities conferred upon the Company;
(3) to cure any ambiguity or to correct any
provision herein which may be defective or inconsistent
with any other provision herein;
(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 905 or otherwise;
(5) to evidence and provide for the acceptance of the appointment of
a successor Trustee with respect to the Securities of one or more series
hereunder and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 611;
(6) to establish the form or terms of Securities of
any series as permitted by Sections 201 and 301; or
(7) to make any other change that does not adversely affect the
rights of any Holder.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of,
or any installment of interest (including any Additional
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Interest) on, any Security, or reduce the principal amount thereof or the
rate of interest thereon, or change the place of payment where, or the
coin or currency in which, any Security or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse to
the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders if required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1005, except to increase any such percentage (referred to in
clause (2), above) or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder
of each Outstanding Security affected thereby;
provided, that, so long as any of the Preferred Securities remain outstanding,
no such amendment shall be made that adversely affects the holders of the
Preferred Securities and no waiver of any Event of Default or compliance with
any covenant under this Indenture shall be effective, without the prior consent
of the holders of at least a majority of the aggregate liquidation amount of the
outstanding Preferred Securities unless and until the Securities and all accrued
and unpaid interest (including any Additional Interest) thereon have been paid
in full.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee and the Company,
to any such supplemental indenture may be prepared and executed by the Company
and authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
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ARTICLE TEN
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest on the Securities of each series in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the United States an office or agency
for each series of Securities where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange, where Securities of that series may be
surrendered for conversion and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in the United States) where the securities of one or more
series may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the United States for each series
of Securities for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. Money for Payments on Securities to
Be Held in Trust.
If the Company shall at any time act as its own
Paying Agent with respect to any series of Securities, it will,
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on or at the option of the Company before each due date of the principal of or
interest on any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to 12:00 noon, New York time, on each due
date of the principal of or interest on any Securities of that series, deposit
with a Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee or the Company to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 1003, that such Paying Agent will (i)
comply with the provisions of the Trust Indenture Act applicable to it as a
Paying Agent and (ii) during the continuance of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment in respect of the Securities of that series, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest on
any Security of any series and remaining unclaimed for two years after such
principal or interest has become due and payable shall be paid to the
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Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the material terms, provisions or conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder) and,
if the Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
SECTION 1005. Additional Covenants.
The Company covenants and agrees for the benefit of the Holders of
Securities of each series that it will not declare or pay any dividends or
distributions (other than dividends or distributions in capital stock of the
Company or other securities ranking junior in right of payment to the Securities
of a particular series) on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock or any security ranking pari
passu with or junior in right of payment to the Securities of such series, or
make any guarantee payments with respect to the foregoing (other than pro rata
payments under the Parent Guarantee and any similar Parent Guarantees issued by
the Company on behalf of the holders of Preferred Securities issued by any
issuer holding Securities) or repurchase, or cause any of the Subsidiaries to
repurchase, any securities of the Company ranking pari passu with or junior in
right of payment to the Securities of such series (except for payments made on
any series of Securities upon the stated maturity of such Securities); provided
that the Company may redeem, purchase, acquire or make a liquidation payment
with respect to any of
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its capital stock or any security ranking pari passu with or junior in right of
payment to the Securities of such series, make any guarantee payment with
respect to the foregoing or repurchase, or cause any of its subsidiaries to
repurchase, any security of the Company ranking pari passu with or junior in
right of payment to the Securities of such series with securities (or the
proceeds from the issuance of securities) having no higher ranking than the
capital stock or the other securities which are to be redeemed, purchased, or
acquired, with respect to which a liquidation payment is to be made, to which a
guarantee payment is to be made with respect to the foregoing or which are to be
repurchased, if at such time (i) there shall have occurred any event of which
the Company has actual knowledge that (a) with the giving of notice or the lapse
of time or both, would constitute an Event of Default hereunder with respect to
Securities of such series and (b) which the Company shall not have taken
reasonable steps to cure, (ii) the Company shall be in default with respect to
its payment of any obligations under a Parent Guarantee relating to the
Preferred Securities of the Trust corresponding to which the Securities of such
series have been issued or (iii) the Company shall have given notice of its
selection of an Extension Period as provided herein with respect to Securities
of such series and such period, or any extension thereof, shall have commenced
and be continuing.
The Company also covenants, for the benefit of the Holders of
Securities of each series, (i) not to transfer ownership of the Common
Securities of the Trust to which the Securities of such series have been issued
to any person other than an Affiliate of the Company or a successor of the
Company permitted under Article Eight of this Indenture; provided that no such
transfer shall result in (x) the Trust being considered an "investment company"
that is required to be registered under the Investment Company Act of 1940, as
amended, or (y) the Trust not being taxed as a grantor trust for United States
Federal income tax purposes; (ii) not to voluntarily dissolve, wind up or
terminate such Trust, except in connection with a distribution of the Securities
of such series to the holders of the corresponding Preferred Securities in
liquidation of such Trust or in connection with certain mergers, consolidations
or amalgamations permitted by the Trust Agreement relating to such Trust and
(iii) to use its reasonable efforts, consistent with the terms and provisions of
such Trust Agreement, to cause such Trust to remain a grantor trust and not to
be classified as an association taxable as a corporation for United States
Federal income tax purposes.
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ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
such Holder's acceptance thereof, likewise covenants and agrees that,
notwithstanding anything to the contrary contained herein, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Securities and the payment of the principal of and premium, if any, and
interest on each and all of the Securities are hereby expressly made subordinate
and subject in right of payment to the prior payment in full in cash or cash
equivalents of all Senior Indebtedness (including any interest accruing after
the occurrence of an Event of Default under Section 501(4) or (5)).
SECTION 1102. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its assets, or
(b) any liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company, then and in any such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or cash equivalents of all amounts due or to
become due on or in respect of all Senior Indebtedness, or provision shall
be made for such payment in cash or cash equivalents, before the Holders
of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article Eleven, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other
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indebtedness of the Company being subordinated to the payment of the
Securities (except, so long as the effect of this parenthetical clause is
not to cause the Securities to be treated in any case or proceeding or
similar event described in Subsection (a), (b) or (c) of this Section 1102
as part of the same class of claims as the Senior Indebtedness or any
class of claims on a parity with or senior to the Senior Indebtedness, for
any such payment or distribution of securities which (i) are unsecured,
(ii) have an average life and final maturity no shorter than the average
life and final maturity of the Securities and (iii) are subordinated, to
at least the same extent as the Securities, to the payment of all Senior
Indebtedness then outstanding), shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their Representative or
Representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid
on account of the principal of, and premium, if any, and interest on, and
other amounts due on or in connection with, the Senior Indebtedness to the
extent necessary to make payment in full in cash or cash equivalents of
all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have
received any such payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being subordinated
to the payment of the Securities, before all Senior Indebtedness is paid
in full or payment thereof provided for, then and in such event such
payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of the
Company for application to the payment of all Senior Indebtedness
remaining unpaid to
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the extent necessary to pay all Senior Indebtedness in full in cash or
cash equivalents, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
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, transfer or lease of its properties and assets
substantially as an entirety to another corporation upon the terms and
conditions set forth in Article Eight shall not be deemed a dissolution, winding
up, liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section 1102 if the corporation formed by such consolidation or into which the
Company is merged or the corporation which acquires by conveyance, transfer or
lease such properties and assets substantially as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance, transfer or
lease, comply with the conditions set forth in Article Eight.
SECTION 1103. No Payment When Senior Indebtedness in Default.
(i) In the event of and during the continuation of any default in
the payment of principal of (or premium, if any) or interest on any Senior
Indebtedness or (ii) in the event that any other event of default with respect
to any Senior Indebtedness shall have occurred and be continuing and shall have
resulted in such Senior Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable, then
no payment shall be made by the Company on account of the principal of (or
premium, if any) or interest on the Securities or on account of the purchase or
redemption or other acquisition of Securities unless and until such payment
default shall have been cured or waived or shall have ceased to exist or such
acceleration shall have been rescinded or annulled or the holders of such Senior
Indebtedness or their agents have waived the benefits of this Section.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be received and held in trust for the holders of Senior Indebtedness and shall
be paid over or delivered to the Representative of Senior
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Indebtedness then outstanding to the extent necessary to pay in full in cash or
cash equivalents all Senior Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 1102 would be applicable.
SECTION 1104. Payment Permitted if No Default.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 1102 or under the conditions
described in Section 1103, from making payments at any time of principal of (and
premium, if any) or interest on the Securities.
SECTION 1105. Subrogation to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to Senior Indebtedness of the Company to the same extent as the
Securities are subordinated and which is entitled to like rights of subrogation)
to the rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
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SECTION 1106. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of (and premium, if any) and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the express limitations set forth in Article
Five and to the rights, if any, under this Article of the holders of Senior
Indebtedness (1) in any case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section 1102, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 1103, to prevent any payment prohibited by such
Section.
SECTION 1107. Trustee to Effectuate Subordination.
Each Holder of a Security 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 and appoints the Trustee his attorney-in-fact for any and all such
purposes.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eleven, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of
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Senior Indebtedness and, subject to the provisions of Section 601, the Trustee
shall not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to holders of Securities, the Company or any other Person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue of
this Article Eleven or otherwise.
SECTION 1108. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Eleven or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (b) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (c) release any Person liable in any manner for
the collection of Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 1109. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payments to or by the Trustee in respect of the Securities, unless
and until the Trustee
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shall have received written notice thereof at the Corporate Trust Office of the
Trustee from the Company or a holder of Senior Indebtedness or from any trustee,
fiduciary or agent therefore; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 602, 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 1109
at least three 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 (and premium, if any) or interest on any Security),
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 purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within three Business
Days prior to such date. Nothing in this Section 1109 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Sections 1102 and 1103.
Subject to the provisions of Section 602, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing such Person to be a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, 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 1110. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 602, and
the Holders of the
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Securities shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 1111. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be 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.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.
SECTION 1112. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article Eleven in addition to or in place of the Trustee;
provided, however, that (i) Section 1111 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent and (ii)
any notice required by this Article Eleven to be given by the holders of, or a
Representative for, Senior Indebtedness need only be given to the Trustee and
not to any Paying Agent.
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ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1201 shall be evidenced by a Board Resolution or in another manner
specified as contemplated by Section 301 for such Securities. In case of any
redemption at the election of the Company, the Company shall, at least 30 days
and no more than 90 days prior to the Redemption Date fixed by the Company,
notify the Trustee of such Redemption Date and of the principal amount of
Securities to be redeemed and provide a copy of the notice of redemption given
to Holders of Securities to be redeemed pursuant to Section 1204.
SECTION 1203. Selection by Trustee of Securities
to Be Redeemed.
If less then all the Securities of any series are to be redeemed
(unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 90 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method (including pro rata or by
lot) as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions (equal to $25 or any integral multiple
thereof) of the principal amount of the Securities of such series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in
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whole or in part. In the case of any such redemption in part, the unredeemed
portion of the principal amount of the Security shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 90 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Securities Register. If at the time of mailing of any notice of redemption
the Company shall not have deposited with the Trustee (and/or irrevocably
directed the Trustee to apply, from money held by it available to be used for
the redemption of Securities) an amount in cash sufficient to redeem all of the
Securities to be redeemed, including accrued interest to such Redemption Date,
such notice shall state that the proposed redemption to which such notice
relates is subject to the deposit of such amount with the Trustee on or before
the Redemption Date.
All notices of redemption shall identify the Securities to be
redeemed (including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of the partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount
of the particular Security to be redeemed,
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(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(5) the place or placement where such Securities are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1205. Deposit of Redemption Price.
Prior to 12:00 noon, New York time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid and the Company
having on or before the Redemption Date deposited with the Trustee (and/or
having irrevocably directed the Trustee to apply, from money held by it
available to be used for the redemption of Securities) an amount in cash
sufficient to redeem all of the Securities to be redeemed, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date, such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
<PAGE>
-74-
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, such Security shall remain outstanding and
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Security.
SECTION 1207. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
---------------
<PAGE>
-75-
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SOUTHWESTERN PUBLIC SERVICE COMPANY
By:/s/ Bill D. Helton
----------------------------
Name: Bill D. Helton
Title: Chairman of the Board
Attest:
/s/ Mary Pullum
- --------------------------
Name: Mary Pullum
Title: Assistant Secretary
WILMINGTON TRUST COMPANY
By:/s/ Donald G. MacKelcan
------------------------------
Name: Donald G. MacKelcan
Title:Assistant Vice President
Attest:
- ---------------------------
Name:
Title:
SOUTHWESTERN PUBLIC SERVICE COMPANY
TO
WILMINGTON TRUST COMPANY,
AS TRUSTEE
--------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of October 21, 1996
TO
INDENTURE
Dated as of October 21, 1996
---------------------
7.85% Deferrable Interest Subordinated
Debentures, Series A Due 2036
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of October 21, 1996 (the
"First Supplemental Indenture"), between Southwestern Public Service Company, a
New Mexico corporation (the "Company"), and Wilmington Trust Company, as trustee
(the "Trustee") under the Indenture, dated as of October 21, 1996, from the
Company to the Trustee (the "Indenture") (terms used but not defined herein are
used as defined in the Indenture).
WHEREAS, the Company has executed and delivered the Indenture to the
Trustee in order to provide for the future issuance of its subordinated
debentures (the "Securities"), such Securities to be issued from time to time in
one or more series as may be determined by the Company under the Indenture, in
an unlimited aggregate principal amount that may be authenticated and delivered
thereunder as provided in the Indenture;
WHEREAS, Southwestern Public Service Capital I (the "Series A
Trust") may, pursuant to the Underwriting Agreement dated October 16, 1996 among
the Company, the Series A Trust and the Underwriters named therein, issue
$100,000,000 aggregate liquidation preference of its 7.85% Trust Preferred
Securities, Series A (the "Series A Preferred Securities") with a liquidation
amount of $25 per Series A Preferred Security;
WHEREAS, the Company is guaranteeing (the "Parent Guarantee") the
payment of distributions on the Series A Preferred Securities, the payment of
the Redemption Price and the payment on liquidation with respect to the Series A
Preferred Securities, to the extent provided in the Guarantee Agreement, of even
date herewith between the Company and Wilmington Trust Company, as guarantee
trustee for the benefit of the holders of the Series A Preferred Securities;
WHEREAS, the Company wishes to sell to the Series A Trust, and the
Series A Trust wishes to purchase from the Company, Series A Securities (as
defined below) in an aggregate principal amount equal to $103,092,775, and in
satisfaction of the purchase price for such Series A Securities, the
administrative trustees of the Series A Trust, on behalf of the Series A Trust,
wish to (i) execute and deliver to the Company Common Securities certificates
evidencing an ownership interest in the Series A Trust, registered in the name
of the Company, having an aggregate liquidation amount of $3,092,775 and (ii)
deliver to the Company the sum of $100,000,000;
WHEREAS, the Company has duly authorized the creation of an issue of
its 7.85% Deferrable Interest Subordinated Debentures, Series A Due 2036 (the
"Series A Securities"), of the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this First Supplemental Indenture; and
<PAGE>
-2-
WHEREAS, all things necessary to make the Securities, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this First
Supplemental Indenture a valid agreement of the Company, each in accordance with
their terms, have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase of the
Series A Securities by the Holders thereof, it is mutually agreed, for the equal
and proportionate benefit of all Holders of the Series A Securities as follows:
ARTICLE ONE
GENERAL TERMS OF THE SERIES A SECURITIES
SECTION 101. Title; Stated Maturity; Interest.
The aggregate principal amount of Securities which may be
authenticated and delivered under this First Supplemental Indenture is limited
to $103,092,775 except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 303, 304, 305, 306, 906 or 1207 of the Indenture.
The Securities shall be known and designated as the "7.85%
Deferrable Interest Subordinated Debentures, Series A due 2036" of the Company.
Their Stated Maturity shall be September 1, 2036, and they shall bear interest
at the rate of 7.85% per annum, from October 21, 1996 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, as
the case may be, payable quarterly (subject to deferral as set forth herein), in
arrears, on March 1, June 1, September 1 and December 1 of each year, commencing
December 1, 1996 until the principal thereof is paid or made available for
payment. Additional Interest Attributable to Deferral will compound quarterly
and will accrue at the rate of 7.85% per annum on any interest installment in
arrears for more than one quarter or during an extension of an interest payment
period as set forth below. In the event that any date on which interest is
payable on the Securities is not a Business Day, then a payment of the interest
payable on such date will be made on the next succeeding day which is a Business
Day except that, if
<PAGE>
-3-
such Business Day is in the next succeeding calendar year, such
Interest Payment Date shall be the immediately preceding Business Day (and
without any interest or other payment in respect of any such delay).
The Company shall have the right, at any time while any Series A
Securities are outstanding, from time to time to extend the interest payment
period thereon for up to 20 consecutive quarters (the "Extension Period") during
which period interest will compound quarterly and the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and at
the end of which Extension Period the Company shall pay all interest then
accrued and unpaid thereon (together with Additional Interest Attributable to
Deferral at the rate specified for the Series A Securities to the extent
permitted by applicable law); provided that the Company shall not defer the
interest payment period with respect to Additional Interest Attributable to
Taxes and shall make payment thereof on the relevant Interest Payment Date;
provided further that during any such Extension Period, the Company shall not
declare or pay any dividends or distributions (other than dividends or
distributions in capital stock of the Company or other securities, including
other securities ranking junior in right of payment to the Series A Securities)
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock or any security ranking pari passu with or junior in
right of payment to the Series A Securities, or make any guarantee payment with
respect to the foregoing (other than pro rata payments under the Parent
Guarantee and any similar Parent Guarantees issued by the Company on behalf of
the holders of Preferred Securities issued by any issuer holding Securities) or
repurchase, or cause any of its Subsidiaries to repurchase, any security of the
Company ranking pari passu with or junior in right of payment to the Series A
Securities (except for payments made on any series of Securities upon the stated
maturity of such Securities); provided that the Company may redeem, purchase,
acquire or make a liquidation payment with respect to any of its capital stock
or any security ranking pari passu with or junior in right of payment to the
Series A Securities, make any guarantee payment with respect to the foregoing or
repurchase, or cause any of its subsidiaries to repurchase, any security of the
Company ranking pari passu with or junior in right of payment to the Series A
Securities with securities (or the proceeds from the issuance of securities)
having no higher ranking than the capital stock or the other securities which
are to be redeemed, purchased, or acquired, with respect to which a liquidation
payment is to be made, to
<PAGE>
-4-
which a guarantee payment is to be made with respect to the foregoing or which
are to be repurchased. Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period, provided that such
Extension Period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters or extend beyond the Stated Maturity or
the Redemption Date of the Series A Securities. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due, the Company may select a new Extension Period,
subject to the foregoing requirements. Except for Additional Interest
Attributable to Taxes, no interest shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give the Series A Trust,
the Administrative Trustees of the Series A Trust and the Trustee notice of its
selection of such Extension Period, subject to the above requirements, at least
one Business Day prior to the earlier of (i) the related Interest Payment Date
or (ii) the date the Series A Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders of
the Series A Preferred Securities of the record date or the date such
distributions are payable, but in any event not less than one Business Day prior
to such record date. The Trustee shall promptly notify the Holders of the Series
A Preferred Securities and the Administrative Trustees of the Series A Trust of
the Company's selection of such an Extension Period.
The principal of and interest on the Series A Securities shall be
payable at the office or agency of the Company in the United States maintained
for such purpose and at any other office or agency maintained by the Company for
such purpose in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, payment of interest may
be made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register; provided further, that for so long as any Series A Security is
registered in the name of the Property Trustee, payment of principal (including
Redemption Price and interest) shall be made by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Property Trustee.
<PAGE>
-5-
The Series A Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Eleven of the Indenture. The Series A
Securities shall be pari passu with the Parent Guarantee.
The Series A Securities shall be redeemable as provided in Section
102 below and in Article Twelve of the Indenture.
SECTION 102. Redemption.
At any time on or after October 21, 2001, the Company shall have the
right to redeem the Series A Securities, in whole or in part, from time to time,
at a Redemption Price equal to 100% of the principal amount of Series A
Securities to be redeemed plus accrued but unpaid interest, including any
Additional Interest, if any, to the Redemption Date.
If a Tax Event or an Investment Company Act Event shall occur and be
continuing or upon the event of the termination or liquidation of the Series A
Trust pursuant to an order for the dissolution, termination, or liquidation of
the Series A Trust entered by a court of competent jurisdiction, the Company
shall have the right to redeem the Series A Securities in whole but not in part,
at a Redemption Price equal to 100% of the principal amount thereof plus accrued
but unpaid interest, including Additional Interest, if any, to the Redemption
Date.
For so long as the Series A Trust is the Holder of all Series A
Securities Outstanding, the proceeds of any redemption described in this Section
102 shall be used by the Series A Trust to redeem Series A Preferred Securities
in accordance with their terms. The Company shall not redeem the Series A
Securities in part unless all accrued and unpaid interest (including any
Additional Interest) has been paid in full on all Series A Securities
Outstanding for all quarterly interest periods terminating on or prior to the
Redemption Date.
SECTION 103. Global Security.
If the Series A Trust is not the sole Holder of the Series A
Securities, in order to utilize a book-entry-only system for all or any portion
of the Series A Securities, all or a portion of the Series A Securities may be
issued in the form of one or more fully-registered Global Securities for the
<PAGE>
-6-
aggregate principal amount of such Series A Securities (the "Series A Global
Securities"), which Series A Global Securities shall be registered in the name
of the Depositary selected by the Company or in the name of such Depositary's
nominee. The initial Depositary shall be The Depository Trust Company. Each
Series A Global Security shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction.
If an event described under Clause (2) of Section 305 of the
Indenture shall occur, then this Section 103 shall no longer be applicable to
the Series A Global Securities, and the Company will execute, and the Trustee
will authenticate and deliver (subject to receipt of an Officer's Certificate
evidencing the Company's determination if the Company has exercised its rights
under Clause (2)(C) of Section 305), Series A Securities in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Series A Global
Securities in exchange for such Series A Global Securities. Upon the exchange of
Series A Global Securities for such Series A Securities in definitive registered
form, the Series A Global Securities shall be cancelled by the Trustee. Such
Series A Securities in definitive registered form issued in exchange for Series
A Global Securities pursuant to this Section 103 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
direct. The Trustee shall deliver such Series A Securities to the Persons in
whose names such Series A Securities are so registered.
Except as provided below, owners solely of beneficial interests in a
Series A Global Security shall not be entitled to receive physical delivery of
Series A Securities in definitive form and will not be considered the Holders
thereof for any purpose under the Indenture.
Members of or participants in the Depositary shall have no rights
under this Supplemental Indenture or the Indenture with respect to any Series A
Global Security held on their behalf by the Depositary, and such Depositary or
its nominee, as the case may be, may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the Holder of such Series A Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
contained herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary
<PAGE>
-7-
or impair, as between the Depositary and its members or participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Series A Security, including without limitation the granting of
proxies or other authorization of participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
ARTICLE TWO
FORM OF SERIES A SECURITY
The Series A Securities are to be in substantially the following
form:
[FORM OF FACE OF SERIES A SECURITY]
SOUTHWESTERN PUBLIC SERVICE COMPANY
% Deferrable Interest Subordinated
Debenture, Series A, due 2036
No. A-___________
$
----------------
SOUTHWESTERN PUBLIC SERVICE COMPANY, a corporation duly organized
and existing under the laws of the State of New Mexico (herein called the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of ________ DOLLARS
($________) on September 1, 2036 and to pay interest on said principal sum from
October 21, 1996 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 1,
June 1, September 1 and December 1 of each year, commencing December 1, 1996, at
the rate of 7.85% per annum plus Additional Interest, if any, until the
principal hereof shall have become due and payable, and on any overdue
principal. The amount of interest payable for any period will be computed on the
basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full monthly period, shall be computed on the basis of the actual
<PAGE>
-8-
number of days elapsed in such period. In the event that any date on which
interest is payable on this Security is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than a
Saturday or a Sunday or a day on which banking institutions in the City of New
York are authorized or required by law or executive order to remain closed or a
day on which the Corporate Trust Office of the Trustee, the principal office of
the property trustee under the Trust Agreement or the principal office of the
Company is closed for business. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities, as defined in the Indenture) is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date or, if this Security is issued in
certificated form, the close of business on the 15th day next preceding such
Interest Payment Date. Any such interest installment not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
The Company shall have the right at any time during the term of this
Security, from time to time, to extend the interest payment period of such
Security for up to 20 consecutive quarters (an "Extension Period"), during which
period interest will compound quarterly and the Company shall have the right to
make partial payments of interest on any Interest Payment Date, and at the end
of which Extension Period the Company shall pay all interest then accrued and
unpaid (together with
<PAGE>
-9-
Additional Interest thereon to the extent that payment of such interest is
permitted by applicable law); provided that the Company shall not defer the
interest payment period with respect to Additional Interest Attributable to
Taxes; provided further that during any such Extension Period, the Company shall
not declare or pay any dividends or distributions (other than dividends or
distributions in capital stock of the Company or other securities ranking junior
in right of payment to the Securities) on, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock or any security
ranking pari passu with or junior in right of payment to this Security, or make
any guarantee payment with respect to the foregoing (other than pro rata
payments under the Parent Guarantee and any similar Parent Guarantees issued by
the Company on behalf of the holders of Preferred Securities issued by any
issuer holding Securities) or repurchase, or cause any of its Subsidiaries to
repurchase, any security of the Company ranking pari passu with or junior in
right of payment to this Security (except for payments made on any series of
securities upon the stated maturity of such securities); provided that the
Company may redeem, purchase, acquire or make a liquidation payment with respect
to any of its capital stock or any security ranking pari passu with or junior in
right of payment to this Security, make any guarantee payment with respect to
the foregoing or repurchase, or cause any of its subsidiaries to repurchase, any
security of the Company ranking pari passu with or junior in right of payment to
this Security with securities (or the proceeds from the issuance of securities)
having no higher ranking than the capital stock or the other securities which
are to be redeemed, purchased, or acquired, with respect to which a liquidation
payment is to be made, to which a guarantee payment is to be made with respect
to the foregoing or which are to be repurchased. Prior to the termination of any
such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all such previous and
further extensions thereof shall not exceed 20 consecutive quarters or extend
beyond the maturity of this Security. Upon the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due, the Company may select a new Extension Period,
subject to the foregoing requirements. No interest shall be due and payable
during an Extension Period except at the end thereof. The Company shall give the
Holder of this Security and the Trustee notice of its selection of an Extension
Period at least one Business Day prior to the earlier of (i) the Interest
Payment Date or (ii) the date the Series A Trust is required to give notice to
<PAGE>
-10-
the New York Stock Exchange or other applicable self-regulatory organization or
to holders of the Series A Preferred Securities of the record date or the date
such distributions are payable, but in any event not less than one Business Day
prior to such record date.
Payment of the principal of and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in
Wilmington, Delaware, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes. Each Holder hereof, by such
Holder's acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture of each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such Holder upon said provisions.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE>
-11-
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: ________, 199
SOUTHWESTERN PUBLIC SERVICE
COMPANY
By:
------------------------
Name:
Title:
Attest:
- ------------------------
FORM OF REVERSE OF SERIES A SECURITY
This Security is one of a duly authorized issue of Securities of the
Company, designated as its 7.85% Deferrable Interest Subordinated Debentures,
Series A, due 2036 (therein called the "Securities"), limited in aggregate
principal amount to $103,092,775 issued under an Indenture, dated as of October
21, 1996 supplemented by a First Supplemental Indenture, dated as of October 21,
1996 (herein called the "Indenture"), between the Company and Wilmington Trust
Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and such supplemental
indentures reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
At any time on or after October 21, 2001, the Company shall have the
right, subject to the terms and conditions of Article Twelve of the Indenture,
to redeem this Security at the option of the Company, without premium or
penalty, in whole or in part, at a Redemption Price equal to 100% of the
principal amount to be redeemed plus accrued but unpaid interest,
<PAGE>
-12-
including Additional Interest, if any, to the Redemption Date. If a Tax Event or
an Investment Company Event (as defined in the Indenture) shall occur and be
continuing, the Company shall have the right, subject to the terms and
conditions of Article Twelve of the Indenture, to redeem this Security at the
option of the Company, without premium or penalty, in whole but not in part, at
a Redemption Price equal to 100% of the principal amount thereof plus accrued
but unpaid interest, including Additional Interest, if any, to the Redemption
Date. Any redemption pursuant to this paragraph will be made upon not less than
30 nor more than 90 days' notice, at the Redemption Price. If the Securities are
only partially redeemed by the Company, the Securities will be redeemed pro
rata, by lot or in such other manner as the Trustee 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 any Security.
In the event of the redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Securities shall occur
and be continuing, the principal of the Securities may be declared due and
payable in the manner, with the effect and subject to the conditions provided in
the Indenture.
The Indenture contains provisions for satisfaction and discharge at
any time of the entire indebtedness of this Security upon compliance by the
Company with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of Holders of the Securities of each series to be
affected of not less than a majority in principal amount of the Outstanding
Securities of such series, to modify the Indenture in a manner affecting the
rights of the Holders of the Securities of such series; provided that no such
modification may, without the consent of the Holder of each Outstanding Security
affected thereby, (i) extend the fixed maturity of the Securities, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest (other than pursuant to an Extension Period) thereon, or reduce any
premium payable upon the redemption thereof, or (ii) reduce the percentage of
principal amount
<PAGE>
-13-
of the Securities, the Holders of which are required to consent to any such
modification of the Indenture. The Indenture also contains provisions permitting
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company, Wilmington Trust Company, 1100
North Market Street, Wilmington, Delaware 19890, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar duly executed by, the Holder hereof or the
Holder's attorney thereunto duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security shall be overdue, and none
of the Company, the Trustee or any such agent shall be affected by notice to the
contrary.
<PAGE>
-14-
The Securities are issuable only in registered form without coupons
in denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each holder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Securities.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 301. Definitions of Terms.
Except as otherwise expressly provided in this First Supplemental
Indenture or in the form of Series A Security otherwise clearly required by the
context hereof or thereof, all terms used herein that are defined in the
Indenture shall have the meanings assigned to them therein.
SECTION 302. 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 303. 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
<PAGE>
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representation as to the validity or sufficiency of this First Supplemental
Indenture.
SECTION 304. 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.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
SOUTHWESTERN PUBLIC SERVICE
COMPANY
By /s/ Bill D. Helton
----------------------------
Name: Bill D. Helton
Title:Chairman of the Board
Attest:
/s/ Mary Pullum
- --------------------------
Name: Mary Pullum
Title: Assistant Secretary
WILMINGTON TRUST COMPANY,
as Trustee
By /s/ Donald G. MacKelcan
--------------------------
Name: Donald G. MacKelcan
Title:Assistant Vice
President
Attest:
- ----------------------------
Name:
Title:
GUARANTEE AGREEMENT
Between
Southwestern Public Service Company
(as Guarantor)
and
Wilmington Trust Company
(as Trustee)
dated as of
October 21, 1996
<PAGE>
CROSS-REFERENCE TABLE (1)
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a) ............................. 4.1(a)
310(b) ............................. 4.1(c), 2.8
310(c) ............................. Inapplicable
311(a) ............................. 2.2(b)
311(b) ............................. 2.2(b)
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(e) ............................. 1.1, 2.5, 3.2
314(f) ............................. 2.1, 3.2
315(a) ............................. 3.1(d)
315(b) ............................. 2.7
315(c) ............................. 3.1
315(d) ............................. 3.1(d)
316(a) ............................. 5.4(a), 2.6
316(b) ............................. 5.3
316(c) ............................. 2.2
317(a) ............................. Inapplicable
317(b) ............................. Inapplicable
318(a) ............................. 2.1(b)
318(b) ............................. 2.1
318(c) ............................. 2.1(a)
- -------------------
1 This Cross-Reference Table does not constitute part of this Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions .......................................... 2
ARTICLE 2
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 Trustee ............................... 6
SECTION 2.4. Periodic Reports to 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 ............................. 6
SECTION 2.8. Conflicting Interests ................................ 7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.1. Powers and Duties of the Trustee ..................... 7
SECTION 3.2. Certain Rights of Trustee ............................ 9
ARTICLE 4
TRUSTEE
SECTION 4.1. Trustee; Eligibility ................................. 11
SECTION 4.2. Appointment, Removal and
Resignation of Trustee .......................... 12
ARTICLE 5
GUARANTEE
SECTION 5.1. Guarantee ............................................ 12
SECTION 5.2. Waiver of Notice and Demand .......................... 13
-i-
<PAGE>
Page
SECTION 5.3. Obligations Not Affected ............................. 13
SECTION 5.4. Rights of Holders .................................... 14
SECTION 5.5. Guarantee of Payment ................................. 14
SECTION 5.6. Subrogation .......................................... 14
SECTION 5.7. Independent Obligations .............................. 15
ARTICLE 6
SUBORDINATION
SECTION 6.1. Subordination ........................................ 15
SECTION 6.2. Pari Passu ......................................... 15
ARTICLE 7
TERMINATION
SECTION 7.1. Termination .......................................... 15
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Successors and Assigns ............................... 16
SECTION 8.2. Amendments ........................................... 16
SECTION 8.3. Notices .............................................. 16
SECTION 8.4. Benefit .............................................. 17
SECTION 8.5. Governing Law ........................................ 17
-ii-
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
October 21, 1996, is executed and delivered by Southwestern Public Service
Company, a New Mexico corporation (the "Guarantor"), and Wilmington Trust
Company, as trustee (the "Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
Southwestern Public Service Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to a Trust Agreement (the "Trust Agreement"),
dated as of June 5, 1996 among David M. Wilks, as Initial Depositor, the
Trustees of the Issuer named therein, Southwestern Public Service Company, as
Depositor, and the Holders from time to time of ownership interests in the
Issuer, the Issuer is issuing as of the date hereof $100,000,000 aggregate
liquidation amount of its 7.85% Trust Preferred Securities, Series A (the
"Preferred Securities") representing ownership interests in the Issuer and
having the terms set forth in the Trust Agreement.
WHEREAS, the Preferred Securities will be issued by the Issuer and
the proceeds thereof will be used, together with the Common Securities of the
Issuer, to purchase the Debentures (as defined in the Trust Agreement) of the
Guarantor and deposit the same with the Issuer as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, 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.
NOW, THEREFORE, in consideration of the payment for Preferred
Securities by each Holder thereof, which payment the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
<PAGE>
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ARTICLE 1.
DEFINITIONS
SECTION 1.1. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Common Securities" means the securities representing common
ownership interests in the assets of the Issuer.
"Corporate Trust Office" means the principal office of the Trustee
in Wilmington, Delaware, at which at any particular time its corporate
trust business shall be and which at the date of this Guarantee Agreement
is 1100 North Market Street, Wilmington, Delaware 19890.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer:
(i) any accrued and unpaid Distributions (as defined in the Trust
Agreement) that are required to be paid on such Preferred Securities, but
if and only to the extent that the Trustee of the Issuer has available in
the Payment Account funds sufficient to make such payment, (ii) the
redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price"), with respect to the Preferred
Securities called for redemption by the
<PAGE>
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Issuer, but if and only to the extent that the Trustee of the
Issuer has available in the Payment Account funds sufficient to make such
payment, and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with a redemption
of all of the Preferred Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, but if and only to the extent
that the Issuer has funds sufficient to make such payment, and (b) the
amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however,
that in determining whether the holders of the requisite percentage of
Preferred Securities have given any request, notice, consent or waiver
hereunder. "Holder" shall not include the Guarantor or any Affiliate of
the Guarantor.
"Indenture" means the Indenture dated as of Octo- ber 21, 1996, as
supplemented by the First Supplemental Indenture thereto dated as of
October 21, 1996, from the Guarantor (the "Debenture Issuer") to
Wilmington Trust Company, as trustee (the "Indenture Trustee"), as the
same may be supplemented or amended.
"Majority in Liquidation Amount of the Preferred Securities" means a
vote by Holder(s) of Preferred Securities, voting separately as a class,
of at least a majority in liquidation amount of all Preferred Securities;
provided, however, that Preferred Securities owned by the Guarantor or any
Affiliate thereof shall be disregarded for purposes of any such vote.
"Officers' Certificate" means a certificate signed by
the Chairman, the President, an Executive Vice President,
a Senior Vice President, a Vice President or the Treasurer
of the Guarantor and (ii) the Secretary or an Assistant
Secretary of the Guarantor, and delivered to the Trustee;
provided, however, that such certificate may be signed by
two of the officers or directors listed in clause (i)
above in lieu of being signed by one of such officers or
directors listed in such clause (i) and one of the
officers listed in clause (ii) above. Any Officers'
<PAGE>
-4-
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope
of the examination or investigation undertaken by
each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Corporate Trust
Department of the 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.
"Senior Indebtedness" means Senior Indebtedness as
defined in the Indenture.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act
of 1939, as amended.
<PAGE>
-5-
"Trustee" means Wilmington Trust Company until a Successor
Trustee has been appointed and has accepted such appointment pursuant to
the terms of this Guarantee Agreement, and thereafter means each such
Successor Trustee.
ARTICLE 2.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the
Trustee (a) semiannually, not later than February 15 and August 15 in each year,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (b) at such other
times as the Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished; provided that the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Trustee by the Guarantor. The Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
<PAGE>
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SECTION 2.3. Reports by the Trustee. Within 60 days after July 1 of
each year, the 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 Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Trustee. The Guarantor shall
provide to the Trustee, the Securities and Exchange Commission and the Holders
of the Preferred Securities such documents, reports and information (if any) as
may be required by Section 314 of the Trust Indenture Act, as well as the
compliance certificate required by such Section 314 in the form, in the manner
and at the times required by such Section 314.
SECTION 2.5. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Trustee such evidence of compliance with any
conditions precedent provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the 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 Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The 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 known to the
Trustee, unless such defaults have been cured before the giving of such notice,
provided that the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith
<PAGE>
-7-
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Trustee shall not be deemed to have knowledge of any Event
of Default unless the Trustee shall have received written notice, or a
Responsible Officer charged with the administration of the Trust Agreement shall
have obtained written notice, of such Event of Default.
SECTION 2.8. Conflicting Interests. The Trust Agreement shall be
deemed to be specifically described in this Guarantee Agreement for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE 3.
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.1. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for the
benefit of the Holders of the Preferred Securities, and the Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4 or to a
Successor Trustee on acceptance by such Successor Trustee of its appointment to
act as Successor Trustee. The right, title and interest of the Trustee shall
automatically vest in any Successor 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 Trustee.
(b) If an Event of Default has occurred and is continuing, the
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders of
the Preferred Securities.
(c) The Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Trustee shall
exercise such of the rights and powers vested in it by this Guarantee Agreement,
and use the same
<PAGE>
-8-
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the 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 Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Trustee,
the 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 Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a Majority in Liquidation Amount of the
Preferred Securities 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 Guarantee Agreement;
and
<PAGE>
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(iv) no provision of this Guarantee Agreement 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 the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 3.2. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.1:
(i) the Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Guarantee Agreement, the
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion; such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees; the Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction;
<PAGE>
-10-
(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall have provided to the
Trustee such adequate security and indemnity as would satisfy a reasonable
person in the position of the Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by the Trustee in complying with such request or direction,
including such reasonable advances as may be requested by the Trustee;
provided that, nothing contained in this Section 3.2(a)(v) shall be
interpreted so as to relieve the Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Trustee (i) may request instructions from the Holders 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 acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the 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 Trustee shall be
unqualified or incompetent in accordance with applicable law,
<PAGE>
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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 Trustee shall be
construed to be a duty.
(c) The Guarantor agrees to indemnify the Trustee for, and to hold
it harmless against, any and all loss, damage, claim, liability or expense,
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Guaranty Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee's right to indemnification hereunder shall survive the
termination of this Guaranty Agreement.
ARTICLE 4.
TRUSTEE
SECTION 4.1. Trustee; Eligibility.
(a) There shall at all times be a Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000 and has its Corporate Trust office in the continental United
States. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then, for the purposes of this Section 4.1(a)(ii), the combined
capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.1(a), the Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) 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
Guarantor shall in all
<PAGE>
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respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2. Appointment, Removal and Resignation of
Trustee.
(a) Subject to Section 4.2(b), the Trustee may be appointed or
removed without cause at any time by the Guarantor except following the
occurrence and during the continuation of an Event of Default.
(b) The Trustee shall not be removed until a Successor Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a
Successor Trustee shall have been appointed or until its removal or
registration. The Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Trustee and delivered to the
Guarantor and the resigning Trustee.
(d) If no Successor 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 Trustee may petition
any court of competent jurisdiction for appointment of a Successor Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trustee.
ARTICLE 5.
GUARANTEE
SECTION 5.1. Guarantee. The Guarantor irrevocably agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert, other than
the defense of payment. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment
<PAGE>
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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 Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of
<PAGE>
-14-
the debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in,
the Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor other
than the defense of payment, it being the intent of this Section 5.3 that
the obligations of the Guarantor hereunder -- to the limited extent set
forth herein -- 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. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Trustee to be held
for the benefit of the Holders of the Preferred Securities; (ii) the Trustee has
the right to enforce this Guarantee Agreement on behalf of the Holders of the
Preferred Securities; (iii) the Holders of a Majority in Liquidation Amount of
the Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee in respect of
this Guarantee Agreement or exercising any trust or power conferred upon the
Trustee under this Guarantee Agreement; and (iv) any Holder of the Preferred
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Issuer or any other person or entity.
SECTION 5.5. Guarantee of Payment. This Guarantee Agreement creates
a guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication).
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 the Holders by the Guarantor under this Guarantee
Agreement; provided, however, that the Guarantor shall not (except to the
<PAGE>
-15-
extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any amounts of
Guarantee Payments are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. Independent Obligations. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE 6.
SUBORDINATION
SECTION 6.1. Subordination. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Indebtedness of the Guarantor. This Guarantee
Agreement will be pari passu with the Debentures.
SECTION 6.2. Pari Passu. This Guarantee Agreement shall rank pari
passu with any similar Guarantee Agreements issued by the Guarantor on behalf of
the Holders of Preferred Securities issued by any other issuer holding
debentures issued under the Indenture.
ARTICLE 7.
TERMINATION
SECTION 7.1. Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon: (i) full payment of the Redemption
Price of all Preferred Securities, (ii) the distribution of Debentures to
Holders of Preferred Securities in exchange for all of the Preferred Securities
or (iii) upon full payment of the amounts payable in
<PAGE>
-16-
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Preferred Securities
or under this Guarantee Agreement.
ARTICLE 8.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Eight of the Indenture, the Guarantor shall not assign
its obligations hereunder.
SECTION 8.2. Amendments. Except with respect to any changes which do
not adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of Holders shall apply to the giving of such approval.
SECTION 8.3. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders of
the Preferred Securities:
Southwestern Public Service Company
Tyler at Sixth
Amarillo, Texas 79101
Attention: Secretary
(b) if given to the Issuer, in care of the Trustee, at the Issuer's
(and the Trustee's) address set forth below or such other address as the
Trustee on behalf of
<PAGE>
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the Issuer may give notice to the Holders of the Preferred Securities:
Southwestern Public Service Capital I
c/o Southwestern Public Service Company
Tyler at Sixth
Amarillo, Texas 79101
Attention: Secretary
with copy to:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration;
(c) if given to any Holder of Preferred Securities,
at the address set forth on the books and records of the
Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
SECTION 8.5. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
SOUTHWESTERN PUBLIC SERVICE COMPANY,
as Guarantor
By: /s/ Bill D. Helton
------------------------------
Name: Bill D. Helton
Title: Chairman of the Board
WILMINGTON TRUST COMPANY, as Trustee
By: /s/ Donald G. MacKelcan
---------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
AMENDED AND RESTATED
TRUST AGREEMENT
among
DAVID M. WILKS, as Initial Depositor,
and
SOUTHWESTERN PUBLIC SERVICE COMPANY, as Depositor,
and
WILMINGTON TRUST COMPANY, as Property Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of October 21, 1996
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
<PAGE>
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Amended and Restated
Trust Indenture Trust Agreement
Act Section Section
ss.310(a)(1)................................................. 8.07
(a)(2) ................................................. 8.07
(a)(3) ................................................. 8.09
(a)(4) ................................................. Not Applicable
(a)(5).................................................. 8.08
(b) .................................................... 8.08
(c)..................................................... Not Applicable
ss. 311(a) ................................................... 8.13
(b) .................................................... 8.13
ss. 312(a) ................................................... 5.07
(b)..................................................... 5.07
(c)..................................................... 5.07
ss. 313 ...................................................... 8.14
ss. 314(a) ................................................... 8.15
(b) .................................................... Not Applicable
(c)(1) ................................................. 8.16
(c)(2) ................................................. 8.16
(c)(3) ................................................. 8.16
(d) .................................................... Not Applicable
(e) .................................................... 8.16
ss. 315(a) ................................................... 8.01
(b) .................................................... 8.02, 8.14(b)
(c) .................................................... 8.01(c)
(d) .................................................... 8.01, 8.03
(e) .................................................... 8.03
ss. 316(a) ................................................... 6.04
(b) .................................................... 5.12
(c) .................................................... 6.07
ss. 317(a)(1)................................................ 8.03
(a)(2) ................................................. 8.03
(b) .................................................... 5.08
ss. 318(a) .................................................. 10.11
(b)..................................................... 10.11
(c)..................................................... 10.11
- --------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
Section 1.01. Definitions................................................... 1
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.01. Name.......................................................... 9
Section 2.02. Office of the Property Trustee; Principal Place of Business... 9
Section 2.03. Initial Contribution of Trust Property; Assignment of
Initial Depositor's Rights and Duties; Organizational
Expenses; Expense Agreement................................ 9
Section 2.04. Issuance of the Preferred Securities.......................... 9
Section 2.05. Subscription and Purchase of Debentures; Issuance of
the Common Securities......................................10
Section 2.06. Declaration of Trust..........................................10
Section 2.07. Authorization to Enter into Certain Transactions..............10
Section 2.08. Assets of the Trust...........................................13
Section 2.09. Title to Trust Property.......................................13
ARTICLE III
PAYMENT ACCOUNT
Section 3.01. Payment Account...............................................13
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS
Section 4.01. Distributions.................................................14
Section 4.02. Redemptions...................................................14
Section 4.03. Subordination of Common Securities............................16
Section 4.04. Payment Procedures............................................17
Section 4.05. Tax Returns and Reports.......................................17
Section 4.06. Payment of Taxes, Duties, Etc. of the Trust...................17
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.01. Initial Ownership.............................................18
Section 5.02. The Trust Securities Certificates.............................18
Section 5.03. Delivery of Trust Securities Certificates.....................18
Section 5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates....................................18
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<PAGE>
TABLE OF CONTENTS (CONT.)
Page
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates....................................19
Section 5.06. Persons Deemed Securityholders................................19
Section 5.07. Access to List of Securityholders' Names and Addresses........19
Section 5.08. Appointment of Paying Agent...................................20
Section 5.09. Book-Entry Preferred Securities Certificates;
Common Securities Certificate..............................20
Section 5.10 Notices to Clearing Agency....................................21
Section 5.11. Definitive Preferred Securities Certificates..................21
Section 5.12. Rights of Securityholders.....................................22
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01. Limitations on Voting Rights..................................22
Section 6.02. Notice of Meetings............................................23
Section 6.03. Meetings of Trust Securityholders.............................23
Section 6.04. Voting Rights.................................................24
Section 6.05. Proxies, Etc..................................................24
Section 6.06. Securityholder Action by Written Consent......................24
Section 6.07. Record Date for Voting and Other Purposes.....................24
Section 6.08. Acts of Securityholders.......................................24
Section 6.09. Inspection of Records.........................................25
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BANK
Section 7.01. Representations and Warranties................................26
ARTICLE VIII
THE TRUSTEES
Section 8.01. Certain Duties and Responsibilities...........................27
Section 8.02. Notice of Defaults............................................28
Section 8.03. Certain Rights of the Property Trustee........................28
Section 8.04. Not Responsible for Recitals or Issuance of Securities........30
Section 8.05. May Hold Securities...........................................30
Section 8.06. Compensation; Fees; Indemnity.................................31
Section 8.07. Corporate Property Trustee Required; Eligibility of Trustees..31
Section 8.08. Conflicting Interests.........................................31
Section 8.09. Co-Trustees and Separate Trustees.............................32
Section 8.10. Resignation and Removal; Appointment of Successor.............33
Section 8.11. Acceptance of Appointment by Successor........................34
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<PAGE>
TABLE OF CONTENTS (CONT.)
Page
Section 8.12. Merger, Conversion, Consolidation or Succession to
Business...................................................35
Section 8.13. Preferential Collection of Claims Against Depositor
or Trust...................................................35
Section 8.14. Reports by the Property Trustee...............................35
Section 8.15. Reports to the Property Trustee...............................36
Section 8.16. Evidence of Compliance with Conditions Precedent..............36
Section 8.17. Number of Trustees............................................36
Section 8.18. Delegation of Power...........................................36
ARTICLE IX
TERMINATION AND LIQUIDATION
Section 9.01. Termination upon Expiration Date..............................37
Section 9.02. Early Termination.............................................37
Section 9.03. Termination...................................................37
Section 9.04. Liquidation...................................................37
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Limitation on Rights of Securityholders.......................39
Section 10.02. Amendment.....................................................39
Section 10.03. Separability..................................................40
Section 10.04. Tax Elections.................................................40
Section 10.05. GOVERNING LAW.................................................40
Section 10.06. Successors....................................................40
Section 10.07. Headings......................................................41
Section 10.08. Intention of Parties..........................................41
Section 10.09. Notice and Demand.............................................41
Section 10.10. Agreement Not to Petition.....................................41
Section 10.11. Trust Indenture Act; Conflict with Trust Indenture Act........42
--------------------
Exhibit A Certificate of Trust
Exhibit B Form of Letter of Representations
Exhibit C The Depository Trust Company:
Principal and Income Payments Rider
Exhibit D Representations for Deposit/Withdrawal at Custodian
Exhibit E Form of Common Securities Certificate
Exhibit F Form of Agreement as to Expenses and Liabilities
Exhibit G Form of Preferred Securities Certificate
-iii-
<PAGE>
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
AMENDED AND RESTATED TRUST AGREEMENT, dated as of October 21, 1996,
among (i) David M. Wilks, President and Chief Operating Officer of Southwestern
Public Service Company (the "Initial Depositor"), (ii) Southwestern Public
Service Company, a New Mexico corporation (the "Depositor" or "SPS"), (iii)
Wilmington Trust Company, a banking corporation duly organized and existing
under the laws of the State of Delaware, as trustee (the "Property Trustee" and,
in its separate corporate capacity and not in its capacity as Property Trustee,
the "Bank"), (iv) David M. Wilks, an individual, Robert D. Dickerson, an
individual, and James D. Steinhilper, an individual, each of whose address is
c/o SPS, Tyler at Sixth, Amarillo, Texas 79101 (each an "Administrative Trustee"
and referred to collectively as the "Administrative Trustees") (the Property
Trustee and the Administrative Trustees being referred to collectively as the
"Trustees"), and (v) the several Holders (as defined herein).
W I T N E S S E T H:
WHEREAS, the Initial Depositor and the Property Trustee have
heretofore duly declared and established Southwestern Public Service Capital I
(the "Trust") as a business trust pursuant to the Delaware Business Trust Act by
the entering into of that certain Trust Agreement dated as of June 5, 1996 (the
"Original Trust Agreement"), and by the execution and filing on June 5, 1996 by
the Property Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust attached hereto as Exhibit A; and
WHEREAS, the Initial Depositor, the Property Trustee and SPS desire
to amend and restate the Original Trust Agreement in its entirety as set forth
herein to provide for, among other things, (i) the resignation of the Initial
Depositor and the assumption by SPS of all of his rights, interests, duties and
obligations, (ii) the acquisition by the Trust from SPS of all of the right,
title and interest in the Debentures (as defined herein), (iii) the issuance of
the Common Securities (as defined herein) by the Trust to SPS, (iv) the issuance
and sale of the Preferred Securities (as defined herein) by the Trust pursuant
to the Underwriting Agreement (as defined herein) and (v) the appointment of the
Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties hereto, including the Holders, and intending to be legally bound,
hereby amends and restates the Original Trust Agreement in its entirety and
agrees as follows:
<PAGE>
ARTICLE I
DEFINED TERMS
Section 1.01. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means the amount of Additional Interest
Attributable to Deferral (as defined in the Subordinated Indenture) paid by the
Depositor on a Like Amount of Debentures for such period.
"Administrative Trustee" means each of the individuals identified as
an "Administrative Trustee" in the preamble to this Trust Agreement solely in
his capacity as Administrative Trustee of the Trust heretofore formed and
continued hereunder, and not in his individual capacity; or such Administrative
Trustee's successor in interest in such capacity, or any successor
administrative trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
-2-
<PAGE>
"Bankruptcy Event" means, with respect to any Person:
(i) a decree or order is entered by a court having
jurisdiction in the premises (a) for relief in respect of such Person
in an involuntary case or proceeding under the Federal Bankruptcy Code
or any other Federal or state bankruptcy, insolvency, reorganization or
similar law or (b) adjudging such Person a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in
respect of such Person under the Federal Bankruptcy Code or any other
applicable Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of such Person or of any substantial part of any of its properties, or
ordering the winding up or liquidation of any of its affairs, and any
such decree or order remains unstayed and in effect for a period of 60
consecutive days; or
(ii) such Person institutes a voluntary case or proceeding
under the Federal Bankruptcy Code or any other applicable Federal or
state law or any other case or proceeding to be adjudicated a bankrupt
or insolvent, or such Person consents to the entry of a decree or order
for relief in respect of such Person in any involuntary case or
proceeding under the Federal Bankruptcy Code or any other applicable
Federal or state law or to the institution of bankruptcy or insolvency
proceedings against such Person, or such Person files a petition or
answer or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable Federal or state law, or
consents to the filing of any such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of any such Person or
of any substantial part of its property, or makes an assignment for the
benefit of creditors, or admits in writing its inability to pay its
debts generally as they become due or takes corporate action in
furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.10.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof and
delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.09.
-3-
<PAGE>
"Business Day" means a day other than (x) a Saturday or a Sunday,
(y) a day on which banks in New York, New York are authorized or obligated by
law or executive order to remain closed or (z) a day on which the Property
Trustee's corporate trust office or SPS's principal office is closed for
business.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Time of Delivery" as defined in the
Underwriting Agreement, which date is also the date of execution and delivery of
this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means a beneficial interest in the Trust, having a
Liquidation Amount of $25 and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached hereto as
Exhibit E.
"Corporate Trust Office" means the principal office of the Property
Trustee located in Wilmington, Delaware.
"Debenture Event of Default" means an "Event of Default" as defined
in the Subordinated Indenture.
"Debenture Redemption Date" means "Redemption Date" as defined in
the Subordinated Indenture.
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<PAGE>
"Debenture Trustee" means Wilmington Trust Company, a banking
corporation duly organized and existing under the laws of the State of Delaware.
"Debentures" means the $103,092,775 aggregate principal amount of
SPS 7.85% Deferrable Interest Subordinated Debentures, Series A Due 2036, issued
pursuant to the Subordinated Indenture.
"Definitive Preferred Securities Certificates" means either or both
(as the context requires) of (i) Preferred Securities Certificates issued in
typewritten, fully registered form as provided in Section 5.09(a) and (ii)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.11.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss.ss. 3801, et seq., as it may be amended from time
to time.
"Depositor" means SPS, as specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Event of Default" means the occurrence of a Debenture Event of
Default (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body).
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between SPS and the Trust, substantially in the form attached as
Exhibit F, as amended from time to time.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.
"Final Distribution" has the meaning set forth in Section 9.04.
"Final Distribution Date" means the Date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a dissolution
and liquidation of the Trust pursuant to Section 9.04(a).
"Global Certificate" shall mean the Preferred Securities Certificate
or Certificates issued as specified in Section 5.09.
-5-
<PAGE>
"Guarantee" means the Guarantee Agreement executed and delivered by
SPS and Wilmington Trust Company, a Delaware banking corporation, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, as
amended from time to time.
"Holder" or "Securityholder" means a Person in whose name a Trust
Security or Securities are registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
"Investment Company Event" means the occurrence of a change in law
or regulation or a change in the interpretation or application of any law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended, which Change in 1940 Act Law
becomes effective after October 16, 1996.
"Letter of Representations" means the agreement among the Trust, the
Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Certificates, substantially
in the form attached hereto as Exhibit B, as the same may be amended and
supplemented from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed
of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having an aggregate
Liquidation Amount equal to the principal amount of Debentures to be
contemporaneously redeemed in accordance with the Subordinated Indenture and the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities, or (ii) Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Trust Securities of the Holder to whom such Debentures
are distributed, as the case may be.
"Liquidating Trustee" means a Person appointed pursuant to Section
9.04(b), solely in its capacity as Liquidating Trustee of the Trust heretofore
formed and continued hereunder and not in its individual capacity.
"Liquidation Amount" means the stated amount of U.S. $25 per Trust
Security.
"Liquidation Distribution" has the meaning specified in Section
9.04(e).
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"Officers' Certificate" means a certificate signed by (i) the
Chairman, the President, an Executive Vice President, a Senior Vice President, a
Vice President, or the Treasurer of the Depositor and (ii) the Secretary or an
Assistant Secretary of the Depositor, and delivered to the appropriate Trustee;
provided, however, that such certificate may be signed by two of the officers
listed in clause (i) above in lieu of being signed by one of such officers
listed in such clause (i) and one of the officers listed in clause (ii) above.
One of the officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition
and the definitions relating thereto;
(b) a brief statement of the nature and scope of
the examination or investigation undertaken by each
officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as
of the date of determination, all Trust Securities theretofore authenticated and
delivered under this Trust Agreement, except:
(i) Trust Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative
Trustees for cancellation;
(ii) Trust Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited
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with the Property Trustee or any Paying Agent for the Holders of such
Preferred Securities; provided that, if such Trust Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and
(iii) Trust Securities which have been paid pursuant to
Section 4.04 or in exchange for or in lieu of which other Trust
Securities have been authenticated and delivered pursuant to this Trust
Agreement;
provided, however, that in determining whether the Holders of the requisite
aggregate Liquidation Amount of the Outstanding Trust Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Trust Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Trust Securities which such Trustee has actual knowledge of such
ownership shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate. Trust
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Administrative
Trustees the pledgee's right so to act with respect to such Trust Securities and
that the pledgee is not the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee.
"Owner" means each Person who is the beneficial owner of a
Book-Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.08 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Section 4.04.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
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"Preferred Security" means a beneficial interest in the Trust,
having a Liquidation Amount of $25 and having the rights provided therefor in
this Trust Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
G.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement,
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date shall be a Redemption
Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such Trust Security,
plus accumulated and unpaid Distributions to such date.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Securities Register" and "Securities Registrar" shall be as
described in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities are registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
"Special Event" means either a Tax Event or an Investment Company
Event.
"Subordinated Indenture" means the Indenture, dated as of October
21, 1996, between SPS and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
"Supplemental Indenture" means the Supplemental Indenture to the
Indenture establishing the Debentures.
"Tax Event" means the receipt by the Trust or the Depositor, as the
case may be, of an Opinion of Counsel experienced in such matters to the effect
that a relevant tax law change has
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occurred after October 16, 1996. For purposes of the preceding sentence a
relevant tax law change is any amendment or change to (or officially proposed
amendment or change to) the laws (including regulations thereunder) of the
United States or any political subdivision or taxing authority thereof, or the
publication of any judicial opinion interpreting such laws (or regulations) or
any written interpretation of such laws (or regulations) by any governmental
authority having jurisdiction to enforce or administer such laws (or
regulations) (including official and unofficial opinions purporting to apply
such laws and regulations to other Persons who have issued securities similar to
the Debentures), which amendment, change, proposed amendment or change, opinion
or interpretation could, if valid and enacted or applied to the Trust or the
Depositor, result in (i) the Trust, either currently or within 90 days of the
date thereof, becoming subject to United States Federal income tax with respect
to interest received on the Debentures, (ii) interest payable by the Depositor
on the Debentures attributable to the Preferred Securities, either currently or
within 90 days of the date thereof, becoming nondeductible for United States
Federal income tax purposes or (iii) the Trust, either currently or within 90
days of the date thereof, becoming subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Trust" means the Delaware business trust created and continued
hereby and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Trust Agreement, as the same may be
modified, amended or supplemented in accordance with the applicable provisions
hereof, including all exhibits hereto, including, for all purposes of this Trust
Agreement and any such modification, amendment or supplement, the provisions of
the Trust Indenture Act that are "automatically" deemed to be a part of and
govern this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Trust Agreement was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
in, or owing to, the Payment Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the trusts of this
Trust Agreement.
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"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated
October 16, 1996, among the Trust, SPS and the several underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.01. Name. The Trust created and continued hereby shall be
known as "Southwestern Public Service Capital I," as such name may be modified
from time to time by the Administrative Trustees following written notice to the
Holders and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.02. Office of the Property Trustee; Principal Place of
Business. The office of the Property Trustee in the State of Delaware is
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration, or such
other address in Delaware as the Property Trustee may designate by written
notice to the Securityholders and the Depositor. The principal place of business
of the Trust is c/o SPS, Tyler at Sixth, Amarillo, Texas 79101; Attention:
Secretary.
Section 2.03. Initial Contribution of Trust Property; Assignment of
Initial Depositor's Rights and Duties; Organizational Expenses; Expense
Agreement. (a) The Property Trustee acknowledges receipt, in trust from the
Initial Depositor in connection with the Original Trust Agreement, of the sum of
$10, which constituted the initial Trust Property. (b) The Initial Depositor
hereby assigns, and the Depositor hereby assumes, all rights, title and
interests and all duties and obligations of the Initial Depositor under the
Original Trust Agreement. (c) The Depositor shall pay the organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses. (d) The Depositor agrees to execute and deliver the Expense Agreement
pursuant to which the Depositor shall pay certain indebtedness, expenses or
liabilities of the Trust.
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Section 2.04. Issuance of the Preferred Securities. On October 16,
1996, the Initial Depositor, on behalf of the Trust, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall
execute and deliver to the underwriters named therein Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of 4,000,000 Preferred Securities having an
aggregate Liquidation Amount of $100,000,000 against receipt of the aggregate
purchase price of such Preferred Securities of $100,000,000. The consideration
received by the Trust for the issuance of the Preferred Securities shall
constitute a contribution to the capital of the Trust and shall not constitute a
loan to the Trust.
Section 2.05. Subscription and Purchase of Debentures; Issuance of
the Common Securities. Contemporaneously with the execution and delivery of this
Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall
subscribe to and purchase from the Depositor Debentures, registered in the name
of the Trust and having an aggregate principal amount equal to $103,092,775,
and, in satisfaction of the purchase price for such Debentures, (x) the
Administrative Trustee, on behalf of the Trust, shall deliver to the Depositor
the sum of $100,000,000, and (y) contemporaneously therewith the Administrative
Trustees, on behalf of the Trust, shall execute and deliver to the Depositor
Common Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of 123,711 Common Securities having an aggregate Liquidation
Amount of $3,092,775. The consideration received by the Trust for the issuance
of the Common Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
Section 2.06. Declaration of Trust. The exclusive purposes of the
Trust are (a) to issue Trust Securities, (b) to purchase the Debentures with the
Common Securities and the proceeds from the sale of the Preferred Securities,
and (c) to engage in those activities necessary or incidental thereto. The
Depositor hereby appoints the Trustees as trustees of the Trust, to have all the
rights, powers and duties to the extent set forth herein, and the Trustees
hereby accept such appointment. The Property Trustee hereby declares that it
will hold the Trust Property in trust upon and subject to the conditions set
forth herein for the benefit of the Securityholders. The Administrative Trustees
shall have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Trust.
Section 2.07. Authorization to Enter into Certain Transactions. (a)
The Trustees shall conduct the affairs of the Trust in accordance with the terms
of this Trust Agreement. Subject to the limitations set forth in paragraph (b)
of this
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Section, and in accordance with the following provisions (A) and (B), the
Trustees shall have the authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(A) As among the Trustees, the Administrative Trustees shall
have the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(i) the issuance and sale of the Trust
Securities;
(ii) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the
Expense Agreement and the Letter of Representations and such
other agreements as may be necessary or desirable in
connection with the purposes and function of the Trust;
(iii) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and
under state securities or blue sky laws, and the qualification
of this Trust Agreement as a trust indenture under the Trust
Indenture Act;
(iv) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges as shall
be determined by the Depositor and the registration of the
Preferred Securities under the Securities Exchange Act of
1934, as amended, and the preparation and filing of all
periodic and other reports and other documents pursuant to the
foregoing;
(v) the sending of notices (other than notices of
default) and other information regarding the Trust Securities
and the Debentures to the Securityholders in accordance with
this Trust Agreement;
(vi) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(vii) registering transfers of the Trust
Securities in accordance with this Trust Agreement;
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(viii) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation of
the Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware;
(ix) unless otherwise determined by the Depositor,
the Property Trustee or the Administrative Trustees, or as
otherwise required by the Delaware Business Trust Act or the
Trust Indenture Act, to execute on behalf of the Trust (either
acting alone or together with any or all of the Administrative
Trustees) any documents that the Administrative Trustees have
the power to execute pursuant to this Trust Agreement; and
(x) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any
such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to
the following matters:
(i) the establishment and maintenance of the
Payment Account;
(ii) the receipt of the Debentures;
(iii) the collection of interest, principal
and any other payments made in respect of the
Debentures into the Payment Account;
(iv) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities;
(v) the sending of notices of default and other
information regarding the Trust Securities and the Debentures
to the Securityholders in accordance with this Trust
Agreement;
(vi) the distribution of the Trust Property
in accordance with the terms of this Trust
Agreement;
(vii) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
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liquidation of the Trust and the preparation,
execution and filing of the certificate of
cancellation with the Secretary of State of the
State of Delaware;
(viii) after the occurrence of an Event of Default,
the taking of any action incidental to the foregoing as the
Property Trustee may from time to time determine is necessary
or advisable to protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of
the effect of any such action on any particular
Securityholder); and
(ix) subject to this Section 2.07(a)(B), the Property
Trustee shall have none of the duties of the Administrative
Trustees set forth in Section 2.07(a)(A).
(b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not (i) acquire any
investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to be treated as an association taxable as a corporation for United States
Federal income tax purposes, (iv) incur any indebtedness for borrowed money or
(v) take or consent to any action that would result in the placement of a Lien
on any of the Trust Property. The Administrative Trustees shall defend all
claims and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the Securityholders in
their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Initial Depositor or the Depositor in furtherance of the
following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) to prepare for filing with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, the Debentures and the Guarantee, including any amendments
thereto;
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(ii) 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 or on behalf of the Trust, and advise
the Trustees of actions they must take on behalf of the Trust, and
prepare for execution and filing any documents to be executed and filed
by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of
any such States;
(iii) to prepare for filing by the Trust an
application to the New York Stock Exchange for listing upon notice of
issuance of the Preferred Securities;
(iv) 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
Securities Exchange Act of 1934, as amended, including any amendments
thereto;
(v) to negotiate the terms of, and execute and
deliver, the Underwriting Agreement providing for the sale of
the Preferred Securities; and
(vi) any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or taxed as a corporation for United States Federal income
tax purposes and so that the Debentures will be treated as indebtedness of the
Depositor for United States Federal income tax purposes. In so doing, the
Depositor and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that the Depositor or any of the Administrative Trustees determines
in its or his discretion to be necessary or desirable for such purposes,
provided that such action does not adversely affect the interests of the Holders
of the Preferred Securities. Any action not specifically assigned herein that
the Trustees may be permitted or required to do under this Trust Agreement may
be taken by majority vote of the Trustees.
Section 2.08. Assets of the Trust. The assets of the Trust shall
consist of the Trust Property.
Section 2.09. Title to Trust Property. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and
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administered by the Property Trustee for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 3.01. Payment Account. (a) On or prior to the Closing Date,
the Property Trustee shall establish the Payment Account. The Property Trustee
and any agent of the Property Trustee shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in accordance with
this Trust Agreement. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS
Section 4.01. Distributions. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accrue from October 21, 1996, and, except in the event that SPS exercises
its right to extend the interest payment period for the Debentures pursuant to
Section 101 of the Supplemental Indenture, shall be payable quarterly in arrears
on March 1, June 1, September 1 and December 1 of each year, commencing on
December 1, 1996. If any date on which Distributions are otherwise payable on
the Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day 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, payment of
such distribution shall be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date (each date on
which distributions are payable in accordance with this Section 4.01(a), a
"Distribution Date").
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(b) The Trust Securities represent beneficial interests in the
Trust, and, subject to Section 4.03 hereof, all Distributions will be made pro
rata on each of the Trust Securities; distributions payable as a preference on
the Preferred Securities shall be fixed at a rate of 7.85% per annum of the
Liquidation Amount of the Preferred Securities. The amount of Distributions
payable for any full quarterly period shall be computed on the basis of a
360-day year of twelve 30-day months and, for any period shorter than a full
monthly period, shall be computed on the basis of the actual number of days
elapsed in such period. If the interest payment period for the Debentures is
extended pursuant to Section 101 of the Supplemental Indenture, then the rate
per annum at which Distributions on the Trust Securities accumulate shall be
increased by an amount such that the aggregate amount of Distributions that
accumulate on all Trust Securities during any such extended interest payment
period is equal to the aggregate amount of interest (including interest payable
on unpaid interest at the percentage rate per annum set forth above, compounded
quarterly) that accrues during any such extended interest payment period on the
Debentures. The amount of Distributions payable for any period shall include the
Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and
shall be deemed payable on each Distribution Date only to the extent that the
Trust has funds legally and immediately available in the Payment Account for the
payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
Section 4.02. Redemptions. (a) On each Debenture Redemption Date,
the Trust will be required to redeem a Like Amount of Trust Securities at the
Redemption Price.
(b) If (i) (x) a Special Event shall occur and be continuing
and (y) within 45 days following the occurrence of such Special Event the
Trustees shall not have received from the Debenture Trustee a notice of
redemption of all of the Debentures on a Debenture Redemption Date (as specified
in such notice) which is to occur not later than 90 days following the
occurrence of such Special Event, or (ii) if the Trust is not or will not be
taxed as a grantor trust, but a Tax Event has not occurred, the Depositor may in
its sole discretion direct the Trustees to, and the Trustees shall if so
directed by the Depositor, dissolve the Trust and cause the Trust to distribute
to each Holder of Trust Securities, in
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accordance with Section 9.04 and on a Liquidation Date which shall occur not
later than 90 days following the occurrence of such Special Event, a Like Amount
of Debentures in liquidation of the Trust; provided, however, that the Trustees
shall be required to follow the direction of the Depositor to dissolve the Trust
and distribute the Debentures to Holders of Trust Securities in accordance with
this Section 4.02(b) and Section 9.04 only if the Trust shall have received an
Opinion of Counsel experienced in such matters to the effect that the Holders of
Preferred Securities will not recognize any gain or loss for United States
Federal income tax purposes as a result of such distribution. The election of
the Depositor to cause the Trust to be dissolved shall be evidenced by a Board
Resolution. If the Trust is not dissolved pursuant to the preceding sentence and
the Trust Securities remain Outstanding, then Additional Interest Attributable
to Taxes (as defined in the Subordinated Indenture) will be payable on the
Debentures.
(c) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more
than 90 days prior to the Redemption Date to each Holder of Trust Securities to
be redeemed, at such Holder's address appearing in the Securities Register. All
notices of redemption shall identify the Trust Securities to be redeemed
(including CUSIP number) and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place of payment where such Trust
Securities are to be surrendered for payment of the
Redemption Price; and
(iv) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that, if the monies required to effect such redemption have been duly
deposited by SPS with the Property Trustee, interest thereon will cease
to accrue on and after said date.
(d) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Debentures. Redemptions of the Trust Securities
shall be made and the Redemption Price shall be deemed payable on each
Redemption Date only to the extent that the Trust has funds immediately
available in the Payment Account for the payment of such Redemption Price.
(e) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York time, on the
Redemption Date, subject to Section 4.02(d), the Property Trustee shall, so long
as the Preferred Securities are in
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book-entry-only form, irrevocably deposit with the Clearing Agency for the
Preferred Securities funds sufficient to pay the applicable Redemption Price
and, at the direction of the Depositor, shall give such Clearing Agency
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof; provided if the Property Trustee does not do so, it will be
regarded as having revoked the notice of redemption. If the Preferred Securities
are no longer in book-entry-only form, the Property Trustee, subject to Section
4.02(d), shall irrevocably deposit with the Paying Agent funds sufficient to pay
the applicable Redemption Price and shall give the Paying Agent irrevocable
instructions to pay the Redemption Price to the Holders thereof upon surrender
of their Preferred Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such Trust
Securities as they appear on the Securities Register on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the Redemption
Price, but without interest on such Redemption Price, and such Securities will
cease to be outstanding. In the event that any date on which any Redemption
Price is payable is not a Business Day, then payment of the Redemption Price
payable on such date shall 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, payment of such Distribution shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is not paid either by the Trust or by the
Depositor pursuant to the Guarantee, such Trust Securities shall be considered
to remain outstanding and will continue to accrue, at the rate specified above,
from the Redemption Date originally established by the Trust for such Trust
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
(f) Payment of the Redemption Price on the Trust Securities
shall be made to the Owners thereof as they appear on the Securities Register on
the relevant record date, which shall be one Business Day prior to the relevant
Redemption Date; provided, however, that in the event that the Preferred
Securities do not remain in book-entry-only form, the relevant record date shall
be the fifteenth day prior to the Redemption Date.
(g) If less than all the Outstanding Trust Securities are to
be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be
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allocated to the Common Securities and the Preferred Securities on a pro rata
basis based upon their respective aggregate Liquidation Amounts. The particular
Preferred Securities to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Property Trustee from the Outstanding
Preferred Securities not previously called for redemption, by such method as the
Property Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $25 or any integral multiple
thereof) of the aggregate Liquidation Amount of Preferred Securities of a
denomination larger than $25. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Preferred Securities which has been or is
to be redeemed.
Section 4.03. Subordination of Common Securities. (a) Payment of
Distributions (including Additional Amounts, if applicable) on, and the
Redemption Price of, the Trust Securities, as applicable, shall be made pro rata
based on the aggregate Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture Event
of Default shall have occurred and be continuing, no payment of any Distribution
(including Additional Amounts, if applicable) on, or Redemption Price of, any
Common Security, and no other payment on account of the redemption, liquidation
or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions (including Additional
Amounts, if applicable) payable as a preference on all Outstanding Preferred
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities called for redemption, shall have
been made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Debenture Event of
Default, the Holder of Common Securities will be deemed to have waived any right
to act with respect to any Event of Default until the effect of all such Events
of Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under this Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act in accordance with Article
VIII hereof and solely on behalf of
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the Holders of the Preferred Securities and not the Holder of the Common
Securities. In such event, only the Holders of the Preferred Securities will
have the right to direct the Property Trustee to act on their behalf.
Section 4.04. Payment Procedures. Payments in respect of the
Preferred Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities Register or, if
the Preferred Securities are held by a Clearing Agency, payments shall be made
by wire transfer to the Clearing Agency, which shall credit the relevant
Persons' accounts at such Clearing Agency on the applicable Distribution Dates.
Payments in respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Property Trustee and the Common
Securityholder.
Section 4.05. Tax Returns and Reports. The Administrative Trustees
shall prepare (or cause to be prepared), at the Depositor's expense, and file
all United States Federal, state and local tax and information returns
(including, without limitation, Form 8281 which must be filed by an issuer of an
original issue discount security) and reports required to be filed by or in
respect of the Trust. In this regard, the Administrative Trustees shall prepare
and file (or cause to be prepared or filed) the Internal Revenue Service forms
required to be filed in respect of the Trust in each taxable year of the Trust.
The Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns, reports and schedules promptly after such
filing or furnishing. The Trustees shall comply with United States Federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
Section 4.06. Payment of Taxes, Duties, Etc. of the Trust. Upon
receipt under the Debentures of Additional Interest Attributable to Taxes (as
defined in the Subordinated Indenture), the Property Trustee shall distribute to
the Administrative Trustees an amount requested by them and they shall promptly
pay any taxes, duties, assessments or governmental charges of whatsoever nature
(other than withholding taxes) imposed on the Trust by the United States or any
other taxing authority.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.01. Initial Ownership. Upon the formation of the Trust and
the contribution by the Initial Depositor pursuant to Section 2.03 and until the
issuance of the Trust Securities, and at any time during which no Trust
Securities are outstanding, the Initial Depositor shall be the sole beneficial
owner of the Trust.
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Section 5.02. The Trust Securities Certificates. Initial Holders
shall purchase Preferred Securities in minimum denominations of $25 (based on
Liquidation Amount) and integral multiples of $25 in excess thereof, and the
Common Securities Certificates shall be issued in denominations of $25 (based on
Liquidation Amount) and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by the facsimile or manual
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
Section 5.03. Delivery of Trust Securities Certificates. On the
Closing Date, the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust and delivered to or upon the
written order of the Depositor signed by its chairman of the board, its
president, any executive vice president, any senior vice president, any vice
president, the treasurer or secretary without further corporate action by the
Depositor, in authorized denominations.
Section 5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates. The Securities Registrar shall keep or cause to be kept
a Securities Register in which, subject to such reasonable regulations as it may
prescribe, the Securities Registrar shall provide for the registration of Trust
Securities Certificates and registration of transfers and exchanges of Trust
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar. The provisions of Sections 8.01, 8.03 and 8.06 shall apply
to the Bank in its role as Securities Registrar.
Upon surrender for the registration of the transfer of any Trust
Securities Certificate, the Administrative Trustees or any one of them shall
execute and deliver, in the name of the designated transferee or transferees,
one or more new Trust Securities Certificates in authorized denominations of a
like aggregate Liquidation Amount dated the date of execution by such
Administrative Trustee or Trustees. The Securities Registrar shall not be
required to register the transfer of any Trust Securities that have been called
for redemption. At the option of a Holder,
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Trust Securities Certificates may be exchanged for other Trust Securities
Certificates in authorized denominations of the same class and of a like
aggregate Liquidation Amount upon surrender of the Trust Securities Certificates
to be exchanged.
Every Trust Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer, in form satisfactory to the Administrative Trustees and
the Securities Registrar, duly executed by the Holder or his or her attorney.
Each Trust Securities Certificate surrendered for registration of a transfer or
exchange shall be canceled and subsequently disposed of by the Administrative
Trustees.
No service charge shall be made for any registration of transfer or
exchange of Trust Securities Certificates, but the Administrative Trustees or
the Securities Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
or exchange of Trust Securities Certificates.
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees or any one of them on behalf of the Trust
shall execute and make available for delivery, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new
Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of a beneficial interest in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.
Section 5.06. Persons Deemed Securityholders. Prior to due
presentation of a Trust Securities Certificate for registration of transfer, the
Trustees or the Securities Registrar shall treat the Person in whose name any
Trust Securities Certificate shall be registered in the Securities Register as
the owner of such Trust Securities Certificate for the purpose of receiving
distributions and for all other purposes whatsoever, and neither the Trustees
nor
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the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.07. Access to List of Securityholders' Names and
Addresses. In addition to, and not by way of limitation of, the Depositor's
obligations under Section 312(a) of the Trust Indenture Act, the Depositor shall
furnish or cause to be furnished to the Property Trustee semi-annually, not
later than February 15 and August 15 of each year, a list in such form as the
Property Trustee may reasonably require, of the names and addresses of all
Owners of Preferred Securities. The Securities Registrar shall furnish or cause
to be furnished (x) to the Depositor, within 15 days after receipt by the
Securities Registrar of a request therefor from the Depositor in writing and (y)
to the Property Trustee, promptly after receipt by the Securities Registrar of a
request therefor from the Property Trustee , a list, in such form as the
Depositor or the Property Trustee (as applicable) may reasonably require, of the
names and addresses of the Securityholders as of the most recent record date. In
addition to, and not by way of limitation of, the provisions of Section 312(b)
of the Trust Indenture Act, if one or more Holders of Trust Securities
Certificates evidencing not less than 25% of the Liquidation Amount of the
outstanding Preferred Securities apply in writing to the Securities Registrar,
and such application states that the applicants desire to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities Certificates, and such application is accompanied by a copy
of the communication that such applicants propose to transmit, then the
Securities Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Securityholders. Each Holder, by receiving and holding a Trust
Securities Certificate, shall be deemed to have agreed not to hold either the
Depositor or the Securities Registrar accountable by reason of the disclosure of
its name and address, regardless of the source from which such information was
derived.
Section 5.08. Appointment of Paying Agent. The Paying Agent shall
make distributions to Securityholders from the Payment Account and shall report
the amounts of such distributions to the Property Trustee and the Administrative
Trustees. The Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the distributions referred to
above. The Administrative Trustees may revoke such power and remove the Paying
Agent if such Trustees determine in their sole discretion that the Paying Agent
shall have failed to perform its obligations under this Agreement in any
material respect. The Paying Agent shall initially be the Bank, and the Paying
Agent may choose any co-paying agent that is acceptable to the Administrative
Trustees, the Property Trustee and the Depositor. Any Person acting as a Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Administrative Trustees,
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the Property Trustee and the Depositor. In the event that the Bank shall no
longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank, trust company or the Depositor). The
Administrative Trustees shall cause such successor Paying Agent or any co-paying
agent appointed by the Paying Agent to execute and deliver to the Trustees an
instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Trustees that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply
to the Bank also in its role as Paying Agent, for so long as the Bank shall act
as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Any Paying Agent shall hold in trust for the benefit of the
Preferred Securityholders all sums held by such Paying Agent for payment on the
Preferred Securities, and shall give the Property Trustee notice of any default
hereunder by either the Trust or the Depositor.
Section 5.09. Book-Entry Preferred Securities Certificates; Common
Securities Certificate. (a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Preferred Securities
Certificate or Certificates representing Book-Entry Preferred Securities
Certificates to be delivered to The Depository Trust Company, the initial
Clearing Agency, or to a custodian designated by it, by, or on behalf of, the
Trust. Such Preferred Securities Certificate or Certificates shall initially be
registered on the Securities Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no Owner will receive a definitive Preferred
Securities Certificate representing such Owner's interest in such Preferred
Securities, except as provided in Section 5.11. Unless and until Definitive
Preferred Securities Certificates have been issued to Owners pursuant to Section
5.11:
(i) the provisions of this Section 5.09(a) shall be
in full force and effect;
(ii) the Securities Registrar, the Paying Agent and the
Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Trust Agreement relating
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to the Book-Entry Preferred Securities Certificates (including the
payment of principal of and interest on the Book-Entry Preferred
Securities and the giving of instructions or directions to Owners of
Book-Entry Preferred Securities) as the sole Holder of Book-Entry
Preferred Securities, and shall have no obligations to the Owners
thereof;
(iii) to the extent that the provisions of this Section 5.09
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.09 shall control;
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Letter of Representations, unless and
until Definitive Preferred Securities Certificates are issued pursuant
to Section 5.11, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants; and
(v) whenever this Trust Agreement requires or permits actions
to be taken based upon the instructions or directions of Holders of
Trust Certificates evidencing a specified percentage of the aggregate
Liquidation Amount, the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received instructions to
such effect from Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the applicable class of Trust Certificates and has
delivered such instructions to the Administrative Trustees.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate. In the event that the Depositor shall transfer
any of its Common Securities, additional Common Securities Certificates, in
definitive form, may be issued if required.
Section 5.10. Notices to Clearing Agency. To the extent a notice or
other communication to the Owners is required under this Trust Agreement, unless
and until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.11, the Trustees shall give all such notices and
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communications specified herein to be given to the Clearing Agency, and shall
have no obligations to the Owners.
Section 5.11. Definitive Preferred Securities Certificates. If (i)
the Depositor advises the Trustees in writing that the Clearing Agency is no
longer willing or able properly to discharge its responsibilities with respect
to the Preferred Securities Certificates, and the Depositor is unable to locate
a qualified successor, (ii) the Depositor at its option advises the Trustees in
writing that it elects to terminate the book-entry system through the Clearing
Agency or (iii) after the occurrence of an Event of Default, Owners of Preferred
Securities Certificates representing beneficial interests aggregating at least a
majority of the Liquidation Amount advise the Clearing Agency in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interest of the Owners of Preferred Securities Certificates, then
the Clearing Agency shall notify all Owners of Preferred Securities Certificates
and the Trustees of the occurrence of any such event and of the availability of
the Definitive Preferred Securities Certificates to Owners of such class or
classes, as applicable, requesting the same. Upon surrender to the
Administrative Trustees by the Clearing Agency of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates, accompanied by registration instructions, the
Administrative Trustees, or any one of them, shall execute the Definitive
Preferred Securities Certificates in accordance with the instructions of the
Clearing Agency. Neither the Securities Registrar nor the Trustees shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Preferred Securities Certificates, the Trustees shall recognize
the Holders of the Definitive Preferred Securities Certificates as Security-
holders. The Definitive Preferred Securities Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrative Trustees, as evidenced by the execution thereof
by the Administrative Trustees or any one of them.
Section 5.12. Rights of Securityholders. The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.09. The Securityholders shall not have any
right or title therein other than the beneficial interest in the Trust conferred
by their Trust Securities, and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Trust Securities,
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in their capacities as such, shall, except as otherwise set forth herein, be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
The right of any Holder of Trust Securities to receive payment of
Distributions on the Trust Securities in accordance with this Trust Agreement
and the terms of the Trust Securities on or after the respective payment dates
thereof, or to institute suit for the enforcement of any such payments on or
after such payment dates, shall not be impaired without the consent of each such
Holder.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01. Limitations on Voting Rights. (a) Except as provided
in this Section, in Sections 8.10 and 10.02 hereof, and in the Subordinated
Indenture, and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture Trustee with
respect to such Debentures, (ii) waive any past default which is waivable under
Section 513 of the Subordinated Indenture, (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Subordinated Indenture or the Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at least a
majority in Liquidation Amount of the Outstanding Trust Securities; provided,
however, that where a consent under the Subordinated Indenture would require the
consent of each holder of Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior written consent of each holder
of Trust Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Trust Securities, except pursuant to a
subsequent vote of the Outstanding Trust Securities. The Property Trustee shall
notify all Holders of the Trust Securities of any notice of default received
from the
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Debenture Trustee with respect to the Debentures. In addition to obtaining the
foregoing approvals of the Holders of the Outstanding Trust Securities, prior to
taking any of the foregoing actions, the Property Trustee shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that the Trust will not be classified as an association taxable as a
corporation for United States Federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Trust Agreement provides for,
or the Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Trust Securities,
whether by way of amendment to the Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than pursuant to the
terms of this Trust Agreement, then the Holders of Outstanding Trust Securities
as a class will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a majority in Liquidation Amount of the Outstanding Trust
Securities. No amendment to this Trust Agreement may be made if, as a result of
such amendment, the Trust would be classified as an association taxable as a
corporation for United States Federal income tax purposes.
Section 6.02. Notice of Meetings. Notice of all meetings of the
Preferred Securityholders, stating the time, place and purpose of the meeting,
shall be given by the Administrative Trustees pursuant to Section 10.07 to each
Trust Securityholder of record, at his or her registered address, at least 15
days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
Any and all notices to which any Trust Securityholder hereunder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Preferred Securityholder of record
at his last known address as recorded on the Securities Register.
Section 6.03. Meetings of Trust Securityholders. No annual meeting
of Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Security- holders to vote on any matter upon the written
request of Securityholders of record holding 25% (based upon aggregate
Liquidation Amount) of the Outstanding Trust Securities, and the Administrative
Trustees or the Property Trustee may, at any time in their discretion, call a
meeting of Securityholders to vote on any matters as to which Securityholders
are entitled to vote.
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Securityholders of record holding 50% or more of the Trust
Securities (based upon aggregate Liquidation Amount), present in person or by
proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Securityholders of record present, in person or by proxy, at such meeting
holding more than a majority of the Outstanding Trust Securities (based upon
aggregate Liquidation Amount) shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 6.04. Voting Rights. Securityholders shall be entitled to
one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote. Securityholders' voting rights shall be as provided by Section
316 of the Trust Indenture Act.
Section 6.05. Proxies, Etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a request by the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid later than thirty-six (36) full calendar months after its
date of execution (or such shorter period as may be provided therein).
Section 6.06. Securityholder Action by Written Consent. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding Trust
Securities (based upon aggregate Liquidation Amount) entitled to vote in respect
of such action (or such larger proportion thereof as shall be required by any
express provision of this Trust Agreement) shall consent to the action in
writing.
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Section 6.07. Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any distribution
on the Trust Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any other action,
the Administrative Trustees may, in the circumstances permitted under the Trust
Indenture Act, from time to time fix a date, not more than 90 days prior to the
date of any meeting of Securityholders, the payment of any distribution or other
action, as the case may be, as a record date for the determination of the
identity of the Securityholders of record for such purposes. If not set by the
Administrative Trustees prior to the first solicitation of a Securityholder made
by any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 5.07) prior to such first solicitation or vote,
as the case may be. With regard to any record date, only the Holders on such
date (or their duly designated proxies) shall be entitled to give or take, or
vote on, the relevant action.
Section 6.08. Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to an Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which any Trustee receiving the same deems
sufficient.
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Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder
to take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such Liquidation
Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.09. Inspection of Records. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to the
Administrative Trustees and the Property Trustee, the other records of the Trust
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BANK
Section 7.01. Representations and Warranties. The Bank hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
(a) the Bank is a banking corporation or trust company duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
(b) the Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
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(c) this Trust Agreement has been duly authorized, executed
and delivered by the Bank and constitutes the valid and legally binding
agreement of the Bank enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(d) the execution, delivery and performance by the Bank of
this Trust Agreement have been duly authorized by all necessary
corporate action on the part of the Bank and do not require any
approval of stockholders of the Bank, and such execution, delivery and
performance will not (i) violate the Bank's Charter or By-laws, (ii)
violate any provision of, or constitute, with or without notice or
lapse of time, a default under, or result in the creation or imposition
of, any Lien on any properties included in the Trust Property pursuant
to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Bank is a party
or by which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware governing the
banking or trust powers of the Bank or any order, judgment or decree
applicable to the Bank;
(e) neither the authorization, execution or delivery by the
Bank of this Trust Agreement nor the consummation of any of the
transactions by the Bank contemplated herein or therein requires the
consent or approval of, the giving of notice to, the registration with
or the taking of any other action with respect to, any governmental
authority or agency under any existing Federal law governing the
banking or trust powers of the Bank or under the laws of the State of
Delaware; and
(f) there are no proceedings pending or, to the best of the
Bank's knowledge, threatened against or affecting the Bank in any court
or before any governmental authority, agency or arbitration board or
tribunal which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Bank to enter into or perform its obligations as one
of the Trustees under this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 8.01. Certain Duties and Responsibilities. (a) The duties
and responsibilities of the Trustees shall be as provided by this Trust
Agreement and, in the case of the Property Trustee, by the Trust Indenture Act.
The Trustees shall have all the privileges, rights and immunities provided by
the Delaware
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Business Trust Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require any of the Trustees to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. To the
extent that, at law or in equity, a Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the Securityholders,
such Trustee shall not be liable to the Trust or to any Securityholder for such
Trustee's good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of the Trustees otherwise existing at law or in equity, are
agreed by the Depositor and the Securityholders to replace such other duties and
liabilities of the Trustees. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section and, in the case of the Property Trustee, to the
provisions of the Trust Indenture Act.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property. Each Securityholder, by its acceptance of a Trust
Security, agrees that it will look solely to the income and proceeds from the
Trust Property to the extent legally available for distribution to it as herein
provided and that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.01(b) does not limit the liability
of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the
case of the Property Trustee, in the Trust Indenture Act.
(c) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement and no implied covenants shall be read into this Trust
Agreement against the Property Trustee. In case an Event of Default has occurred
(that has not been cured or waived), the Property Trustee shall exercise such of
the rights and powers vested in it by this Trust Agreement, and use the same
degree of care and skill in their exercise, 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 Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
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(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the
pertinent facts;
(ii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
not less than a majority in Liquidation Amount of the
Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust
Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the
Debentures and the Payment Account shall be to deal with
such Property in a similar manner as the Property Trustee
deals with similar property for its own account, subject
to the protections and limitations on liability afforded
to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise
agree with the Depositor. Money held by the Property
Trustee need not be segregated from other funds held by it
except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.01 and except
to the extent otherwise required by law;
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees
or the Depositor with respect to their respective duties
under this Trust Agreement, nor shall the Property Trustee
be liable for the default or misconduct of the
Administrative Trustees or the Depositor; and
(vi) the Property Trustee shall have no responsibility for the
genuineness, value or
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sufficiency of the Debentures, or for the payment of any
taxes assessed or levied thereon.
Section 8.02. Notice of Defaults. Within five Business Days after
the occurrence of any Event of Default actually known to the Property Trustee,
the Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.09, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such default shall have been
cured or waived. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default.
Section 8.03. Certain Rights of the Property Trustee. Subject to the
provisions of Section 8.01 and except as provided by law:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses
of action or (ii) in construing any of the provisions in this Trust
Agreement the Property Trustee finds the same ambiguous or inconsistent
with any other provisions contained herein or (iii) the Property
Trustee is unsure of the application of any provision of this Trust
Agreement, then, except as to any matter as to which the Preferred
Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of
action to be taken. The Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days
after it has delivered such notice, or such reasonably shorter period
of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this
Trust Agreement as
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it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the
Administrative Trustees contemplated by this Trust
Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(d) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be
established before undertaking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel and the
written advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon; the Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Agreement from any court of
competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders shall
have offered to the Property Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to
do so by one or more Securityholders, but
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the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see
fit;
(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, provided that the Property Trustee
shall be responsible for its own negligence or recklessness with
respect to selection of any agent or attorney appointed by it
hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given by
the Holders of the same proportion in Liquidation Amount of the Trust
Securities as would be entitled to direct the Property Trustee under
the terms of the Trust Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and,
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 8.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the Trustees do
not assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Trust of the proceeds of the Trust
Securities, provided that such use or application is in accordance with Section
2.05.
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Section. 8.05. May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 8.06. Compensation; Fees; Indemnity. The Depositor and the
Trust each agrees:
(1) to pay to the Trustees from time to time such compensation
as the Depositor and the Trustees shall from time to time agree in
writing for all services rendered by the Trustees hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustees or any predecessor
Trustee for, and to hold the Trustees harmless against, any and all
loss, damage, claims, liability, penalty or expense, including taxes,
other than taxes based on the income of the Trustee or withholding
taxes imposed with respect to payments on the Trust Securities,
incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The provisions of this
Section 8.06 shall survive the termination of this Trust Agreement, and
to secure the same, the Property Trustee shall have a lien against the
Trust Property which lien shall be prior to the claims of the
Securityholders.
Section 8.07. Corporate Property Trustee Required; Eligibility of
Trustees. (a) There shall at all times be a Property Trustee, qualified as
provided in Section 310(a) of the Trust Indenture Act, hereunder with respect to
the Trust Securities. The Property Trustee shall be a Person that has (a) a
combined capital and surplus of at least $50,000,000 and (b) an
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unsecured or deposit rating of at least investment grade by each of Standard &
Poor's Corporation and Moody's Investors Services, Inc. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind such
entity.
Section 8.08. Conflicting Interests. None of the Trust, SPS or any
Person directly or indirectly controlling, controlled by or under common control
with either the Trust or SPS may serve as Property Trustee hereunder. If the
Property Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Property Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Trust Agreement.
Section 8.09. Co-Trustees and Separate Trustees. Unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Depositor and the Administrative Trustees, by agreed action of the majority
of such Administrative Trustees, shall have power to appoint, and upon the
written request of the Administrative Trustees, the Depositor shall for such
purpose join with the Administrative Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in accordance with
Section 310(a) of the Trust Indenture Act, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Depositor does not join in such appointment within 15 days after the receipt by
it of a request so to do, or in case a Debenture Event of Default has occurred
and is continuing, the Administrative Trustees and the Property Trustee,
respectively,
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alone shall have power to make such appointment. Any co-trustee or separate
trustee appointed pursuant to this Section shall satisfy the requirements of
Section 8.07.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:
(1) The Trust Securities shall be executed and delivered, and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder, shall be exercised, solely by such Trustees.
(2) The rights, powers, duties and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall
be incompetent or unqualified to perform such Act, in which event such
rights, powers, duties, and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(3) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case an Event of Default
under the Subordinated Indenture has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee without the concurrence
of the Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution,
delivery, and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A successor to
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any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee, or any other trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee. Upon receipt of such Act of Holders, the Property Trustee
shall promptly deliver a copy thereof to each such co-trustee and
separate trustee.
Section 8.10. Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time with respect to the
Trust Securities by giving written notice thereof to the Securityholders. If the
instrument of acceptance by a successor Relevant Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 30 days after
the giving of such notice of resignation, the resigning Relevant Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee with respect to the Trust Securities.
Unless an Event of Default shall have occurred and be continuing,
the Relevant Trustee may be removed at any time by the Depositor. If an Event of
Default shall have occurred and be continuing, the Relevant Trustee may be
removed at such time by Act of the Securityholders of a majority in aggregate
Liquidation Amount of the Trust Securities Certificates then Outstanding,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). In the event that any Securityholder is deemed to have waived the
right to act to remove the Relevant Trustee, then for the purpose of determining
whether a majority in aggregate Liquidation Amount of Trust Security
Certificates have acted to remove the Relevant Trustee, the Trust Securities of
such Securityholders shall be treated as if they are not Outstanding.
If the Relevant Trustee shall resign, be removed or become incapable
of continuing to act as Relevant Trustee at a time when no Event of Default
shall have occurred and be continuing, the Depositor, by delivering notice to
the retiring Relevant Trustee,
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shall promptly appoint a successor Relevant Trustee or Trustees with respect to
the Trust Securities and the Trust, and the retiring Relevant Trustee shall
comply with the applicable requirements of Section 8.11. If the Relevant Trustee
shall resign, be removed or become incapable of continuing to act as the
Relevant Trustee at a time when an Event of Default shall have occurred and be
continuing, the Securityholders, by Act of the Securityholders of a majority in
Liquidation Amount of the Trust Securities then Outstanding delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees with respect to the Trust Securities and the Trust, and the Relevant
Trustee shall comply with the applicable requirements of Section 8.11. In the
event that any Securityholder is deemed to have waived the right to appoint a
successor Relevant Trustee or Trustees with respect to the Trust Securities and
the Trust, then for the purpose of determining whether a majority in aggregate
Liquidation Amount of the Trust Securities then Outstanding have acted to
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, the Trust Securities of such Securityholder shall be
treated as if they are not Outstanding. If no successor Relevant Trustee with
respect to the Trust Securities shall have been so appointed by the Depositor or
the Trust Securityholders and have accepted such appointment in the manner
required by Section 8.11, any Securityholder who has been a Securityholder of
Trust Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee with respect to the Trust
Securities.
The retiring Relevant Trustee shall give notice of each resignation
and each removal of such Relevant Trustee and each appointment of a successor
Relevant Trustee with respect to the Trust Securities and the Trust to all
Securityholders in the manner provided in Section 10.09 and to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Property Trustee who is
a natural person dies or becomes incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by (i) the
unanimous act of remaining Administrative Trustees if there are at least two of
them or (ii) otherwise by the Depositor (with the successor in each case being
an individual who satisfies the eligibility requirement for Administrative
Trustees set forth in Section 8.07). Additionally, notwithstanding the foregoing
or any other provision of this Trust Agreement, in the event the Depositor
believes that any Administrative Trustee has become incompetent or
incapacitated, the Depositor, by notice to the remaining Trustees, may terminate
the status of such Person as an Administrative Trustee (in which
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case the vacancy so created will be filled in accordance with the
preceding sentence).
Section 8.11. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Relevant Trustee with respect to all Trust
Securities and the Trust, every such successor Relevant Trustee so appointed
shall execute, acknowledge and deliver to the Trust and to the retiring Relevant
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Relevant Trustee shall become effective, and such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on the request of the Depositor or the successor Relevant
Trustee, such retiring Relevant Trustee shall, upon payment of charges due to
such retiring Relevant Trustee, execute and deliver an instrument transferring
to such successor Relevant Trustee all the rights, powers and trusts of the
retiring Relevant Trustee and shall duly assign, transfer and deliver to such
successor Relevant Trustee all property and money held by such retiring Relevant
Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust Securities
shall execute and deliver an amendment hereto wherein each successor Relevant
Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (2) shall add to or change any of the provisions of this Trust
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee, and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee with respect to the Trust Securities and the
Trust; but, on request of the Trust or any successor Relevant Trustee, such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
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Upon request of any such successor Relevant Trustee, the
Administrative Trustees on behalf of the Trust shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Relevant Trustee all such rights, powers and trusts referred to in
this Section 8.11.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
Section 8.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Property Trustee or any Administrative
Trustee which is not a natural person may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which such Relevant Trustee shall be a party, shall be the
successor of such Relevant Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article VIII, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
Section 8.13. Preferential Collection of Claims Against Depositor or
Trust. If and when the Property Trustee shall be or become a creditor of the
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Trust (or any such other obligor).
Section 8.14. Reports by the Property Trustee. (a) Within 60 days
after December 31 of each year commencing with December 31, 1996, the Property
Trustee shall transmit by mail to all Securityholders, as their names and
addresses appear in the Securities Register, and to the Depositor, a brief
report dated as of such December 31 with respect to:
(i) its eligibility under Section 8.07 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect; and
(ii) any action taken by the Property Trustee in the
performance of its duties hereunder which it has not previously
reported and which in its opinion materially affects the Trust
Securities.
(b) In addition, the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
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(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each stock
exchange upon which the Trust Securities are listed, with the Commission and
with the Depositor.
Section 8.15. Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information (if any) as may be required by
Section 314 of the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act, in each case in the form, in the
manner and at the times required by Section 314 of the Trust Indenture Act.
Section 8.16. Evidence of Compliance with Conditions Precedent. Each
of the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
Section 8.17. Number of Trustees. (a) The number of Trustees shall
be four, provided that the Depositor, by written instrument, may increase or
decrease the number of Trustees.
(b) If a Trustee ceases to hold office for any reason, and the
number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or
if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 8.18. Delegation of Power. (a) Any Administrative Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 2.07(a), including any registration
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statement or amendment thereto filed with the Commission, or making any other
governmental filing.
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number the doing of such things and the execution
of such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE IX
TERMINATION AND LIQUIDATION
Section 9.01. Termination upon Expiration Date. Unless earlier
terminated, the Trust shall automatically terminate on September 1, 2036 (the
"expiration date"), following the distribution of the Trust Property in
accordance with Section 9.04.
Section 9.02. Early Termination. Upon the first to occur of any of
the following events (such first occurrence, an "Early Termination Event"):
(i) the occurrence of a Bankruptcy Event in
respect of, or the dissolution or liquidation of, a
Common Securityholder;
(ii) the Depositor has elected to cause the Trust
to be dissolved pursuant to Section 4.02(b);
(iii) the redemption of all of the Preferred
Securities; and
(iv) the issuance of an order for dissolution of the
Trust by a court of competent jurisdiction;
the Trust shall automatically terminate following (except in the case of clause
(i)) the distribution of the Trust Property in accordance with Section 9.04.
Section 9.03. Termination. Except in the case of a termination
pursuant to Section 9.02(i), the respective obligations and responsibilities of
the Trustees and the Trust created and continued hereby shall terminate upon the
latest to occur of the following: (i) the distribution by the Property Trustee
to Securityholders, upon the liquidation of the Trust pursuant to Section 9.04,
or upon the redemption of all of the Trust Securities pursuant to Section 4.02,
of all amounts required to be distributed hereunder upon the final payment of
the Trust Securities; (ii) the payment of any expenses owed by the Trust; and
(iii) the discharge
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of all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust and the
Securityholders. In the case of a termination pursuant to Section 9.02(i), the
respective obligations and responsibilities of the Trustees and the Trust
created and continued hereby shall terminate without any further action upon the
occurrence of the event specified in Section 9.02(i).
Section 9.04. Liquidation. (a) If an Early Termination Event
specified in clause (ii) of Section 9.02 occurs, the Trustees shall, as
expeditiously as the Trustees determine to be practicable, make a final
distribution (a "Final Distribution") distributing, subject to receipt of an
Opinion of Counsel as specified in Section 4.02(b), to each Securityholder a
Like Amount of Debentures, subject to Section 9.04(e). Notice of such Final
Distribution shall be given by the Administrative Trustees by first-class mail,
postage prepaid, mailed not later than 30 nor more than 60 days prior to the
Final Distribution Date to each Holder of Trust Securities at such Holder's
address appearing in the Securities Register. Any such notice of Final
Distribution shall:
(i) state the Liquidation Date;
(ii) state that from and after the Final Distribution Date,
the Trust Securities will no longer be deemed to be outstanding and any
Trust Securities Certificates not surrendered for exchange will be
deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.04(e) applies receive a Final Distribution,
as the Administrative Trustees or the Property Trustee shall
deem appropriate.
(b) If an Early Termination Event specified in clause (i) of Section
9.02 occurs, a Liquidating Trustee may be appointed (which Liquidating Trustee
may be the same Person as the Property Trustee) by Act of the Securityholders of
a majority in aggregate Liquidation Amount of the Outstanding Trust Securities
or by a court of competent jurisdiction. Any such Liquidating Trustee shall
(unless otherwise instructed by a court of competent jurisdiction) distribute
the Trust Property in substantially the same manner as described in Section
9.04(a), (c) and (d), or, if deemed appropriate by such Liquidating Trustee,
shall liquidate the Trust Property and distribute the proceeds in substantially
the same manner as described in Section 9.04(e).
(c) Except where Section 9.04(e) applies, in order to effect the
Final Distribution of the Debentures to Securityholders,
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the Property Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Final Distribution Date) and, either
itself acting as exchange agent or through the appointment of a separate
exchange agent, shall establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.
(d) Except where Section 9.04(e) applies, after the Final
Distribution Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
SPS shall use its reasonable efforts to have the Debentures listed on the New
York Stock Exchange or on such other exchanges as the Preferred Securities are
then listed, (iv) any Trust Securities Certificates not so surrendered for
exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last Distribution
Date on which a Distribution was made on such Trust Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(e) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee (or the Liquidating
Trustee if one is appointed pursuant to Section 9.04(b)) not to be practical,
the Trust Property shall be liquidated, the proceeds distributed and the Trust
Certificates canceled by the Property Trustee in such manner as the Property
Trustee determines. In such event, on the date specified by the Property
Trustee, Securityholders will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors, an amount equal to the Liquidation Amount per Trust
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such termination pro rata (determined as aforesaid) with
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Holders of Preferred Securities, except that, if an Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority over
the Common Securities.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Limitation on Rights of Securityholders. The death or
incapacity of any person having an interest, beneficial or otherwise, in a Trust
Security shall not operate to terminate this Trust Agreement, nor entitle the
legal representatives or heirs of such person or any Securityholder for such
person, to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Section 10.02. Amendment. (a) This Trust Agreement may be amended
from time to time by the Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement or (ii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will not be classified for United States Federal income tax purposes as an
association taxable as a corporation at any time that any Trust Securities are
outstanding or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act of 1940, as amended;
provided, however, that such amendment or action shall not adversely affect the
rights of any Securityholder and, in the case of clause (i), any amendments of
this Trust Agreement shall become effective only when notice thereof is given to
the Securityholders.
(b) Except as provided in Section 10.02(c) hereof, any provision of
this Trust Agreement may be amended by the Trustees and the Depositor with (i)
the consent of Trust Securityholders representing not less than a majority
(based upon Liquidation Amounts) of the Trust Securities then Outstanding and
(ii) receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States Federal income tax purposes or cause the Trust to fail or cease to
qualify for an exemption from the status of an "investment company" under the
Investment Company Act of 1940, as amended.
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(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06 hereof), this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such Distribution on or after such date.
Notwithstanding any other provision herein, without the unanimous consent of the
Securityholders (such consent being obtained in accordance with Section 6.03 or
6.06 hereof), paragraph (b) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for an exemption from
status of an "investment company" under the Investment Company Act of 1940, as
amended.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) The Property Trustee shall not be required to enter into any
amendment to this Trust Agreement which affects its own rights, duties or
immunities under this Trust Agreement. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust Agreement.
Section 10.03. Separability. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.04. Tax Elections. Each holder of Trust Securities,
including any subsequent holder of Trust Securities, by accepting a Trust
Security grants to the Depositor a power of attorney to file any election
(including any protective election) that is necessary or desirable to cause the
Trust to be treated for income tax purposes as a grantor trust and/or not as an
association taxable as a corporation.
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Section 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
Section 10.06. Successors. This Trust Agreement shall be binding
upon and shall inure to the benefit of any successor to the Trust or the
Relevant Trustee or both, including any successor by operation of law.
Section 10.07. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.08. Intention of Parties. It is the intention of the
parties hereto that the Trust not be classified for United States Federal income
tax purposes an association taxable as a corporation or partnership but that the
Trust be treated as a grantor trust for United States Federal income tax
purposes. The provisions of this Trust Agreement shall be interpreted to further
this intention of the parties.
Section 10.09. Notice and Demand. Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear on the
Securities Register and (ii) in the case of the Common Securityholder or the
Depositor, to Southwestern Public Service Company, Tyler at Sixth, Amarillo,
Texas 79101, Attention: Secretary, facsimile no. (806) 378-2995. Such notice,
demand or other communication to or upon a Securityholder shall be deemed to
have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is furnished in writing) as follows:
(i) with respect to the Property Trustee, Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration; and (ii) with respect to the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention: Administrative Trustees of Southwestern Public Service Capital I,
c/o Secretary." Such notice, demand or other communication to or upon the Trust
or
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the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.
Section 10.10. Agreement Not to Petition. Each of the Trustees and
the Depositor agree for the benefit of the Securityholders that, until at least
one year and one day after the Trust has been terminated in accordance with
Article IX, they shall not file, or join in the filing of, a petition against
the Trust under any bankruptcy, reorganization, arrangement, insolvency,
liquidation or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.10, the
Property Trustee agrees, for the benefit of Securityholders, that, at the
expense of Depositor, the Property Trustee will file an answer with the
bankruptcy court or otherwise properly contest the filing of such petition
against the Trust or the commencement of such action and raise the defense that
the Depositor has agreed in writing not to take such action and should be
estopped and precluded therefrom and such other defenses, if any, as counsel for
the Trustee or the Trust may assert. The provisions of this Section 10.10 shall
survive the termination of this Trust Agreement.
Section 10.11. Trust Indenture Act; Conflict with Trust Indenture
Act. (a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the required provisions of the Trust Indenture Act or
otherwise limits, qualifies or conflicts with the duties imposed by Sections 310
through 317 inclusive of the Trust Indenture Act, such required or imposed
provision shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND
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ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS
AND PROVISIONS OF THIS TRUST AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Trust Agreement, in the case of SPS, the Bank and the Property Trustee by their
representatives thereunto duly authorized.
/s/ David M. Wilks
--------------------------
David M. Wilks,
as Initial Depositor
SOUTHWESTERN PUBLIC SERVICE COMPANY,
as Depositor
By: /s/ Bill D. Helton
------------------------------
Name: Bill D. Helton
Title: Chairman of the Board
WILMINGTON TRUST COMPANY,
as Property Trustee
By: /s/ Donald G. MacKelcan
------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
WILMINGTON TRUST COMPANY
By: /s/ Donald G. MacKelcan
------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice Presidnt
/s/ David M. Wilks
-----------------------------
David M. Wilks,
as Administrative Trustee
/s/ Robert D. Dickerson
-----------------------------
Robert D. Dickerson,
as Administrative Trustee
/s/ James D. Steinhilper
-----------------------------
James D. Steinhilper,
as Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST
OF
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
THIS CERTIFICATE OF TRUST of Southwestern Public Service Capital I
(the "Trust"), dated June 5, 1996, is being duly executed and filed by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. c. ss.ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
Southwestern Public Service Capital I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware is
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective as
of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY,
as Trustee
By:
-----------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
A-1
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EXHIBIT B
LETTER OF REPRESENTATIONS
October 18, 1996
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: General Counsel's Office
Re: Southwestern Public Service Capital I
7.85% Trust Preferred Securities, Series A
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating
to the issuance and deposit with The Depository Trust Company ("DTC") of the
Southwestern Public Service Capital I 7.85% Trust Preferred Securities, Series A
(the "Preferred Securities"), of Southwestern Public Service Capital I, a
Delaware business trust (the "Issuer"), formed pursuant to a Trust Agreement
between David M. Wilks, as Initial Depositor and Wilmington Trust Company (the
"Bank"), as amended and restated in an Amended and Restated Trust Agreement
dated as of October 21, 1996 among the Initial Depositor, Southwestern Public
Service Company ("SPS"), the Bank and David M. Wilks, Robert D. Dickerson, and
James D. Steinhilper as Trustees (the "Trustees"). The payment of distributions
on the Preferred Securities and payments due upon liquidation of the Issuer or
redemption of the Preferred Securities are to be guaranteed by SPS to the extent
set forth in a Guarantee Agreement dated October 21, 1996 by SPS and Wilmington
Trust Company, as guarantee trustee, with respect to the Preferred Securities.
SPS and the Issuer propose to sell the Preferred Securities to certain
Underwriters (the "Underwriters") pursuant to an Underwriting Agreement dated
October 16, 1996 by and among the Underwriters, the Issuer and SPS, and the
Underwriters wish to take delivery of the Preferred Securities through DTC.
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's Rules with respect to the
Preferred Securities, the Issuer and Wilmington Trust Company make the following
representations to DTC:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about October 21, 1996, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the name of DTC's nominee,
Cede & Co., representing an aggregate of up to 4,000,000 Preferred Securities
and bearing the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Issuer or its agent for
registration of transfer, exchange, or payment, and
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any certificate issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
2. The Amended and Restated Trust Agreement of Southwestern Public
Service Capital I provides for the voting by holders of the Preferred Securities
under certain limited circumstances. The Issuer shall establish a record date
for such purposes and shall, to the extent possible, give DTC notice of such
record date not less than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the Bank
shall send DTC a notice of such event at least 5 business days prior to the
effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Bank shall send DTC a notice specifying: (a) the amount of and conditions, if
any, applicable to the payment of any such distribution or any such offering or
issuance of rights; (b) any applicable expiration or deadline date, or any date
by which any action on the part of the holders of Preferred Securities is
required; and (c) the date any required notice is to be mailed by or on behalf
of the Issuer to holders of Preferred Securities or published by or on behalf of
the Issuer (whether by mail or publication, the "Publication Date"). Such notice
shall be sent to DTC by a secure means (e.g., legible telecopy, registered or
certified mail, overnight delivery) in a timely manner designed to assure that
such notice is in DTC's possession no later than the close of business on the
business day before the Publication Date. The Issuer or the Bank will forward
such notice either in a separate secure transmission for each CUSIP number or in
a secure transmission for multiple CUSIP numbers (if applicable) that includes a
manifest or list of each CUSIP number submitted in that transmission. (The party
sending such notice shall have a method to verify subsequently the use of such
means and the timeliness of such notice.) The Publication Date shall be not less
than 30 calendar days nor more than 60 calendar days prior to the payment of any
such distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on the
Preferred Securities, the Issuer or the Bank will notify DTC's Dividend
Department of such payment 5 business days prior to payment date. Notices to
DTC's Dividend Department by telecopy shall be sent to (212) 709-1723. Such
notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Bank shall confirm DTC's receipt of such telecopy
by telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Bank to DTC not less than
30 calendar days prior to such event by a secure means in the manner set forth
in paragraph 4. Such redemption notice shall be sent to DTC's Call Notification
Department
B-2
<PAGE>
at (516) 227-4164 or (516) 227-4190, and receipt of such notice shall be
confirmed by telephoning (516) 227-4070. Notice by mail or by any other means
shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Bank to DTC by a secure means
and in a timely manner as described in paragraph 4. Notices to DTC pursuant to
this paragraph and notices of other corporate actions (including mandatory
tenders, exchanges and capital changes), shall be sent, unless notification to
another department is expressly provided for herein, by telecopy to DTC's
Reorganization Department at (212) 709-1093 or (212) 709-1094 and receipt of
such notice shall be confirmed by telephoning (212) 709-6884, or by mail or any
other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "Southwestern Public Service Capital I 7.85% Trust Preferred Securities,
Series A."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be governed by
DTC's current Principal and Income Payments Rider, a copy of which is attached
hereto as Annex I. For purposes of this letter, the term "Agent" used in Annex I
shall be deemed to refer to the Bank.
9. DTC may direct the Issuer and the Bank to use any other telecopy
number or address of DTC as the number or address to which notices or payments
may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Bank's invitation) necessitating a reduction in the aggregate number of
Preferred Securities outstanding evidenced by the Global Certificate, DTC, in
its discretion: (a) may request the Issuer or the Bank to issue and countersign
a new Global Certificate; or (b) may make an appropriate notation on the Global
Certificate indicating the date and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving reasonable prior
written notice to the Issuer and the Bank (at which time DTC will confirm with
the Issuer or the Bank the aggregate number of Preferred Securities deposited
with it) and discharging its responsibilities with respect thereto under
applicable law. Under such circumstances, the Issuer may determine to make
alternative arrangements for book-entry settlement for the Preferred Securities,
make available one or more separate global certificates evidencing Preferred
Securities to any Participant having Preferred Securities credited to its DTC
account, or issue definitive Preferred Securities to the beneficial holders
thereof, and in any such case, DTC agrees to cooperate fully with the Issuer and
the Bank and to return the Global Certificate, duly endorsed for transfer as
directed
B-3
<PAGE>
by the Issuer or the Bank, together with any other documents of transfer
reasonably requested by the Issuer or the Bank.
12. In the event that the Issuer determines that beneficial owners
of Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Bank shall notify DTC of the availability of certificates. In
such event, the Issuer or the Bank shall issue, transfer and exchange
certificates in appropriate amounts, as required by DTC and others, and DTC
agrees to cooperate fully with the Issuer and the Bank and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the Bank,
together with any other documents of transfer reasonably requested by the Issuer
or the Bank.
13. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
14. The Issuer (a) understands that DTC has no obligation to, and
will not, communicate to its Participants or to any person having an interest in
the Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificate(s) by virtue of submission of such certificate(s) to DTC.
Nothing herein shall be deemed to require the Bank to advance funds
on behalf of the Issuer.
B-4
<PAGE>
Very truly yours,
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
(As Issuer)
By: Southwestern Public Service
Company, Depositor
By:
Name:
Title:
WILMINGTON TRUST COMPANY
Property Trustee
By:
Name:
Title:
RECEIVED AND ACCEPTED: WILMINGTON TRUST COMPANY
THE DEPOSITORY TRUST COMPANY
By:
Name:
By: ________________________________ Title:
Authorized Officer
B-5
<PAGE>
EXHIBIT C
PRINCIPAL AND INCOME PAYMENTS RIDER
1. This Rider supersedes any contradictory language set forth in the
Letter of Representations to which it is appended.
2. With respect to principal and income payments in the Securities:
A. Issuer or Agent shall provide notice to a standard interest and
dividend announcement service subscribed to by DTC. In the
event that no such service exists, Issuer or Agent shall
provide such notice directly to DTC electronically, as
previously arranged by Issuer or Agent and DTC. If electronic
transmission has not been arranged, absent any other
arrangements between Issuer or Agent and DTC, such notice shall
be sent by telecopy to DTC's Dividend Department at (212)
709-1723 or (212) 709-1686, and receipt of such notices shall
be confirmed by telephoning (212) 709-1270. Notices to DTC
pursuant to the above by mail or any other means shall be sent
to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
B. Issuer or Agent shall provide DTC, no later that noon (Eastern
Time) on each periodic interest, principal or dividend payment
date, a written notice of payment information containing the
Security CUSIP numbers for which payment will be sent, as well
as the dollar amount of payment.
C. Dividends, interest payments, and principal payments that are
part of periodic principal-and-interest payments shall be
received by Cede & Co., as nominee of DTC, or its registered
assigns, in same-day funds no later than 2:30 p.m. (Eastern
Time) on each payment date. Absent any other arrangements
between Issuer or Agent and DTC, such funds shall be wired as
follows:
The Chase Manhattan Bank
ABA # 021 000 021
For Credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account # 066 026776
D. Maturity and redemption payments with CUSIP-level detail shall
be received by Cede & Co., as nominee of DTC, or its registered
assigns, in same-day
C-1
<PAGE>
funds by 2:30 p.m. (Eastern Time) on the payable date. Absent
any other arrangements between Issuer or Agent and DTC, such
funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Account # 066-027306
E. Principal payments (plus accrued interest, if any) as the
result of optional tenders for purchase effected by means of
DTC's Repayment Option Procedures shall be received by Cede &
Co., as nominee of DTC, or its registered assigns, in same-day
funds by 2:30 p.m. (Eastern Time) on the first payable date.
Absent any other arrangements between Issuer or Agent and DTC,
such funds shall be wired as follows
The Chase Manhattan Bank
ABA 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Deposit Account # 066-027608
C-2
<PAGE>
EXHIBIT D
REPRESENTATIONS FOR DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC") --
to be included in DTC Letter of Representations
The Security certificate(s) shall remain in Agent's custody as a
"Balance Certificate" subject to the provisions of the Balance Certificate
Agreement between Agent and DTC currently in effect.
On each day on which Agent is open for business and on which it
receives an instruction originated by a Participant through DTC's
Deposit/Withdrawal at Custodian ("DWAC") system to increase the Participant's
account by a specified number of shares, units, or obligations (a "Deposit
Instruction"), Agent shall, before 6:30 p.m. (Eastern Time) that day, either
approve or cancel the Deposit Instruction through the DWAC system.
On each day on which Agent is open for business and on which it
receives an instruction originated by a Participant through the DWAC system to
decrease the Participant's account by a specified number of shares, units, or
obligations (a "Withdrawal Instruction"), Agent shall, before 6:30 p.m. (Eastern
Time) that day, either approve or cancel the Withdrawal Instruction through the
DWAC system.
Agent agrees that its approval of a Deposit or Withdrawal
Instruction shall be deemed to be the receipt by DTC of a new, reissued or
reregistered certificated security on registration of transfer to the name of
Cede & Co. for the quantity of Securities evidenced by the Balance Certificate
after the Deposit or Withdrawal Instruction is effected.
D-1
<PAGE>
EXHIBIT E
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1 123,711
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
Common Securities, Series A
(liquidation amount U.S. $25 per Common Security)
Southwestern Public Service Capital I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby certifies
that Southwestern Public Service Company (the "Holder") is the registered owner
of 123,711 common securities of the Trust representing beneficial interests in
the Trust and designated the Common Securities (liquidation amount U.S. $25 per
Common Security) (the "Common Securities"). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of October 21, 1996, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
E-1
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ___ day of October, 1996.
Southwestern Public Service Capital I
By:
-----------------------------------
Administrative Trustee
E-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
agent to transfer this 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)
<PAGE>
EXHIBIT F
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as October 21, 1996 between Southwestern Public
Service Company, a New Mexico corporation ("SPS"), and Southwestern Public
Service Capital I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to and receive Debentures from SPS and to issue and sell
Southwestern Public Service Capital I 7.85% Trust Preferred Securities, Series
(the "Preferred Securities") with such powers, preferences and special rights
and restrictions as are set forth in the Amended and Restated Trust Agreement of
the Trust dated as of October 21, 1996 as the same may be amended from time to
time (the "Trust Agreement");
WHEREAS, SPS is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of
the Preferred Securities, which purchase SPS hereby agrees shall benefit SPS and
which purchase SPS acknowledges will be made in reliance upon the execution and
delivery of this Agreement, SPS and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by SPS. Subject to the terms and conditions
hereof, SPS hereby irrevocably and unconditionally guarantees to each person or
entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Creditors") the full payment, when and as due, of any and all Obligations (as
hereinafter defined) to such Creditors. As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than obligations of
the Trust to pay to holders of any Preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be. This
Agreement is intended to be for the benefit of, and to be enforceable by, all
such Creditors, whether or not such Creditors have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and
be of no further force and effect upon the date on which there are no Creditors
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any Creditor must
restore payment of any sums paid under any Obligation for any reason whatsoever.
This Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. SPS hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and SPS hereby waives presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
Section 1.04. No Impairment. The obligations, covenants, agreements
and duties of SPS under this Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
F-1
<PAGE>
(a) the extension of time for the payment by the Trust of all
or any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the
part of the Creditors to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Creditors with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt or, or other similar proceedings affecting, the Trust or any of the
assets of the Trust.
There shall be no obligation of the Creditors to give notice to, or obtain the
consent of, SPS with respect to the happening of any of the foregoing.
Section 1.05. Enforcement. A Creditor may enforce this Agreement
directly against SPS and SPS waives any right or remedy to require that any
action be brought against the Trust or any other person or entity before
proceeding against SPS.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns, receivers,
trustees and representatives of SPS and shall inure to the benefit of the
Creditors.
Section 2.02. Amendment. So long as there remains any Creditor or
any Preferred Securities of any series are outstanding, this Agreement shall not
be modified or amended in any manner adverse to such Creditor or to the holders
of the Preferred Securities.
Section 2.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex), to wit:
Southwestern Public Service Capital I
Wilmington Trust Company
Rodney Square North,
1100 North Market Street
Wilmington, Delaware 19890
F-2
<PAGE>
and copies to:
Southwestern Public Service Company
Tyler at Sixth
Amarillo, Texas 79101
Facsimile No.: (806) 378-2995
Attention: Secretary
(with a copy sent to the same
address marked to the attention of the
the Administrative Trustees)
Facsimile No.: (806) 378-2995
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
F-3
<PAGE>
THIS AGREEMENT is executed as of the day and year first above
written.
SOUTHWESTERN PUBLIC SERVICE COMPANY
By:
----------------------------------
Name:
Title:
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
By:
-----------------------------------
Administrative Trustee
F-4
<PAGE>
EXHIBIT G
This Preferred Security is a Global Certificate within the meaning
of the Trust Agreement hereinafter referred to and is registered in the name of
The Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York City)
to Southwestern Public Service Capital I 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
P-1 4,000,000
CUSIP NO. 845739200
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
SOUTHWESTERN PUBLIC SERVICE CAPITAL I
7.85% Trust Preferred Securities, Series A
(liquidation amount U.S. $25 per Preferred Security)
Southwestern Public Service Capital I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby certifies
that Cede & Co. (the "Holder") is the registered owner of 4,000,000 preferred
securities of the Trust representing a beneficial ownership interest in the
Trust and designated the Southwestern Public Service Capital I 7.85% Trust
Preferred Securities, Series A (liquidation amount U.S. $25 per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.04 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of October 21, 1996, as the same
may be amended from time to time (the "Trust Agreement") including the
designation of the terms of Preferred Securities as set forth therein. The
holder of this certificate is entitled to the benefits of the Guarantee
Agreement entered into by Southwestern Public Service Company, a New Mexico
corporation, and Wilmington Trust
G-1
<PAGE>
Company, as guarantee trustee, dated as of October 21, 1996 (the "Guarantee") to
the extent provided therein. The Trust will furnish a copy of the Trust
Agreement and the Guarantee to the holder of this certificate without charge
upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
G-2
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ___ day of October, 1996.
Southwestern Public Service Capital I
By:
------------------------------------
Administrative Trustee
G-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:_______________________
Signature:_______________________________________
(Sign exactly as your name appears on the other
side of this Preferred Security Certificate)
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 12. Statement of Computation of Ratio of Earnings
Twelve Months Ended
November 30, 1996
(Dollars In Thousands)
<S> <C>
Computation of Ratio of Earnings to Fixed Charges:
Fixed charges, as defined:
Interest on long-term debt ....................................................... $ 46,801
Amortization of debt premium, discount and expense ............................... 616
Other interest ................................................................... 7,190
Estimated interest factor of rental charges ...................................... 1,245
Total fixed charges ............................................ $ 55,852
Earnings as defined:
Net earnings per statement of earnings ........................................... $ 104,073
Fixed charges as shown ........................................................... 55,852
Income taxes:
Federal-current ......................................................... 44,417
Federal-deferred ........................................................ 16,794
State ................................................................... 2,345
Investment tax credits ........................................................... (250)
Earnings available for fixed charges ............................................. $ 223,231
Ratio of earnings to fixed charges ........................................................ 4.00
Computation of Ratio of Earnings to Fixed Charges
and Preferred Dividend Requirements Combined:
Total fixed charges, as shown above ....................................................... $ 55,852
Preferred dividend requirements* .......................................................... 2,044
Total fixed charges and preferred dividend requirements combined $ 57,896
Earnings available for fixed charges and preferred dividend
requirements combined ............................................................ $ 223,231
Ratio of earnings to fixed charges and preferred dividend
requirements combined ............................................................ 3.86
*Preferred dividend requirements:
Annual preferred dividend requirement .......................... $ 1,274
Less amount deductible for income tax purposes ................. 7
Net requirement [A] .................................... $ 1,267
1 / (100% - effective tax rate) [B] ............................ 1.608
Effective tax rate ............................................. 37.8%
[A] x [B] ...................................................... $ 2,037
Add amount deductible for income tax purposes .................. 7
Preferred dividend requirements ................................ $ 2,044
</TABLE>
EXHIBIT 15.
Southwestern Public Service Company:
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited condensed
consolidated interim financial information of Southwestern Public Service
Company and subsidiaries for the periods ended November 30, 1996 and 1995, as
indicated in our report dated January 10, 1997; because we did not perform an
audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended November 30, 1996, is
incorporated by reference in Registration Statement Nos. 33-53171 and 333-05199
on Form S-3, Registration Statement No. 33-64951 on Form S-4, and Registration
Statement Nos. 33-27452 and 33-57869 on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte & Touche LLP
January 10, 1997
Dallas, Texas
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> NOV-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,658,363
<OTHER-PROPERTY-AND-INVEST> 71,401
<TOTAL-CURRENT-ASSETS> 141,939
<TOTAL-DEFERRED-CHARGES> 147,018
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,018,721
<COMMON> 40,918
<CAPITAL-SURPLUS-PAID-IN> 307,484
<RETAINED-EARNINGS> 385,682
<TOTAL-COMMON-STOCKHOLDERS-EQ> 734,084
0
0
<LONG-TERM-DEBT-NET> 720,402
<SHORT-TERM-NOTES> 53
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 15,231
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 548,951
<TOT-CAPITALIZATION-AND-LIAB> 2,018,721
<GROSS-OPERATING-REVENUE> 214,381
<INCOME-TAX-EXPENSE> 11,680
<OTHER-OPERATING-EXPENSES> 167,990
<TOTAL-OPERATING-EXPENSES> 179,670
<OPERATING-INCOME-LOSS> 34,711
<OTHER-INCOME-NET> 355
<INCOME-BEFORE-INTEREST-EXPEN> 35,066
<TOTAL-INTEREST-EXPENSE> 13,596
<NET-INCOME> 21,470
0
<EARNINGS-AVAILABLE-FOR-COMM> 21,470
<COMMON-STOCK-DIVIDENDS> 22,505
<TOTAL-INTEREST-ON-BONDS> 11,756
<CASH-FLOW-OPERATIONS> 37,980
<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0
</TABLE>
