As filed with the Securities and Exchange Commission on December 10, 1997
REGISTRATION NO. 333-41017
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NORAM ENERGY CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0511406
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1111 LOUISIANA HUGH RICE KELLY
HOUSTON, TEXAS 77002 EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND
(713) 207-3000 CORPORATE SECRETARY
(Address, including zip code, and telephone 1111 LOUISIANA
number, including area code, of registrant's HOUSTON, TEXAS 77002
principal executive offices) (713) 207-3000
(Name, address, including zip code,
and telephone number, including area code,
of agent for service)
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Copies to:
MARGO S. SCHOLIN STEVEN R. LOESHELLE
BAKER & BOTTS, L.L.P. DEWEY BALLANTINE LLP
910 LOUISIANA 1301 AVENUE OF THE AMERICAS
ONE SHELL PLAZA NEW YORK, NEW YORK 10019-6092
HOUSTON, TEXAS 77002-4995 (212) 259-8000
(713) 229-1234
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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*Information contained herein is subject to completion or amendment. A *
*registration statement relating to these securities has been filed with the *
*Securities and Exchange Commission. These securities may not be sold nor may*
*offers to buy be accepted prior to the time the registration statement *
*becomes effective. This Prospectus shall not constitute an offer to sell or *
8the solicitation of an offer to buy nor shall there be any sale of these *
*securities in any state in which such offer, solicitation or sale would be *
*unlawful prior to registration or qualification under the securities laws of *
*any such state. *
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PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 10, 1997
NORAM ENERGY CORP.
$500,000,000
DEBT SECURITIES
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NorAm Energy Corp. ("NorAm" or the "Company") may from time to time
offer debt securities consisting of bonds, debentures, notes (including notes
commonly known as medium-term notes), or other evidences of indebtedness in one
or more series at an aggregate initial offering price not to exceed $500,000,000
or its equivalent in any other currency or composite currency (the "Debt
Securities"). The Debt Securities may be offered as separate series in amounts,
at prices and on terms to be determined at the time of sale. The accompanying
Prospectus Supplement sets forth with regard to the series of Debt Securities in
respect of which this Prospectus is being delivered the title, aggregate
principal amount, denominations (which may be in United States dollars, in any
other currency or in a composite currency), maturity, rate, if any (which may be
fixed or variable), and time of payment of any interest, any terms for
redemption at the option of the Company or the holder, any terms for sinking
fund payments, any listing on a securities exchange, and the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities.
The Company may sell Debt Securities to or through one or more
underwriters or dealers, and also may sell Debt Securities directly to other
purchasers or through agents. The accompanying Prospectus Supplement sets forth
the names of any underwriters or agents involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the principal
amounts, if any, to be purchased by underwriters and the compensation, if any,
of such underwriters or agents. See "Plan of Distribution" for possible
indemnification arrangements for underwriters, agents and their controlling
persons.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1997.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBT SECURITIES OR ANY
SECURITIES THE PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON THE DEBT
SECURITIES INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS
IN SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THIS
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION" IN
THIS PROSPECTUS AND "PLAN OF DISTRIBUTION" OR "UNDERWRITING" IN THE RELEVANT
PROSPECTUS SUPPLEMENT.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, any accompanying
Prospectus Supplement or the documents incorporated or deemed incorporated by
reference herein or therein, and any information or representations not
contained herein or therein must not be relied upon as having been authorized by
NorAm or by any agent, dealer or underwriter. This Prospectus and any
accompanying Prospectus Supplement do not constitute an offer to sell or a
solicitation of an offer to buy the Debt Securities in any circumstances in
which such offer or solicitation is unlawful. The delivery of this Prospectus
or any Prospectus Supplement at any time does not imply that the information
herein or therein is correct as of any time subsequent to the date of such
information.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other information
can be inspected and copied at the public reference facilities of the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Such
material may also be accessed electronically by means of the Commission's home
page on the Internet at http://www.sec.gov. The Company's 6% Convertible
Subordinated Debentures due 2012 and NorAm Financing I's 6 1/4% Convertible
Trust Originated Preferred Securities(sm) are listed on the New York Stock
Exchange (the "NYSE"). Reports and other information concerning the Company can
be inspected and copied at the offices of the NYSE at 20 Broad Street, New York,
New York 10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and regulations of
the Commission. For further information with respect to the Company and the
Debt Securities offered hereby, reference is made to the Registration Statement
and the exhibits and the financial statements, notes and schedules filed as a
part thereof or incorporated by reference therein, which may be inspected at the
public reference facilities of the Commission at the addresses set forth above
or through the Commission's home page on the Internet. Statements made in this
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 1-13265) or by
its predecessor ("Old NorAm") (File No. 1-3751) with the Commission are
incorporated herein by reference:
(a) Old NorAm's Annual Report on Form 10-K for its fiscal year ended
December 31, 1996;
(b) Old NorAm's Quarterly Report on Form 10-Q for its quarterly period
ended March 31, 1997;
(c) the Company's Quarterly Reports on Form 10-Q for its quarterly
periods ended June 30, 1997 and September 30, 1997; and
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(d) the Company's and Old NorAm's Combined Current Report on Form 8-K
dated August 6, 1997, as amended by Form 8-K/A dated August 18, 1997.
Each document or report filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of any offering of the Debt Securities made by this Prospectus
shall be deemed to be incorporated by reference into this Prospectus and to be a
part of this Prospectus from the date of filing of such document. Any statement
contained herein, or in any document all or a portion of which is incorporated
or deemed to be incorporated by reference herein, shall be deemed to be modified
or superseded for purposes of the Registration Statement and this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Corporate
Secretary, NorAm Energy Corp., 1111 Louisiana, Houston, Texas 77002, telephone
number (713) 207-3000.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Prospectus, including the documents that
are incorporated by reference as set forth in "Incorporation of Certain
Documents by Reference," that are not historical facts are forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's beliefs as well as
assumptions made by and information currently available to management. Because
such statements are based on expectations as to future economic performance and
are not statements of fact, actual results may differ materially from those
projected. Important factors that could cause future results to differ include
(a) the effects of competition, (b) legislative and regulatory changes, (c)
fluctuations in the weather, (d) fluctuations in energy commodity prices, (e)
environmental liabilities, (f) changes in the economy and (g) other factors
discussed in this and other filings by NorAm with the Commission. When used in
NorAm's documents or oral presentations, the words "anticipate," "estimate,"
"expect," "objective," "projection," "forecast," "goal" or similar words are
intended to identify forward-looking statements.
THE COMPANY
NorAm principally conducts operations in the natural gas industry,
including gathering, transmission, marketing, storage and distribution which,
collectively, account for in excess of 90% of NorAm's total revenues, income or
loss and identifiable assets. NorAm also makes sales of electricity, non-energy
sales and provides certain non-energy services, principally to certain of its
retail gas distribution customers. NorAm is currently organized into five
operating units: (a) natural gas distribution; (b) interstate pipelines; (c)
wholesale energy marketing; (d) retail energy marketing; and (e) natural gas
gathering.
NATURAL GAS DISTRIBUTION. NorAm's natural gas distribution operations
are conducted through three divisions, Arkla, Entex and Minnegasco, which
collectively form the nation's third-largest gas distribution operation in terms
of customers served with over 400 billion cubic feet of annual throughput to
over 2.7 million customers. Through these divisions, NorAm engages in both the
sale to, and transportation of natural gas for, residential, commercial and a
limited number of industrial customers in six states: Arkansas; Louisiana;
Minnesota; Mississippi; Oklahoma; and Texas.
INTERSTATE PIPELINES. NorAm's interstate natural gas pipeline
operations are conducted principally through NorAm Gas Transmission Company
("NGT") and Mississippi River Transmission Corporation ("MRT"), two wholly owned
subsidiaries of NorAm, together with certain subsidiaries and affiliates. The
NGT system consists of approximately 6,200 miles of natural gas transmission
lines located in portions of Arkansas, Louisiana, Mississippi, Missouri, Kansas,
Oklahoma, Tennessee and Texas. The MRT system consists of approximately 2,000
miles of pipeline serving principally the greater St. Louis area in Missouri and
Illinois. Through these subsidiaries and affiliates, NorAm engages in the
transmission, sale and storage of natural gas.
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WHOLESALE ENERGY MARKETING. NorAm's wholesale energy marketing operations
principally consist of marketing natural gas and electricity and providing risk
management services to natural gas resellers and certain large volume customers.
This business is principally conducted by NorAm Energy Services, Inc., together
with certain affiliates.
RETAIL ENERGY MARKETING. NorAm's retail energy marketing operations are
principally conducted by NorAm Energy Management, Inc. and certain affiliates
("NEM"). NEM was created in 1995 to consolidate the existing unregulated retail
marketing activities of NorAm's distribution companies into one business
segment. NEM is focusing on industrial and large commercial customers.
Services offered to these customers include natural gas supply, electric power
services, management of commodity pricing risks, total energy management, and
supply and financing of gas-burning equipment, including inside-the-fence
cogeneration.
NATURAL GAS GATHERING. NorAm's natural gas gathering activities are
principally carried out by NorAm Field Services Corp. and certain affiliates
("NFS"). NFS operates approximately 3,500 miles of gathering pipelines which
collect gas from more than 200 separate systems located in major producing
fields in Oklahoma, Louisiana, Arkansas and Texas.
The principal executive offices of NorAm are located at Houston Industries
Plaza, 1111 Louisiana Street, Houston, Texas 77002, and its telephone number is
(713) 207-3000.
ACQUISITION BY HOUSTON INDUSTRIES
On August 6, 1997, pursuant to an Agreement and Plan of Merger dated as of
August 11, 1996, as amended, Old NorAm merged with and into a wholly owned
subsidiary of Houston Industries Incorporated ("Houston Industries"), thereby
becoming a wholly owned subsidiary of Houston Industries (the "Merger").
Houston Industries is a holding company with headquarters in Houston, Texas,
whose principal pre-merger operations were conducted by Houston Lighting & Power
Company, the electric utility serving a 5,000-square-mile area of the Texas Gulf
Coast, including Houston, Texas. The aggregate consideration paid to Old NorAm
stockholders in connection with the Merger consisted of $1.4 billion in cash and
47.8 million shares of Houston Industries' common stock valued at approximately
$1 billion. The overall transaction was valued at $4.0 billion, consisting of
$2.4 billion for Old NorAm's common stock and common stock equivalents and $1.6
billion of Old NorAm debt ($1.3 billion of which was long-term debt).
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratios of earnings from
continuing operations to fixed charges for each of the periods indicated:
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
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1997 1996 1996 1995 1994 1993 1992
------ ----- ---- ---- ---- ---- ----
Ratio of earnings from continuing
operations to fixed charges (1) 1.66 1.85 2.12 1.69 1.47 1.47 1.10
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(1) The Company believes that the ratios for the nine-month periods are not
necessarily indicative of the ratios for the twelve-month periods due to the
seasonal nature of the Company's business, the recording of a $13.4
million after-tax charge associated with early retirement and severance
costs to 1996 first quarter earnings and the adjustments to the Company's
financial statements resulting from the Merger as described in the Company's
Quarterly Report on Form 10-Q for its quarterly period ended September 30,
1997.
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USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement,
the Company anticipates that any net proceeds from the sale of Debt Securities
will be used for general corporate purposes, which may include, but are not
limited to, working capital, capital expenditures, acquisitions and the
repayment or refinancing of the Company's indebtedness, including the Company's
outstanding long-term public debt securities.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of
December 1, 1997 (as the same may be amended from time to time, the
"Indenture"), between the Company and Texas Commerce Bank National Association,
as Trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The Debt Securities
may be issued from time to time in one or more series. The particular terms of
each series, or of Debt Securities forming a part of a series which are offered
by a Prospectus Supplement, will be described in such Prospectus Supplement.
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject, and are qualified in their entirety by
reference, to all the provisions of the Indenture, including the definitions
therein of certain terms, and, with respect to any particular Debt Securities,
to the description of the terms thereof included in the Prospectus Supplement
relating thereto. Wherever particular Sections or defined terms of the Indenture
are referred to herein or in a Prospectus Supplement, such Sections or defined
terms are incorporated by reference herein or therein, as the case may be.
The covenants in the Indenture would not necessarily afford the
holders of the Debt Securities protection in the event of a decline in the
Company's credit quality resulting from highly leveraged or other transactions
involving the Company.
GENERAL
The Indenture provides that separate series of Debt Securities may be
issued under the Indenture from time to time without limitation as to aggregate
principal amount. The Company may specify a maximum aggregate principal amount
for the Debt Securities of any series, provided, however, such specified maximum
aggregate principal amount may be increased by resolution of the Board of
Directors of the Company. (Section 301) The Debt Securities are to have such
terms and provisions which are not inconsistent with the Indenture, including as
to maturity, principal and interest, as the Company may determine. The Debt
Securities will be unsecured obligations of the Company and will rank on a
parity with all other unsecured and unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement will set forth the price or
prices at which the Debt Securities to be offered will be issued and will
describe the following terms of such Debt Securities: (a) the title of such Debt
Securities; (b) any limit on the aggregate principal amount of the particular
series of Debt Securities; (c) the date or dates on which the principal of any
of such Debt Securities will be payable or the method by which such date or
dates will be determined or extended; (d) the rate or rates at which any of such
Debt Securities will bear interest, if any, or the method by which such rate or
rates shall be determined, the date or dates from which any such interest will
accrue, or the method by which such date or dates shall be determined, the
Interest Payment Dates on which any such interest will be payable and the
Regular Record Date, if any, for any such interest payable on any Interest
Payment Date, or the method by which such date or dates shall be determined, and
the basis upon which interest shall be calculated if other than that of a 360-
day year of twelve 30-day months; (e) the place or places where the principal of
and any premium and interest on any of such Debt Securities will be payable, the
place or places where such Debt Securities may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of such Debt Securities may be made; (f) the period
or periods within which or the date or dates on which, the price or prices at
which and the terms and conditions upon which any of such Debt Securities may be
redeemed, in whole or in part, at the option of the Company and the manner in
which any election by the Company to redeem such Debt Securities shall be
evidenced (if other than by a Board Resolution); (g) the obligation or the
right, if any, of the Company to redeem or purchase any of such Debt Securities
pursuant to any sinking fund, amortization or analogous provisions or the option
of the Holder thereof to require any such redemption or purchase, and the period
or periods within which, the price or prices at which, the currency or
currencies (including currency unit or units) in which and the other terms and
conditions on which any of such Debt Securities will be redeemed or purchased,
in whole or in part, pursuant to any such obligation; (h) the denominations in
which any of such Debt
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Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (i) if the amount of principal of or any premium or
interest on any of such Debt Securities may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts will be
determined; (j) if other than the currency of the United States of America, the
currency, currencies or currency units, including composite currencies, in which
the principal of or any premium or interest on any of such Debt Securities will
be payable (and the manner in which the equivalent of the principal amount
thereof in the currency of the United States of America is to be determined for
any purpose, including for the purpose of determining the principal amount
deemed to be Outstanding at any time); (k) if the principal of or any premium or
interest on any of such Debt Securities is to be payable, at the election of the
Company or the Holder thereof, in one or more currencies or currency units other
than those in which such Debt Securities are stated to be payable, the currency,
currencies or currency units in which payment of any such amount as to which
such election is made will be payable, the period or periods within which or the
date or dates on 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 is to
be determined); (l) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the entire principal amount
thereof, the portion of the principal amount of any of such Debt Securities
which will be payable upon declaration of acceleration of the Maturity thereof
or the method by which such portion shall be determined; (m) if the principal
amount payable at the Stated Maturity of any of such Debt Securities will not be
determinable as of any one or more dates prior to the Stated Maturity, the
amount which will be deemed to be such principal amount as of any such date for
any purpose, including the principal amount thereof which will be due and
payable upon any Maturity other than the Stated Maturity or which will be deemed
to be Outstanding as of any such date (or, in any such case, the manner in which
such deemed principal amount is to be determined); (n) any variation from the
application of the provisions of the Indenture described under "Defeasance and
Covenant Defeasance--Defeasance and Discharge" or "Defeasance and Covenant
Defeasance--Defeasance of Certain Covenants" or under both such captions and the
manner in which any election of the Company to defease such Debt Securities
shall be evidenced (if other than by a Board Resolution); (o) whether any of
such Debt Securities will initially be issuable in whole or in part in the form
of a temporary Global Security representing such Debt Securities and provisions
for the exchange of such temporary Global Security for definitive Debt
Securities; (p) whether any of such Debt Securities will be issuable in whole or
in part in the form of one or more Global Securities and, if so, the respective
Depositaries for such Global Securities, the form of any legend or legends to be
borne by any such Global Security, any circumstances under which any such Global
Security may be exchanged, in whole or in part, for Debt Securities registered,
and whether and under what circumstances any transfer of such Global Security,
in whole or in part, may be registered, in the names of Persons other than the
Depositary for such Global Security or its nominee; (q) whether any of such Debt
Securities will be subject to certain optional interest rate reset provisions;
(r) whether any of such Debt Securities will be subject to certain optional
extension of maturity provisions; (s) any addition to or change in the Events
of Default applicable to any of such Debt Securities and any change in the right
of the Trustee or the Holders of any of such Debt Securities to declare the
principal amount of any of such Debt Securities due and payable; (t) any
addition to or change in the covenants in the Indenture applicable to any of
such Debt Securities; (u) the additions or changes, if any, to the Indenture
with respect to such Debt Securities as shall be necessary to permit or
facilitate the issuance of such Debt Securities in bearer form, registrable or
not registrable as to principal, and with or without interest coupons; (v) the
appointment of any Paying Agent or Agents for such Debt Securities, if other
than Houston Industries; (w) the terms of any right to convert or exchange such
Debt Securities into any other securities or property of the Company, and the
additions or changes, if any, to the Indenture with respect to such Debt
Securities to permit or facilitate such conversion or exchange; (x) the terms
and conditions, if any, pursuant to which such Debt Securities are secured; (y)
any restriction or condition on the transferability of such Debt Securities; and
(z) any other terms of such Debt Securities not inconsistent with the provisions
of the Indenture. (Section 301)
Debt Securities, including Original Issue Discount Securities, may be
sold at a substantial discount below their principal amount. Certain special
United States income tax considerations (if any) applicable to Debt Securities
sold at an original issue discount may be described in the applicable Prospectus
Supplement. In addition, certain special United States federal income tax or
other considerations (if any) applicable to any Debt Securities which are
denominated in a currency or currency unit other than United States dollars may
be described in the applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issuable only in registered
form, without coupons, and, unless otherwise specified in the applicable
Prospectus Supplement, only in denominations of $1,000 and integral multiples
thereof. (Section 302)
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At the option of the Holder, subject to the terms of the Indenture and
the limitations applicable to Global Securities, Debt Securities of each series
will be exchangeable for other Debt Securities of the same series, of any
authorized denomination and of a like tenor and aggregate principal amount.
(Section 305)
Subject to the terms of the Indenture and the limitations applicable
to Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security Registrar
or at the office of any transfer agent designated by the Company for such
purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. Any transfer agent (in
addition to the Security Registrar) initially designated by the Company for any
Debt Securities will be named in the applicable Prospectus Supplement. (Section
305) The Company may at any time designate additional transfer agents or rescind
the designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that the Company will be required to
maintain a transfer agent in each Place of Payment for the Debt Securities of
each series. (Sections 305 and 1002)
Neither the Trustee nor the Company will be required to (a) issue,
register the transfer of or exchange any Debt Security of any series (or of any
series and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of mailing of a notice of redemption
of any such Debt Security that may be selected for redemption and ending at the
close of business on the day of such mailing, or (b) register the transfer of or
exchange any Debt Security so selected for redemption, in whole or in part,
except, in the case of any such Debt Security to be redeemed in part, any
portion not to be redeemed. (Section 305)
GLOBAL SECURITIES
Unless otherwise provided in the Prospectus Supplement, some or all of
the Debt Securities of any series may be represented, in whole or in part, by
one or more Global Securities which will have an aggregate principal amount
equal to that of the Debt Securities represented thereby. Unless otherwise
provided in the Prospectus Supplement, the Global Security representing Debt
Securities will be deposited with, or on behalf of, The Depository Trust Company
("DTC"), or other successor depository appointed by the Company (DTC or such
other depository is herein referred to as the "Depositary") and registered in
the name of the Depositary or its nominee and such Global Security will bear a
legend regarding the restrictions on exchange and registration of transfer
thereof referred to below and any such other matters as may be provided for
pursuant to the Indenture. Unless otherwise provided in the Prospectus
Supplement, Debt Securities will not be issued in definitive form.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be exchanged, in whole or in part, for
Debt 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 any nominee of such Depositary unless (a) the Depositary
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or has ceased to be qualified to act as such
as required by the Indenture, (b) there shall have occurred and be continuing an
Event of Default with respect to the Debt Securities represented by such Global
Security, (c) the Company in its sole discretion determines that such Global
Security will be so exchangeable or transferable, or (d) there shall exist such
circumstances, if any, in addition to or in lieu of those described above as may
be described in the applicable Prospectus Supplement. All Debt Securities
issued in exchange for a Global Security or any portion thereof will be
registered in such names as the Depositary may direct. (Sections 204 and 305)
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of
Direct Participants and by the New York Stock Exchange, Inc., the American
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Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to DTC's book-entry system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Upon the issuance by the Company of Debt Securities represented by a
Global Security, purchases of Debt Securities under the DTC System must be made
by or through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser of
each Debt Security ("Beneficial Owner") is in turn to be recorded on the Direct
and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Debt Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Debt Securities, except in the event that use of the book-entry
system for the Debt Securities is discontinued. The laws of some states require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for the Global Security, or its nominee, is
the registered owner of the Global Security, the Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as described above, Beneficial Owners will not be entitled to
have Debt Securities represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the owners or holders
thereof under the Indenture.
To facilitate subsequent transfers, all Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debt Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Debt
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers. Conveyance of notices and other communications by
DTC to Direct Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Debt
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Debt Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Payments of principal of and interest, if any, on the Debt Securities
represented by the Global Security registered in the name of the Depositary or
its nominee will be made by the Company through the Trustee under the Indenture
or a paying agent (the "Paying Agent"), which may also be the Trustee under the
Indenture, to the Depositary or its nominee, as the case may be, as the
registered owner of the Global Security. Neither the Company, the Trustee, nor
the Paying Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised that DTC will credit Direct Participants'
accounts on the payable date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not receive
payment on the payable date. Payments by Participants to Beneficial Owners will
be governed by standing instructions and customary practices, as in the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participant and not of
DTC, the Paying Agent, or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and
interest to DTC is the responsibility of the Company or the Paying Agent,
disbursement of such payments to Direct Participants shall be the responsibility
of DTC, and disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
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The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on a Debt Security on any Interest Payment Date will be made
to the Person in whose name such Debt Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of such Debt Securities, except that, unless
otherwise provided in such Debt Securities, interest payable on the Stated
Maturity of the principal of a Debt Security shall be paid to the Person to whom
principal is paid. The initial payment of interest on any Debt Security of any
series which is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Debt Security. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time, except that at the
option of the Company payment of any interest may be made (a) by check mailed to
the address of the Person entitled thereto as such address appears in the
Security Register, or (b) by wire transfer in immediately available funds at
such place and to such account as designated in writing by the Person entitled
thereto as specified in the Security Register. Unless otherwise indicated in the
applicable Prospectus Supplement, Houston Industries, the Company's parent
company, will be designated as the Company's sole Paying Agent for payments with
respect to Debt Securities of each series. Any other Paying Agents initially
designated by the Company for the Debt Securities of a particular series will be
named in the applicable Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent, except that the Company at all times will be required to maintain a
Paying Agent in each Place of Payment for the Debt Securities of a particular
series. (Sections 307 and 1002)
Any money deposited by the Company with the Trustee or any Paying
Agent for the payment of the principal of or any premium or interest on any Debt
Security which remains unclaimed at the end of two years after such principal,
premium or interest has become due and payable may be repaid to the Company at
the Company's request and the Holder of such Debt Security will 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, will thereupon
cease. (Section 1003)
COVENANTS
The applicable Prospectus Supplement will set forth any restrictive
covenants applicable with respect to any series of Debt Securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person ("Successor Person"), and may not permit any Person to consolidate with
or merge into, or convey, transfer or lease its properties and assets
substantially as an entirety to, the Company, unless (a) the Successor Person
(if any) is a corporation, partnership, trust or other entity organized and
validly existing under the laws of any domestic jurisdiction and assumes the
Company's obligations on the Debt Securities and under the Indenture, (b)
immediately after giving effect to the 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 occurred and be continuing and (c) the Company has delivered
to the Trustee the certificates and opinions required under the Indenture.
(Section 801)
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of that series when due; (b)
failure to pay any interest on any Debt Securities of that series when due,
continued for 30 days; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) failure to perform, or
breach in any material respect of, any other covenant or
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warranty of the Company in the Indenture with respect to Debt Securities of that
series (other than a covenant or warranty included in the Indenture solely for
the benefit of a series other than that series), continued for 90 days after
written notice has been given to the Company by the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Securities of that series, as
provided in the Indenture; (e) certain events involving bankruptcy, insolvency
or reorganization; and (f) any other Event of Default provided with respect to
Debt Securities of that series; provided, however, that no event described in
clause (d), (e) or (f) above shall constitute an Event of Default until an
officer of the Trustee, assigned to and working in the Trustee's corporate trust
department has actual knowledge thereof or until a written notice of any such
event is received by the Trustee at its Corporate Trust Office, and such notice
refers to the Debt Securities generally, the Company or the Indenture.
(Section 501)
Notwithstanding the foregoing provisions, if the principal or any
premium or interest on any Debt Security is payable in a currency other than the
currency of the United States of America and such currency is not available to
the Company for making payment thereof due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to Holders of the Debt Securities by
making such payment in the currency of the United States of America in an amount
equal to the currency of the United States of America equivalent of the amount
payable in such other currency, as determined by the Trustee by reference to the
noon buying rate in The City of New York for cable transfers for such currency
("Exchange Rate"), as such Exchange Rate is reported or otherwise made
available by the Federal Reserve Bank of New York on the date of such payment,
or, if such rate is not then available, on the basis of the most recently
available Exchange Rate. Notwithstanding the foregoing, any payment made under
such circumstances in the currency of the United States of America where the
required payment is in a currency other than the currency of the United States
of America will not constitute an Event of Default under the Indenture.
(Section 501)
If an Event of Default (other than an Event of Default described in
clause (d) above or another Event of Default specified in clause (f) above that
is applicable to all Outstanding Debt Securities, or an Event of Default
specified in clause (e) above) with respect to the Debt Securities of any series
at the time Outstanding shall occur and be continuing, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Indenture may declare the
principal amount of the Debt Securities of that series (or, in the case of any
Debt Security that is an Original Issue Discount Security, such portion of the
principal amount of such Debt Security, as may be specified in the terms of such
Debt Security) to be due and payable immediately, and upon any such declaration
such principal amount shall become immediately due and payable. If an Event of
Default described in clause (d) above or another Event of Default specified in
clause (f) above that is applicable to all Outstanding Debt Securities shall
occur and be continuing, or an Event of Default specified in clause (e) above
shall occur and be continuing, either the Trustee or the Holders of at least 25%
in aggregate principal amount of all the Debt Securities then Outstanding
(treated as one class) by notice as provided in the Indenture may declare the
principal amount (or, if any Debt Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms thereof) of all the Debt Securities then Outstanding to be due and payable
immediately, and upon any such declaration such principal amount shall become
immediately due and payable. After any such acceleration of a series, but before
a judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal (or other
specified amount), have been cured or waived as provided in the Indenture.
(Section 502) For information as to waiver of defaults, see "Modification and
Waiver" below.
Subject to the provisions of the Indenture relating to the duties of
the Trustee, in case an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. (Section
603) Subject to such provisions for the indemnification of the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of that series, provided that, (a) such direction shall not be in
conflict with any rule of law or the Indenture, (b) the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction, and (c) subject to the provisions of the Indenture relating to the
duties of the Trustee, the Trustee will have the right to decline to follow such
direction if an officer of the Trustee determines, in good faith, that the
proceeding so directed would involve the Trustee in personal liability or would
otherwise be contrary to applicable law. (Section 512)
No Holder of a Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture, or for the appointment
of a receiver, assignee, trustee, liquidator or sequestrator (or other similar
official), or for any other remedy thereunder, unless (a) such Holder has
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Debt Securities of that series, (b) the Holders of at least
25% in aggregate principal amount of the Outstanding Debt Securities of that
series have made written request to the Trustee, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding and
(c) the Trustee has failed to institute such proceeding, and has not received
from the Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of that series a direction inconsistent with such request,
within 60 days after such notice, request and offer. (Section 507) However,
such limitations do not apply to a suit instituted by a Holder of a Debt
Security for the enforcement of payment of the principal of or any premium or
interest on such Debt Security on or after the applicable due date specified in
such Debt Security. (Section 508)
The Company will be required to furnish to the Trustee annually a
statement by certain of its officers as to whether or not the Company, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions, covenants and conditions of the Indenture and, if so, specifying all
such known defaults. (Section 1004)
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MODIFICATION AND WAIVER
The Indenture contains provisions permitting the Company and the
Trustee to enter into one or more supplemental indentures without the consent of
the holders of any of the Debt Securities in order (a) to evidence the
succession of another corporation to the Company, or successive successions and
the assumption of the covenants, agreements and obligations of the Company by a
successor to the Company; (b) to add to the covenants of the Company for the
benefit of the Holders or surrender any right or power of the Company; (c) to
add additional Events of Default with respect to any series of Debt Securities;
(d) to add or change any provisions of the Indenture to such extent as necessary
to facilitate the issuance of Debt Securities in bearer form; (e) to add to,
change or eliminate any provision of the Indenture in respect of one or more
series of Debt Securities, provided that if such action adversely affects the
interests of any Holders of Debt Securities of any series, such addition, change
or elimination will become effective with respect to such series only when no
Security of such series remains Outstanding; (f) to convey, transfer, assign,
mortgage or pledge any property to or with the Trustee or to surrender any right
or power herein conferred upon the Company; (g) to establish the form or terms
of Debt Securities; (h) to provide for uncertificated securities in addition to
certificated securities; (i) to evidence and provide for successor Trustees or
to add or change any provisions to such extent as necessary to permit or
facilitate the appointment of a separate Trustee or Trustees for specific series
of Debt Securities; (j) to cure any ambiguity, to correct any defect or
supplement any inconsistent provisions or to make any other provisions with
respect to matters or questions arising under the Indenture, provided that such
action does not adversely affect the interests of the Holders of Debt Securities
of any series; (k) to supplement any provisions of the Indenture necessary to
permit or facilitate the defeasance and discharge of any series of Debt
Securities, provided that such action does not adversely affect the interests of
the Holders of Debt Securities of such series or any other series; (l) to comply
with the rules or regulations of any securities exchange or automated quotation
system on which any of the Debt Securities may be listed or traded; or (m) to
add, change or eliminate any provisions of the Indenture as is necessary or
desirable in accordance with any amendments to the Trust Indenture Act, provided
that such action does not adversely affect the rights or interests of any Holder
of Debt Securities. (Section 901)
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental indenture (treated as one class), to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indenture or modifying the rights of the Holders of
Debt Securities of such series, except that no such supplemental indenture may,
without the consent of the Holder of each Outstanding Debt Security so affected,
(a) except to the extent permitted pursuant to the Indenture, change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Debt Security, (b) reduce the principal amount of, or any premium or
interest on, any Debt Security, (c) reduce the amount of principal of an
Original Issue Discount Security or any other Debt Security payable upon
acceleration of the Maturity thereof, (d) change the place or currency of
payment of principal of, or any premium or interest on, any Debt Security, (e)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security, (f) reduce the percentage in principal amount of
Outstanding Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture, (g) reduce the
percentage in principal amount of Outstanding Debt Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults, (h) make certain modifications to such
provisions with respect to modification and waiver, (i) with respect to any
series of Debt Securities that are convertible or exchangeable into any other
securities or property of the Company, make any change that adversely affects
the right to convert or exchange any such Debt Security or decrease the
conversion or exchange rate or increase the conversion price of any such Debt
Security, or (j) with respect to any series of Debt Securities that are secured,
change the terms and conditions pursuant to which such Debt Securities are
secured in a manner adverse to the Holders of such Debt Securities. (Section
902)
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Debt Securities of any series may waive any past default or
compliance with certain restrictive provisions under the Indenture, except a
default in the payment of principal, premium or interest and certain covenants
and provisions of the Indenture which cannot be amended without the consent of
the Holder of each Outstanding Debt Security of such series affected. (Sections
513 and 1006)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the Indenture
as of any date, (a) the principal amount of an Original Issue Discount Security
that will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (b) if, as of such date, the principal amount
payable at the Stated Maturity of a Debt Security is not determinable (for
example, because
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it is based on an index), the principal amount of such Debt Security deemed to
be Outstanding as of such date will be an amount determined in the manner
prescribed for such Debt Security, (c) the principal amount of a Debt Security
denominated in one or more foreign currencies or currency units that will be
deemed to be Outstanding will be the U.S. dollar equivalent, determined as of
such date in the manner prescribed for such Debt Security, of the principal
amount of such Debt Security (or, in the case of a Debt Security described in
clause (a) or (b) above, of the amount described in such clause) and (d) Debt
Securities owned by the Company or any other obligor upon the Debt Securities or
any of their Affiliates will be disregarded and deemed not to be Outstanding.
Certain Debt Securities, including those for whose payment or redemption money
has been deposited or set aside in trust for the Holders and those that have
been fully defeased pursuant to Section 1402, will not be deemed to be
Outstanding. (Section 101)
Except in certain limited circumstances, the Company will be entitled
to set any day as a record date for the purpose of determining the Holders of
Outstanding Debt securities of any series entitled to give or take any
direction, notice, consent, waiver or other action under the Indenture, in the
manner and subject to the limitations provided in the Indenture. In certain
limited circumstances, the Trustee will be entitled to set a record date for
action by Holders. If a record date is set for any action to be taken by
Holders of a particular series, such action may be taken only by persons who are
Holders of Outstanding Debt Securities of that series on the record date. To be
effective, such action must be taken by Holders of the requisite principal
amount of such Debt Securities within a specified period following the record
date. For any particular record date, this period will be 180 days or such
shorter period as may be specified by the Company (or the Trustee, if it set the
record date) and may be shortened or lengthened (but not beyond 180 days) from
time to time. (Section 104)
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided in the applicable Prospectus Supplement, the
provisions of Section 1402, relating to defeasance and discharge of
indebtedness, or Section 1403, relating to defeasance of certain restrictive
covenants, in the Indenture, shall apply to the Debt Securities of any series or
to any specified part of a series. (Section 1401)
DEFEASANCE AND DISCHARGE. Section 1402 of the Indenture provides that
the Company will be discharged from all its obligations with respect to such
Debt Securities (except for certain obligations to exchange or register the
transfer of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and to hold moneys for payment in trust)
upon the deposit in trust for the benefit of the Holders of such Debt Securities
of money or U.S. Government Obligations, or both, which, through the payment of
principal and interest in respect thereof in accordance with their terms, will
provide money in an amount sufficient to pay the principal of and any premium
and interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the Indenture and such Debt Securities. Such
defeasance or discharge may occur only if, among other things, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the Company
has received from, or there has been published by, the United States Internal
Revenue Service a ruling, or there has been a change in tax law, in either case
to the effect that Holders of such Debt Securities will not recognize gain or
loss for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such deposit,
defeasance and discharge were not to occur. (Sections 1402 and 1404)
DEFEASANCE OF CERTAIN COVENANTS. Section 1403 of the Indenture
provides that, in certain circumstances, the Company may omit to comply with
certain restrictive covenants, including any that may be described in the
applicable Prospectus Supplement, and that in those circumstances the occurrence
of certain Events of Default, which are described above in clause (d) (with
respect to such restrictive covenants) under "Events of Default" and any that
may be described in the applicable Prospectus Supplement, will be deemed not to
be or result in an Event of Default, in each case with respect to such Debt
Securities. The Company, in order to exercise such option, will be required to
deposit, in trust for the benefit of the Holders of such Debt Securities, money
or U.S. Government Obligations, or both, which, through the payment of principal
and interest in respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of and any premium and
interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the Indenture and such Debt Securities. The
Company will also be required, among other things, to deliver to the Trustee an
opinion of Counsel to the effect that Holders of such Debt Securities will not
recognize gain or loss for federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit and defeasance were not to occur. In the
event the Company exercised this option with respect to any Debt Securities and
such Debt Securities were declared due and payable
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because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations so deposited in trust would be sufficient to pay amounts
due on such Debt Securities at the time of their respective Stated Maturities,
but might not be sufficient to pay amounts due on such Debt Securities upon any
acceleration resulting from such Event of Default. In such case, the Company
would remain liable for such payments. (Sections 1403 and 1404)
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register.
(Sections 101 and 106)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name a Debt Security is registered on the
applicable record date as the owner thereof (whether or not such Debt Security
may be overdue) for the purpose of making payment and for all other purposes.
(Section 309)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York without regard
to conflicts of laws principles thereof. (Section 112)
REGARDING THE TRUSTEE
The Trustee serves as trustee for (i) Houston Industries', the
Company's parent company, first mortgage bonds aggregating $2.5 billion, (ii)
Houston Industries' collateralized medium-term notes which are secured as to
payment of principal, interest and premium, if any, by Houston Industries' first
mortgage bonds and (iii) pollution control bonds previously issued on behalf of
Houston Industries aggregating $927.9 million, a portion of which is
collateralized by Houston Industries' first mortgage bonds. Houston Industries
maintains depositary and other normal banking relationships with the Trustee.
The Chase Manhattan Bank ("Chase"), a subsidiary of the Chase
Manhattan Corporation, the sole indirect shareholder of the Trustee, is a party
to credit agreements under which Houston Industries and its affiliates have bank
lines of credit. Houston Industries and certain of its subsidiaries maintain
depository and other normal banking, investment banking and trust relationships
with Chase and certain subsidiaries of Chase. Mr. Don D. Jordan, Chairman and
Chief Executive Officer of the Company and Houston Industries, serves on the
Trustee's Advisory Board of Directors and Mr. R. Steve Letbetter, President and
Chief Operating Officer of Houston Industries, serves on the Trustee's Houston
Regional Advisory Board of Directors.
The Trustee will be renamed Chase Bank of Texas, National Association
in January 1998.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (a) through an underwriter or
underwriters, (b) through dealers, (c) through agents, (d) directly to
purchasers, including affiliates of the Company, or (e) through a combination of
any such methods of sale. The applicable Prospectus Supplement will set forth
the terms of the offerings of any Debt Securities, including the method of
distribution, the name or names of any underwriters, dealers or agents, any
managing underwriter or underwriters, the purchase price of the Debt Securities
and the proceeds to the Company from the sale, any underwriting discounts,
agency fees and other items constituting underwriters' compensation and any
discounts and concessions allowed, reallowed or paid to dealers or agents. Any
initial public offering price and any discount or concessions allowed or
reallowed to dealers may be changed from time to time. The expected time of
delivery of the Debt Securities in respect of which this Prospectus is delivered
will be set forth in the applicable Prospectus Supplement.
If underwriters are used in the sale of the Debt Securities, the
underwriting agreement will provide that the obligations of the underwriters are
subject to certain conditions precedent and that the underwriters with respect
to a sale of Debt Securities will be obligated to purchase all such Debt
Securities if any are purchased. In connection with the sale of Debt
Securities,
-13-
underwriters may receive compensation from the Company or from purchasers of
Debt Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters may sell Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents.
If a dealer is utilized in the sale of the Debt Securities in respect
of which this Prospectus is delivered, the Company will sell such Debt
Securities to the dealer as principal. The dealer may then resell such Debt
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act, of the Debt Securities so offered and
sold. The name of the dealer and the terms of the transaction will be set forth
in the Prospectus Supplement relating thereto.
Underwriters, agents or dealers participating in the distribution of
Debt Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Debt Securities may be deemed to be underwriting discounts and commissions under
the Securities Act.
The Debt Securities may be sold in one or more transactions either at
a fixed price or prices which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company may also offer and sell the Debt Securities in
exchange for one or more of its outstanding issues of debt or convertible debt
securities or in the satisfaction of indebtedness.
Underwriters, agents or dealers who participate in the distribution of
Debt Securities may be entitled, under agreements which may be entered into with
the Company, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to contribution by the
Company to payments that such underwriters, dealers or agents or any of their
controlling persons may be required to make in respect thereof. Underwriters,
agents or dealers may be customers of, engage in transactions with or perform
services for the Company or affiliates of the Company in the ordinary course of
business.
Each series of Debt Securities will be a new issue with no established
trading market. The Company may elect to list any series of Debt Securities on
an exchange, but the Company shall not be obligated to do so. It is possible
that one or more underwriters may make a market in a series of Debt Securities,
but will not be obliged to do so and may discontinue any market making at any
time without notice. Therefore, no assurance can be given as to the liquidity
of the trading market for the Debt Securities.
In connection with the offering, the underwriters or agents, as the
case may be, may purchase and sell the Debt Securities in the open market.
These transactions may include over-allotment and stabilizing transactions and
purchases to cover syndicate short positions created in connection with the
offering. Stabilizing transactions consist of certain bids or purchases for the
purpose of preventing or retarding a decline in the market price of the Debt
Securities; and syndicate short positions involve the sale by the underwriters
or agents, as the case may be, of a greater number of Debt Securities than they
are required to purchase from the Company in the offering. The underwriters
also may impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker dealers in respect of the Debt Securities sold in the
offering for their account may be reclaimed by the syndicate if such Debt
Securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Debt Securities, which may be higher than the price that
might otherwise prevail in the open market, and these activities, if commenced,
may be discontinued at any time. These transactions may be effected on the
NYSE, in the over-the-counter market or otherwise.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters, dealers and agents to solicit offers by certain
institutions to purchase Debt Securities from the Company pursuant to delayed
delivery contracts providing for payment and delivery on the date stated in the
Prospectus Supplement. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement. The Prospectus Supplement will also set
forth the commission payable for solicitation of such contracts.
Offers to purchase Debt Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating thereto. Except
as set forth in the applicable Prospectus Supplement, no director, officer or
employee of the Company will solicit
-14-
or receive a commission in connection with direct sales by the Company of the
Debt Securities, although such persons may respond to inquiries by potential
purchasers and perform ministerial and clerical work in connection with any such
direct sales.
Debt Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company. Any remarketing firm will be identified
and the terms of its agreement, if any, with the Company and its compensation
will be described in the Prospectus Supplement. Remarketing firms may be deemed
to be underwriters, as such term is defined in the Securities Act, in connection
with the Debt Securities remarketed thereby. Remarketing firms may be entitled
under agreements which may be entered into with the Company to indemnification
or contribution by the Company against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course of
business.
EXPERTS
The consolidated balance sheet of Old NorAm as of December 31, 1996
and 1995 and the consolidated statements of income, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1996,
incorporated by reference in this Prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement,
the validity of the Debt Securities will be passed upon for the Company by Baker
& Botts, L.L.P., Houston, Texas. Certain legal matters will be passed upon for
the Company by Hugh Rice Kelly, Esq., Executive Vice President, General Counsel
and Corporate Secretary of the Company, and for the underwriters, dealers, or
agents, if any, by Dewey Ballantine LLP, New York, New York. James A. Baker,
III, a senior partner in the law firm of Baker & Botts, L.L.P., is currently a
director of Houston Industries, the Company's sole stockholder, and beneficial
owner of 1,500 shares of Houston Industries' common stock.
-15-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses in connection with the offering
described in this Registration Statement will be as follows:
Securities and Exchange Commission filing fee..... $151,515
Blue Sky fees and expenses........................ 20,000
Attorney's fees and expenses...................... 100,000
Independent Auditor's fees and expenses........... 15,000
Printing and engraving expenses................... 15,000
Rating Agency fees................................ 115,000
Trustee's fees and expenses....................... 3,000
Miscellaneous expenses............................ 30,485
--------
Total......................................... $450,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware (the "DGCL") gives
corporations the power to indemnify officers and directors under certain
circumstances.
Article V of the Company's By-Laws provides for indemnification of officers
and directors to the extent permitted by the DGCL. The Company also has
policies insuring its officers and directors against certain liabilities for
action taken in such capacities, including liabilities under the Securities
Act.
Article Ninth of the Company's Certificate of Incorporation adopted the
provision of Delaware law limiting or eliminating the potential monetary
liability of directors to the Company or its stockholders for breaches of a
director's fiduciary duty of care. However, the provision does not limit or
eliminate the liability of a director for disloyalty to the Company or its
stockholders, failing to act in good faith, engaging in intentional misconduct
or a knowing violation of the law, obtaining an improper personal benefit or
paying a dividend or approving a stock repurchase that was illegal under section
174 of the DGCL.
Article Ninth also provides that if the DGCL is subsequently amended to
authorize further limitation or elimination of the liability of directors, such
subsequent limitation or elimination of director's liability will be
automatically implemented without further stockholder action. Furthermore,
repeal or modification of the terms of the Article Ninth will not adversely
affect any right or protection of a director existing at the time of such repeal
or modification.
Any agents, dealers or underwriters who execute any of the Agreements filed
as Exhibit 1 to this Registration Statement will agree to indemnify the
Company's directors and their officers who signed the Registration Statement
against certain liabilities that may arise under the Securities Act with respect
to information furnished to NorAm by or on behalf of any such indemnifying
party.
See "Item 17. Undertakings" for a description of the Commission's position
regarding such indemnification provisions.
ITEM 16. EXHIBITS.
See Index to Exhibits at page II-4.
II-1
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, NORAM ENERGY
CORP. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON DECEMBER 9,
1997.
NORAM ENERGY CORP.
(Registrant)
By: /s/ Don D. Jordan
------------------
(Don D. Jordan,
Chairman and Chief
Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
--------- ----- ----
/s/ Don D. Jordan Chairman and Chief Executive December 9, 1997
-------------- Officer
(Don D. Jordan) (Principal Executive Officer)
/s/ Stephen W. Naeve Executive Vice President December 9, 1997
------------------- and Sole Director
(Stephen W. Naeve) (Principal Financial Officer)
/s/ Mary P. Ricciardello Vice President and Comptroller December 9, 1997
--------------------- (Principal Accounting Officer)
(Mary P. Ricciardello)
II-3
INDEX TO EXHIBITS
-----------------
SEC File or
Exhibit Report or Registration Exhibit
Number Document Description Registration Statement Number Reference
- ------- --------------------------------------------- ---------------------- ------------- ----------
1* Form of Underwriting Agreement
2.1** Agreement and Plan of Merger, among Houston Form 10-K of Old 1-3751 2.1
Industries, Houston Lighting & Power Company NorAm for the year
("HL&P"), HI Merger, Inc. ("Merger Sub") and ended December 31,
Old NorAm dated as of August 11, 1996, as 1996
amended by Amendment to Agreement and Plan of
Merger dated as of October 23, 1996
2.2*** Agreement dated August 5, 1997 among Houston
Industries, HL&P, Merger Sub and Old NorAm
4.1 Form of Indenture governing the Debt Securities
between the Company and Texas Commerce Bank
National Association, as Trustee
4.2 Form of Debt Security (included in Exhibit 4.1)
5 Opinion of Baker & Botts, L.L.P.
12 Statement regarding Computation of Ratios
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Baker & Botts, L.L.P. (included in
Exhibit 5)
25*** Statement of Eligibility of Trustee on Form T-1
- ----------------
* To be filed by amendment or by a report on Form 8-K pursuant to
Regulation S-K, Item 601(b).
** Incorporated herein by reference as indicated.
*** Previously filed.
II-4
Exhibit 4.1
=======================================================================
NORAM ENERGY CORP.
To
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
Trustee
_______________
INDENTURE
Dated as of December 1, 1997
_______________
=======================================================================
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION(S)
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
(b) ............................................... 702
(c) ............................................... 702
Section 313(a) ............................................... 703
(b) ............................................... 703
(c) ............................................... 703
(d) ............................................... 703
Section 314(a) ............................................... 704
(a)(4) ............................................... 101, 1004
(b) ............................................... Not Applicable
(c)(1) ............................................... 102
(c)(2) ............................................... 102
(c)(3) ............................................... Not Applicable
(d) ............................................... Not Applicable
(e) ............................................... 102
Section 315(a) ............................................... 601
(b) ............................................... 602
(c) ............................................... 601
(d) ............................................... 601
(e) ............................................... 514
_______________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TRUST INDENTURE
ACT SECTION INDENTURE SECTION(S)
Section 316(a) ............................................. 101
(a)(1)(A) ............................................. 502, 512
(a)(1)(B) ............................................. 513
(a)(2) ............................................. Not Applicable
(b) ............................................. 508
(c) ............................................. 104
Section 317(a)(1) ............................................. 503
(a)(2) ............................................. 504
(b) ............................................. 1003
Section 318(a) ............................................. 107
_______________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION..........................................1
SECTION 101. Definitions.....................................................1
"Act"...........................................................................2
"Affiliate".....................................................................2
"Authenticating Agent"..........................................................2
"Board of Directors"............................................................2
"Board Resolution"..............................................................2
"Business Day"..................................................................2
"Commission"....................................................................2
"Company".......................................................................2
"Company Request" or "Company Order"............................................3
"Corporate Trust Office"........................................................3
"corporation"...................................................................3
"Covenant Defeasance"...........................................................3
"Defaulted Interest"............................................................3
"Defeasance"....................................................................3
"Depositary"....................................................................3
"Event of Default"..............................................................3
"Exchange Act"..................................................................3
"Exchange Rate".................................................................3
"Expiration Date"...............................................................3
"Extension Notice"..............................................................3
"Extension Period"..............................................................3
"Final Maturity"................................................................3
"Global Security"...............................................................3
"Holder"........................................................................4
"Houston Industries"............................................................4
"Indenture".....................................................................4
"interest"......................................................................4
"Interest Payment Date".........................................................4
"Investment Company Act"........................................................4
"Maturity"......................................................................4
"Maximum Interest Rate".........................................................4
"Notice of Default".............................................................4
"Officers' Certificate".........................................................4
"Opinion of Counsel"............................................................4
"Optional Reset Date"...........................................................4
"Original Issue Discount Security"..............................................5
"Original Stated Maturity"......................................................5
-i-
"Outstanding"...................................................................5
"Paying Agent"..................................................................6
"Person"........................................................................6
"Place of Payment"..............................................................6
"Predecessor Security"..........................................................6
"Redemption Date"...............................................................6
"Redemption Price"..............................................................6
"Regular Record Date"...........................................................6
"Repayment Date"................................................................6
"Reset Notice"..................................................................6
"Responsible Officer"...........................................................6
"Securities"....................................................................7
"Securities Act"................................................................7
"Security Register" and "Security Registrar"....................................7
"Special Record Date"...........................................................7
"Stated Maturity"...............................................................7
"Subsequent Interest Period"....................................................7
"Subsidiary"....................................................................7
"Trust Indenture Act"...........................................................7
"Trustee".......................................................................7
"U.S. Government Obligation"....................................................7
"Vice President"................................................................8
"Yield to Maturity".............................................................8
SECTION 102. Compliance Certificates and Opinions............................8
SECTION 103. Form of Documents Delivered to Trustee..........................8
SECTION 104. Acts of Holders; Record Dates...................................9
SECTION 105. Notices, Etc., to Trustee and Company..........................11
SECTION 106. Notice to Holders; Waiver......................................11
SECTION 107. Conflict with Trust Indenture Act..............................12
SECTION 108. Effect of Headings and Table of Contents.......................12
SECTION 109. Successors and Assigns.........................................12
SECTION 110. Separability Clause............................................12
SECTION 111. Benefits of Indenture..........................................12
SECTION 112. Governing Law..................................................12
SECTION 113. Legal Holidays.................................................13
ARTICLE TWO SECURITY FORMS.................................................13
SECTION 201. Forms Generally................................................13
SECTION 202. Form of Face of Security.......................................13
SECTION 203. Form of Reverse of Security....................................16
SECTION 204. Form of Legend for Global Securities...........................22
SECTION 205. Form of Trustee's Certificate of Authentication................22
-ii-
ARTICLE THREE THE SECURITIES.................................................22
SECTION 301. Amount Unlimited; Issuable in Series...........................23
SECTION 302. Denominations..................................................26
SECTION 303. Execution, Authentication, Delivery and Dating.................26
SECTION 304. Temporary Securities...........................................28
SECTION 305. Registration, Registration of Transfer and Exchange............28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities...............30
SECTION 307. Payment of Interest; Interest Rights Preserved;
Optional Interest Reset........................................31
SECTION 308. Optional Extension of Maturity.................................34
SECTION 309. Persons Deemed Owners..........................................35
SECTION 310. Cancellation...................................................35
SECTION 311. Computation of Interest; Usury Not Intended....................35
SECTION 312. CUSIP Numbers..................................................36
ARTICLE FOUR SATISFACTION AND DISCHARGE.....................................36
SECTION 401. Satisfaction and Discharge of Indenture........................36
SECTION 402. Application of Trust Money.....................................38
ARTICLE FIVE REMEDIES.......................................................38
SECTION 501. Events of Default..............................................38
SECTION 502. Acceleration of Maturity; Rescission and Annulment.............40
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.........................................41
SECTION 504. Trustee May File Proofs of Claim...............................41
SECTION 505. Trustee May Enforce Claims Without Possession of Securities....42
SECTION 506. Application of Money Collected.................................42
SECTION 507. Limitation on Suits............................................43
SECTION 508. Unconditional Right of Holders to Receive Principal
Premium and Interest...........................................43
SECTION 509. Restoration of Rights and Remedies.............................44
SECTION 510. Rights and Remedies Cumulative.................................44
SECTION 511. Delay or Omission Not Waiver...................................44
SECTION 512. Control by Holders.............................................44
SECTION 513. Waiver of Past Defaults........................................45
SECTION 514. Undertaking for Costs..........................................45
SECTION 515. Waiver of Usury, Stay or Extension Laws........................45
ARTICLE SIX THE TRUSTEE....................................................46
SECTION 601. Certain Duties and Responsibilities............................46
SECTION 602. Notice of Defaults.............................................46
SECTION 603. Certain Rights of Trustee......................................46
SECTION 604. Not Responsible for Recitals or Issuance of Securities.........48
SECTION 605. May Hold Securities............................................48
-iii-
SECTION 606. Money Held in Trust............................................48
SECTION 607. Compensation and Reimbursement.................................48
SECTION 608. Conflicting Interests..........................................49
SECTION 609. Corporate Trustee Required; Eligibility........................49
SECTION 610. Resignation and Removal; Appointment of Successor..............49
SECTION 611. Acceptance of Appointment by Successor.........................51
SECTION 612. Merger, Conversion, Consolidation or Succession to Business....52
SECTION 613. Preferential Collection of Claims Against Company..............52
SECTION 614. Appointment of Authenticating Agent............................53
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY....................................................55
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.....55
SECTION 702. Preservation of Information; Communications to Holders.........55
SECTION 703. Reports by Trustee.............................................55
SECTION 704. Reports by Company.............................................56
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE..............................................56
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms...........56
SECTION 802. Successor Substituted..........................................57
ARTICLE NINE SUPPLEMENTAL INDENTURES........................................58
SECTION 901. Supplemental Indentures Without Consent of Holders.............58
SECTION 902. Supplemental Indentures With Consent of Holders................59
SECTION 903. Execution of Supplemental Indentures...........................61
SECTION 904. Effect of Supplemental Indentures..............................61
SECTION 905. Conformity with Trust Indenture Act............................61
SECTION 906. Reference in Securities to Supplemental Indentures.............61
ARTICLE TEN COVENANTS......................................................62
SECTION 1001. Payment of Principal, Premium and Interest.....................62
SECTION 1002. Maintenance of Office or Agency................................62
SECTION 1003. Money for Securities Payments to Be Held in Trust..............62
SECTION 1004. Statement by Officers as to Default............................63
SECTION 1005. Existence......................................................64
SECTION 1006. Waiver of Certain Covenants....................................64
ARTICLE ELEVEN REDEMPTION OF SECURITIES.......................................64
SECTION 1101. Applicability of Article.......................................64
SECTION 1102. Election to Redeem; Notice to Trustee..........................64
SECTION 1103. Selection by Trustee of Securities to Be Redeemed..............65
SECTION 1104. Notice of Redemption...........................................65
-iv-
SECTION 1105. Deposit of Redemption Price...................................66
SECTION 1106. Securities Payable on Redemption Date.........................67
SECTION 1107. Securities Redeemed in Part...................................67
ARTICLE TWELVE SINKING FUNDS.................................................67
SECTION 1201. Applicability of Article......................................67
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.........68
SECTION 1203. Redemption of Securities for Sinking Fund.....................68
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF THE HOLDERS........................68
SECTION 1301. Applicability of Article......................................68
SECTION 1302. Repayment of Securities.......................................69
SECTION 1303. Exercise of Option............................................69
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable...............................................69
SECTION 1305. Securities Repaid in Part.....................................70
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE............................70
SECTION 1401. Company's Option to Effect Defeasance or Covenant Defeasance..70
SECTION 1402. Defeasance and Discharge......................................70
SECTION 1403. Covenant Defeasance...........................................71
SECTION 1404. Conditions to Defeasance or Covenant Defeasance...............71
SECTION 1405. Acknowledgment of Discharge By Trustee........................73
SECTION 1406. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions.................73
SECTION 1407. Reinstatement.................................................74
ARTICLE FIFTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS, DIRECTORS AND EMPLOYEES.............................75
SECTION 1501. Exemption from Individual Liability...........................75
-v-
INDENTURE, dated as of December 1, 1997, between NorAm Energy Corp., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 1111 Louisiana,
Houston, Texas 77002, and Texas Commerce Bank National Association, a national
banking association duly organized and existing under the laws of the United
States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures, notes
or other evidences of indebtedness (herein called the "Securities"), to be
issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
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;
(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 in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United States
of America
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at the date of such computation, provided, that when two or more principles
are so generally accepted, it shall mean that set of principles consistent
with those in use by the Company;
(4) 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 Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors, or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, 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.
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"Company Request" or "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
its Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
as follows: (a) for payment, registration, transfer and exchange of the
Securities: One Main Place, 1201 Main Street, 18th Floor, Dallas, Texas 75202,
Attention: Registered Bond Events; telephone: (214) 672-5125 or (800) 275-
2048; telecopier: (214) 672-5746; and (b) for all other communications relating
to the Securities: 600 Travis Street, Suite 1150, Houston, Texas 77002,
Attention: Global Trust Services; telephone: (713) 216-5712; telecopier: (713)
216-5476.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1403.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1402.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more 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, in each case as amended from time to time.
"Exchange Rate" has the meaning specified in Section 501.
"Expiration Date" has the meaning specified in Section 104.
"Extension Notice" has the meaning specified in Section 308.
"Extension Period" has the meaning specified in Section 308.
"Final Maturity" has the meaning specified in Section 308.
-3-
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Houston Industries" means Houston Industries Incorporated, a Texas
corporation, and its successors.
"Indenture" means this instrument as originally executed and 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", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Maximum Interest Rate" has the meaning specified in Section 311.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, a Vice Chairman of the Board, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (and who may be an employee of the Company), and who
shall be acceptable to the Trustee.
"Optional Reset Date" has the meaning specified in Section 307(b).
-4-
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Original Stated Maturity" has the meaning specified in Section 308.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1402; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken
any request, demand, authorization, direction, notice, consent, waiver or
other action hereunder as of any date, (A) the principal amount of an
Original Issue Discount Security which shall be deemed to be Outstanding
shall be the amount of the principal thereof which would be due and payable
as of such date upon acceleration of the Maturity thereof to such date
pursuant to Section 502, (B) if, as of such date, the principal amount
payable at the Stated Maturity of a Security is not determinable, the
principal amount of such Security which shall be deemed to be Outstanding
shall be the amount as specified or determined as contemplated by Section
301, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date
in the manner provided as contemplated by Section 301, of the principal
amount of such Security (or, in the case of a Security described in Clause
(A) or (B) above, of the amount determined as provided in such Clause), and
(D) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether
-5-
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, waiver or other action, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company. The Company initially authorizes and appoints Houston Industries as the
Paying Agent for the Securities.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Reset Notice" has the meaning specified in Section 307(b).
"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
-6-
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.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"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 principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsequent Interest Period" has the meaning specified in Section 307(b).
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For 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.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 1404.
-7-
"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".
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, 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 requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, the
individual has made or caused to be made such examination or investigation
as is necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 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
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or more other such Persons may certify or give an opinion 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.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments 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.
The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient. 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.
The ownership of Securities shall be proved by the Security Register.
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
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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.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
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With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with
(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 instrument 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 his address as it appears in the Security 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 any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such
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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 of this Indenture limits, qualifies or conflicts with
a provision of the Trust Indenture Act which 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 which 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.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, and no additional interest shall
accrue as the result of such delayed payment.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the form set forth in this Article, or
in such other form as shall be established by or pursuant to a Board Resolution
or in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with applicable tax laws or the rules of any
securities exchange or automated quotation system on which the Securities of
such series may be listed or traded or Depositary therefor or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof. 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 of each series shall be typewritten,
printed, lithographed or engraved or produced by any combination of these
methods, if required by any securities exchange or automated quotation system on
which the Securities of such series may be listed or traded, on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange or automated quotation system on which the Securities of
such series may be listed or traded, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
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[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS
THEREUNDER.]
NORAM ENERGY CORP.
(Title of Security)
No. __________ $__________
CUSIP No. ________
NORAM ENERGY CORP., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of ____________________ Dollars on
____________________ [if the Security is to bear interest prior to Maturity,
insert -- , and to pay interest thereon from _______________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on __________ and __________ in each year, commencing
__________, at the rate of _____% per annum, until the principal hereof is paid
or made available for payment [if applicable, insert -- , provided that any
principal and premium, and any such installment of interest, which is overdue
shall bear interest at the rate of _____% per annum (to the extent permitted by
applicable law), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. [If
applicable, insert -- The amount of interest payable for any period shall be
computed on the basis of twelve 30-day months and a 360-day year. The amount of
interest payable for any partial period shall be computed on the basis of a 360-
day year of twelve 30-day months and the days elapsed in any partial month. In
the event that any date on which interest is payable on this Security is not a
Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as if
made on the date the payment was originally payable. A "Business Day" shall
mean, when used with respect to any Place of Payment, each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law or executive order
to close.] The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the __________ or __________ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for 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
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Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Securities of
this series may be listed or traded, and upon such notice as may be required by
such exchange or automated quotation system, all as more fully provided in said
Indenture].
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of _____% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in __________, 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 [if applicable, insert -- ;
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 Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated in writing by the Person entitled thereto as specified in the
Security Register].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _______________ NORAM ENERGY CORP.
By:_________________________________________
Attest:
_____________________
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SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of December __, 1997 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and _______________, as Trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert --, limited in aggregate principal amount
to $__________].
[If applicable, insert-- The interest rate (or the spread or spread
multiplier used to calculate such interest rate, if applicable) on this Security
may be reset by the Company on ____________ (each an "Optional Reset Date").
The Company may exercise such option with respect to this Security by notifying
the Trustee of such exercise at least 50 but not more than 60 days prior to an
Optional Reset Date for this Security. Not later than 40 days prior to each
Optional Reset Date, the Trustee shall transmit, in the manner provided for in
Section 106 of the Indenture, to the Holder of this Security a notice (the
"Reset Notice") indicating whether the Company has elected to reset the interest
rate (or the spread or spread multiplier used to calculate such interest rate,
if applicable), and if so (i) such new interest rate (or such new spread or
spread multiplier, if applicable) and (ii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next Optional
Reset Date or if there is no such next Optional Reset Date, to the Stated
Maturity of this Security (each such period a "Subsequent Interest Period"),
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during the Subsequent
Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an interest rate (or
a spread or spread multiplier used to calculate such interest rate, if
applicable) that is higher than the interest rate (or the spread or spread
multiplier, if applicable) provided for in the Reset Notice, for the Subsequent
Interest Period by causing the Trustee to transmit, in the manner provided for
in Section 106 of the Indenture, notice of such higher interest rate (or such
higher spread or spread multiplier, if applicable) to the Holder of this
Security. Such notice shall be irrevocable. All Securities of this series with
respect to which the interest rate (or the spread or spread multiplier used to
calculate such interest rate, if applicable) is reset on an Optional Reset Date,
and with respect to which the Holders of such Securities have not tendered such
Securities for repayment (or have validly revoked any such tender) pursuant to
the next succeeding paragraph, will bear such higher interest rate (or such
higher spread or spread multiplier, if applicable).
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The Holder of this Security will have the option to elect repayment by
the Company of the principal of this Security on each Optional Reset Date at a
price equal to the principal amount hereof plus interest accrued to such
Optional Reset Date. In order to obtain repayment on an Optional Reset Date,
the Holder must follow the procedures set forth in Article Thirteen of the
Indenture for repayment at the option of Holders except that the period for
delivery or notification to the Trustee shall be at least 25 but not more than
35 days prior to such Optional Reset Date and except that, if the Holder has
tendered this Security for repayment pursuant to the Reset Notice, the Holder
may, by written notice to the Trustee, revoke such tender or repayment until the
close of business on the tenth day before such Optional Reset Date.]
[If applicable, insert -- The Stated Maturity of this Security may be
extended at the option of the Company for _______________ (each an "Extension
Period") up to but not beyond ____________ (the "Final Maturity"). The Company
may exercise such option with respect to this Security by notifying the Trustee
of such exercise at least 50 but not more than 60 days prior to the Stated
Maturity of this Security in effect prior to the exercise of such option (the
"Original Stated Maturity"). If the Company exercises such option, the Trustee
shall transmit, in the manner provided for in Section 106 of the Indenture, to
the Holder of this Security not later than 40 days prior to the Original Stated
Maturity a notice (the "Extension Notice") indicating (i) the election of the
Company to extend the Maturity, (ii) the new Stated Maturity, (iii) the interest
rate applicable to the Extension Period and (iv) the provisions, if any, for
redemption during such Extension Period. Upon the Trustee's transmittal of the
Extension Notice, the Stated Maturity of this Security shall be extended
automatically and, except as modified by the Extension Notice and as described
in the next paragraph, this Security will have the same terms as prior to the
transmittal of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days before the
Original Stated Maturity of this Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of this Security. Such notice shall be irrevocable.
All Securities of this series with respect to which the Stated Maturity is
extended will bear such higher interest rate.
If the Company extends the Maturity of this Security, the Holder will
have the option to elect repayment of this Security by the Company on the
Original Stated Maturity at a price equal to the principal amount hereof, plus
interest accrued to such date. In order to obtain repayment on the Original
Stated Maturity once the Company has extended the Maturity hereof, the Holder
hereof must follow the procedures set forth in Article Thirteen of the Indenture
for repayment at the option of Holders, except that the period for delivery or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to the Original Stated Maturity and except that, if the Holder has tendered this
Security for repayment pursuant to an Extension Notice, the Holder may, by
written notice to the Trustee, revoke such tender for repayment until the close
of business on the tenth day before the Original Stated Maturity.]
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[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on __________ in any year commencing with the year _____ and ending with the
year _____ through operation of the sinking fund for this series at a Redemption
Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after __________, 19__], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before __________, _____%, and if redeemed] during the 12-month period
beginning __________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on __________ in any
year commencing with the year _____ and ending with the year _____ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after __________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning __________ of the years indicated,
Year Redemption Price For Redemption Price For
- ------ Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
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and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to __________, redeem any Securities of this series as
contemplated by [if applicable, insert --Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than _____% per annum.]
[If applicable, insert -- The sinking fund for this series provides
for the redemption on __________ in each year beginning with the year _____ and
ending with the year _____ of [if applicable, insert -- not less than
$__________ ("mandatory sinking fund") and not more than] $__________ aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if applicable,
insert -- mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required to
be made [if applicable, insert --, in the inverse order in which they become
due].]
[If the Security is subject to redemption of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth in the Indenture.
[If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
-19-
[If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of 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.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.
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,
-20-
to pay the principal of and any premium 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 Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $__________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 204. 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, in addition to the provisions contained in Sections 202 and
203, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
-21-
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
Dated: ____________
__________________________
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
in a Company Order, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from 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 the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for
-22-
any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder); provided, however, that the
authorized aggregate principal amount of such series may be increased above
such amount by a Board Resolution to such effect;
(3) the date or dates on which the principal of any Securities of the
series is payable, or the method by which such date or dates shall be
determined or extended;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue, or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on any Interest Payment Date,
or the method by which such date or dates shall be determined, and the
basis upon which interest shall be calculated if other than that of a 360-
day year of twelve 30-day months;
(5) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable, the place or
places where the Securities of such series may be presented for
registration of transfer or exchange, and the place or places where notices
and demands to or upon the Company in respect of the Securities of such
series may be made;
(6) the period or periods within or the date or dates on which, the
price or prices at which and the term 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;
(7) the obligation or the right, if any, of the Company to redeem or
purchase any Securities of the series pursuant to any sinking fund,
amortization or analogous provisions or at the option of the Holder thereof
and the period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and the
other terms and conditions upon which any Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(9) 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;
(10) if other than the currency of the United States of America, the
currency, currencies or currency units, including composite currencies, in
which the principal of or any
-23-
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;
(11) 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 period or periods within or the date or dates on 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);
(12) the percentage of the principal amount at which such Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount of Securities of the series that shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502 or the method by which such portion shall be determined;
(13) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which
shall be due and payable upon any Maturity other than the Stated Maturity
or which shall be deemed to be Outstanding as of any date prior to the
Stated Maturity (or, in any such case, the manner in which such amount
deemed to be the principal amount shall be determined);
(14) if applicable, that the Securities of the series, in whole or any
specified part, shall not be defeasible or shall be defeasible in a manner
varying from Section 1402 and Section 1403 and, if other than by a Board
Resolution, the manner in which any election by the Company to defease such
Securities shall be evidenced;
(15) whether the Securities of the series, or any portion thereof,
shall initially be issuable in the form of a temporary Global Security
representing all or such portion of the Securities of such series and
provisions for the exchange of such temporary Global Security for
definitive Securities of such series;
(16) if applicable, that any Securities of the series, or any portion
thereof, shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends which shall be borne
by any such Global Security in addition to or in lieu of that set forth in
Section 204 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
-24-
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;
(17) if applicable, that the Securities of the series, in whole or any
specified part, shall be subject to the optional interest reset provisions
of Section 307(b);
(18) if applicable, that the Securities of the series, in whole or any
specified part, shall be subject to the optional extension of maturity
provisions of Section 308;
(19) any addition to or change in the Events of Default which applies
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;
(20) any addition to or change in the covenants set forth in Article
Ten which applies to Securities of the series;
(21) the additions or changes, if any, to this Indenture with respect
to the Securities of such series as shall be necessary to permit or
facilitate the issuance of the Securities of such series in bearer form,
registrable or not registrable as to principal, and with or without
interest coupons;
(22) the appointment of any Paying Agent or Agents for the Securities
of such series, if other than Houston Industries;
(23) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the
additions or changes, if any, to this Indenture with respect to the
Securities of such series to permit or facilitate such conversion or
exchange;
(24) the terms and conditions, if any, pursuant to which the
Securities of the series are secured;
(25) any restriction or condition on the transferability of the
Securities of such series; and
(26) any other terms of the Securities of such 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 herein or 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 such indenture supplemental hereto.
-25-
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate or Company Order setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered
form without coupons and only in such 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 $1,000 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 of the Board, its Chief Executive Officer, its Vice Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced or impressed thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and 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,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
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(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 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 or Company
Order 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.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 310, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 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 of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
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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 the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. 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 and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided. If any indenture supplemental
hereto refers to any transfer agents (in addition to the Security Registrar)
initially designated by the Company with respect to any series of Securities,
the Company may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
provided that the Company maintains a transfer agent in each Place of Payment
for such series. The Company may at any time designate additional transfer
agents with respect to any series of Securities.
Upon surrender for registration of transfer of any Security of a
series at the office or agency of the Company in a Place of Payment 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 like
tenor and 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
like tenor and 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.
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Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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.
Neither the Trustee nor the Company shall be required, pursuant to the
provisions of this Section, (A) to issue, register the transfer of or exchange
any Securities of any series (or of any 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 selected for
redemption under Section 1103 and ending at the close of business on the day of
such mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption, in whole or in part, except, in the case of any
Security to be redeemed in part, any portion not to be redeemed.
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 depositary, in each case, unless the Company has
approved a successor Depositary within 90 days, (B) there shall have
occurred and be continuing an Event of Default with respect to such Global
Security, (C) the Company in its sole discretion determines that such
Global Security will be so exchangeable or transferable or (D) there shall
exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by
Section 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 Securities issued
in exchange for a Global
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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
1107 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 together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and 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. If, after the delivery of such new Security,
a bona fide purchaser of the original Security in lieu of which such new
Security was issued presents for payment or registration such original Security,
the Trustee shall be entitled to recover such new Security from the party to
whom it was delivered or any party taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Company and the Trustee in connection therewith.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of counsel to the Company and the fees
and expenses of the Trustee, its agents and counsel) 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
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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; Optional Interest
Reset.
(a) Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security of any series
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest in respect of Securities of such series,
except that, unless otherwise provided in the Securities of such series,
interest payable on the Stated Maturity of the principal of a Security shall be
paid to the Person to whom principal is paid. The initial payment of interest on
any Security of any series which is issued between a Regular Record Date and the
related Interest Payment Date shall be payable as provided in such Security or
in the Board Resolution pursuant to Section 301 with respect to the related
series of Securities. Except in the case of a Global Security, at the option of
the Company, interest on any series of Securities may be paid (i) by check
mailed to the address of the Person entitled thereto as it shall appear on the
Security Register of such series or (ii) by wire transfer in immediately
available funds at such place and to such account as designated in writing by
the Person entitled thereto as specified in the Security Register of such
series.
Any Paying Agents will be identified in a supplemental indenture
hereto. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however, the Company at all times
will be required to maintain a Paying Agent in each Place of Payment for each
series of Securities.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, any interest on any Security of any series which is
payable, but is not timely paid or duly provided for, on any Interest Payment
Date for Securities of such series (herein called "Defaulted Interest") shall
forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of
which interest is in default (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest
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proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
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 given to each Holder of Securities
of such series in the manner set forth in Section 106, 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 or automated quotation system
on which such Securities may be listed or traded, and upon such notice as
may be required by such exchange or automated quotation system, 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 of transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
(b) The provisions of this Section 307(b) may be made applicable to
any series of Securities pursuant to Section 301 (with such modifications,
additions or substitutions as may be specified pursuant to such Section 301).
The interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable) on any Security of such series may be reset by the
Company on the date or dates specified on the face of such Security (each an
"Optional Reset Date"). The Company may exercise such option with respect to
such Security by notifying the Trustee of such exercise at least 50 but not more
than 60 days prior to an Optional Reset Date for such Security. Not later than
40 days prior to each Optional Reset Date, the Trustee shall transmit, in the
manner provided for in Section 106, to the Holder of any such Security a notice
(the "Reset Notice") indicating whether the Company has elected to reset the
interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable), and if so (i) such new interest rate (or such new
spread or spread multiplier, if applicable) and (ii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next Optional
Reset Date or if there is no
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such next Optional Reset Date, to the Stated Maturity of such Security (each
such period a "Subsequent Interest Period"), including the date or dates on
which or the period or periods during which and the price or prices at which
such redemption may occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an interest rate (or
a spread or spread multiplier used to calculate such interest rate, if
applicable) that is higher than the interest rate (or the spread or spread
multiplier, if applicable) provided for in the Reset Notice, for the Subsequent
Interest Period by causing the Trustee to transmit, in the manner provided for
in Section 106, notice of such higher interest rate (or such higher spread or
spread multiplier, if applicable) to the Holder of such Security. Such notice
shall be irrevocable. All Securities with respect to which the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) is reset on an Optional Reset Date, and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the next succeeding paragraph,
will bear such higher interest rate (or such higher spread or spread multiplier,
if applicable).
The Holder of any such Security will have the option to elect
repayment by the Company of the principal of such Security on each Optional
Reset Date at a price equal to the principal amount thereof plus interest
accrued to such Optional Reset Date. In order to obtain repayment on an
Optional Reset Date, the Holder must follow the procedures set forth in Article
Thirteen for repayment at the option of Holders except that the period for
delivery or notification to the Trustee shall be at least 25 but not more than
35 days prior to such Optional Reset Date and except that, if the Holder has
tendered any Security for repayment pursuant to the Reset Notice, the Holder
may, by written notice to the Trustee, revoke such tender or repayment until the
close of business on the tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Optional Extension of Maturity.
The provisions of this Section 308 may be made applicable to any
series of Securities pursuant to Section 301 (with such modifications, additions
or substitutions as may be specified pursuant to such Section 301). The Stated
Maturity of any Security of such series may be extended at the option of the
Company for the period or periods specified on the face of such Security (each
an "Extension Period") up to but not beyond the date (the "Final Maturity") set
forth on the face of such Security. The Company may exercise such option with
respect to any Security by notifying the Trustee of such exercise at least 50
but not more than 60 days prior to the Stated Maturity of such
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Security in effect prior to the exercise of such option (the "Original Stated
Maturity"). If the Company exercises such option, the Trustee shall transmit,
in the manner provided for in Section 106, to the Holder of such Security not
later than 40 days prior to the Original Stated Maturity a notice (the
"Extension Notice") indicating (i) the election of the Company to extend the
Maturity, (ii) the new Stated Maturity, (iii) the interest rate applicable to
the Extension Period and (iv) the provisions, if any, for redemption during such
Extension Period. Upon the Trustee's transmittal of the Extension Notice, the
Stated Maturity of such Security shall be extended automatically and, except as
modified by the Extension Notice and as described in the next paragraph, such
Security will have the same terms as prior to the transmittal of such Extension
Notice.
Notwithstanding the foregoing, not later than 20 days before the
Original Stated Maturity of such Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of such Security. Such notice shall be irrevocable.
All Securities with respect to which the Stated Maturity is extended will bear
such higher interest rate.
If the Company extends the Maturity of any Security, the Holder will
have the option to elect repayment of such Security by the Company on the
Original Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order to obtain repayment on the Original
Stated Maturity once the Company has extended the Maturity thereof, the Holder
must follow the procedures set forth in Article Thirteen for repayment at the
option of Holders, except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to the Original
Stated Maturity and except that, if the Holder has tendered any Security for
repayment pursuant to an Extension Notice, the Holder may, by written notice to
the Trustee, revoke such tender for repayment until the close of business on the
tenth day before the Original Stated Maturity.
SECTION 309. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered on the applicable record
date as the owner of such Security for the purpose of receiving payment of
principal of and any premium and (subject to Section 307) any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 310. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company
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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 may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be disposed of as
directed by a Company Order.
SECTION 311. Computation of Interest; Usury Not Intended.
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 interest on
the Securities of each series for any partial period shall be computed on the
basis of a 360-day year of twelve 30-day months and the number of days elapsed
in any partial month.
The amount of interest (or amounts deemed to be interest under
applicable law) payable or paid on any Security shall be limited to an amount
which shall not exceed the maximum nonusurious rate of interest allowed by the
applicable laws of the State of Texas or any applicable law of the United States
permitting a higher maximum nonusurious rate that preempts such applicable Texas
laws, which could lawfully be contracted for, taken, reserved, charged or
received (the "Maximum Interest Rate"). If, as a result of any circumstances
whatsoever, the Company or any other Person is deemed to have paid interest (or
amounts deemed to be interest under applicable law) or any Holder of a Security
is deemed to have contracted for, taken, reserved, charged or received interest
(or amounts deemed to be interest under applicable law), in excess of the
Maximum Interest Rate, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of validity, and if from any such circumstance, the
Trustee, acting on behalf of the Holders, or any Holder shall ever receive
interest or anything that might be deemed interest under applicable law that
would exceed the Maximum Interest Rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing on the
applicable Security or Securities and not to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance of any such Security or
Securities, such excess shall be refunded to the Company. In addition, for
purposes of determining whether payments in respect of any Security are
usurious, all sums paid or agreed to be paid with respect to such Security for
the use, forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such Bond.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the
-35-
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee in writing of any change in "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 401), 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 has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for such purpose money in an amount sufficient to
pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation,
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for principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to the
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
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(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Company in this Indenture with respect to a
Security of that series (other than a covenant or warranty a default in the
performance of which or the breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under
this Indenture; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
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(7) any other Event of Default provided with respect to Securities of
that series;
provided, however, that no event described in clause (4), (5), (6) or (7) above
shall constitute an Event of Default hereunder until a Responsible Officer
assigned to and working in the Trustee's corporate trust department has actual
knowledge thereof or until a written notice of any such event is received by the
Trustee at the Corporate Trust Office, and such notice refers to the Securities
generally, the Company or the Indenture.
Notwithstanding the foregoing provisions of this Section 501, if the
principal or any premium or interest on any Security is payable in a currency
other than the currency of the United States of America and such currency is not
available to the Company for making payment thereof due to the imposition of
exchange controls or other circumstances beyond the control of the Company, the
Company will be entitled to satisfy its obligations to Holders of the Securities
by making such payment in the currency of the United States of America in an
amount equal to the currency of the United States of America equivalent of the
amount payable in such other currency, as determined by the Trustee by reference
to the noon buying rate in The City of New York for cable transfers for such
currency ("Exchange Rate"), as such Exchange Rate is reported or otherwise made
available by the Federal Reserve Bank of New York on the date of such payment,
or, if such rate is not then available, on the basis of the most recently
available Exchange Rate. Notwithstanding the foregoing provisions of this
Section 501, any payment made under such circumstances in the currency of the
United States of America where the required payment is in a currency other than
the currency of the United States of America will not constitute an Event of
Default under this Indenture.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than (a) an Event of Default specified
in Section 501(4) or another Event of Default specified in Section 501(7) which
is common to all Outstanding series of Securities or (b) an Event of Default
specified in Section 501(5) or 501(6)) with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount of all
the Securities of that series (or, if any Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. If (a) an Event of Default
specified in Section 501(4) or another Event of Default under Section 501(7)
which is common to all Outstanding series of Securities occurs and is continuing
or (b) an Event of Default specified in Section 501(5) or 501(6) occurs and is
continuing, then in every such case, the Trustee or the Holders of not less than
25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by a notice in writing to the Company (and to
the Trustee if given by Holders) may declare the principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms
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thereof) of all the Securities then Outstanding to be due and payable
immediately, and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Securities of
that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) 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 non-payment 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 on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
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the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and any premium and interest and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest,
at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, all amounts owing the Trustee, its agents and counsel
under Section 607.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative 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 and
any predecessor 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; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 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 all amounts owing the Trustee and any predecessor
Trustee under Section 607, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
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SECTION 506. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal or any
premium or 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 any premium and interest on such series of 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 series of Securities for principal and any
premium and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or any
other Person or Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver, assignee, trustee, liquidator or
sequestrator (or other similar official), or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of security or indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
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it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such 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 Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding 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.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or 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.
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SECTION 512. Control by Holders.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the proceeding
so directed would involve the Trustee in personal liability or would
otherwise be contrary to applicable law.
SECTION 513. Waiver of Past Defaults.
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 with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series 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.
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.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and such court may in its discretion
assess reasonable costs including reasonable attorneys' fees and expenses,
against any party litigant in such suit, having due
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regard to the merits and good faith of the claims or defenses made by such party
litigant; provided that the provisions of this Section 514 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder or
group of Holders holding in the aggregate more than 10 per centum in principal
amount of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or interest on any
Security, on or after the respective due dates expressed in such Security.
Neither this Section 514 nor the Trust Indenture Act shall be deemed to
authorize any court to require such an undertaking or such an assessment in any
proceeding instituted by the Company.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and 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.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act.
SECTION 602. Notice of Defaults.
If a 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(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
The Trustee is not required to take notice or deemed to have notice of
any Event of Default with respect to the Securities, except an Event of Default
under Section 501(1),
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Section 501(2) or Section 501(3) hereof, unless a Responsible Officer shall have
received written notice of such Event of Default from the Company, any
Subsidiary or the Holder of any Security.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) 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;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) 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;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) 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;
(6) 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;
(7) 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
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not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(8) the Trustee is not required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers
under this Indenture;
(9) in the event the Trustee receives inconsistent or conflicting
requests and indemnity from two or more groups of Holders of Securities,
each representing less than a majority in aggregate principal amount of the
Securities Outstanding, the Trustee, in its sole discretion, may determine
what action, if any, shall be taken;
(10) the Trustee's immunities and protections from liability and its
right to indemnification in connection with the performance of its duties
under this Indenture shall extend to the Trustee's officers, directors,
agents and employees. Such immunities and protections and right to
indemnification, together with the Trustee's right to compensation, shall
survive the Trustee's resignation or removal and final payment of the
Securities; and
(11) except for information provided by the Trustee concerning the
Trustee, the Trustee shall have no responsibility for any information in
any offering memorandum or other disclosure material distributed with
respect to the Securities, and the Trustee shall have no responsibility for
compliance with any state or federal securities laws in connection with the
Securities.
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 neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
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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 with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation for all
services rendered by it hereunder in such amounts as the Company and the
Trustee shall agree from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
In the event the Trustee incurs expenses or renders services in any
proceedings which result from an Event of Default under Section 501, subsection
(5) or (6) of this Indenture, or from any default which, with the passage of
time, would become such Event of Default, the expenses so incurred and
compensation for services so rendered are intended to constitute expenses of
administration under the United States Bankruptcy Code or equivalent law.
SECTION 608. 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.
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There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be 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 its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the 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.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
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.
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,
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then, in any such case, (A) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee with respect to all Securities, or (B)
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 himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, 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.
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 name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
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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 Trustee's co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
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, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any, of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been
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authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor Trustee or in the name of such successor
Trustee, and in all cases the certificate of authentication shall have the full
force which it is provided anywhere in the Securities or in this Indenture that
the certificate of the Trustee shall have.
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). For purposes of Section 311(b)(4) and
(6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks and
payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange, acceptance
or obligation which is made, drawn, negotiated or incurred by the Company (or
any such obligor) for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously constituting the
security; provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company (or any such obligor)
arising from the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said
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supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent
shall be the successor Authenticating Agent hereunder, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: _____________
_________________________,
as Trustee
By: _______________________,
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as Authenticating Agent
By: _______________________
Authorized Officer
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
(1) semi-annually, not later than January 15 and July 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 the
preceding January 1 or July 1 as the case may be, and
(2) 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 Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
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SECTION 703. Reports by Trustee.
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.
Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than January 31 in each calendar
year, commencing with the first January 31 after the first issuance of
Securities under this Indenture.
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 in the Trust Indenture Act; provided that any
--------
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 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.
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
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indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with; provided,
however, that the delivery of an Officers' Certificate or an Opinion of
Counsel is not required with respect to any consolidation, merger,
conveyance, transfer or lease involving the Company and any wholly owned
subsidiary of the Company.
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 in the event of any such
conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
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In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
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 corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article Eight; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series), provided, however, that in respect
of any such additional Events of Default such supplemental indenture may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right
of the Holders of a majority in aggregate principal amount of that or those
series of Securities to which such additional Events of Default apply to
waive such default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
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(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities; provided,
however, that if such addition, change or elimination shall adversely
affect the interests of Holders of Securities of any series, such addition,
change or elimination shall become effective with respect to such series
only when no such Security of such series remains Outstanding; or
(6) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon
the Company; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to provide for uncertificated securities in addition to
certificated securities; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (10) shall not adversely affect the interests of the Holders
of Securities of any series; or
(11) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and
1403; provided that any such action shall not adversely affect the
interests of the holders of Securities of such series or any other series
of Securities; or
(12) to comply with the rules or regulations of any securities
exchange or automated quotation system on which any of the Securities may
be listed or traded; or
(13) to add to, change or eliminate any of the provisions of this
Indenture as shall be necessary or desirable in accordance with any
amendments to the Trust Indenture Act, provided that such action does not
adversely affect the rights or interests of any Holder of Securities.
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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 (treated as one class), by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(1) except to the extent permitted by Section 307(b) or Section 308
or otherwise specified in the form or terms of the Securities of any series
as permitted by Sections 201 and 301 with respect to extending the Stated
Maturity of any Security of such series, change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any
Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or reduce the
amount of the principal of an Original Issue Discount Security or any other
Security which would be due and payable upon a declaration of acceleration
of the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any
premium or 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
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1006, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1006, or the
deletion of this proviso, in accordance with the requirements of Sections
611 and 901(9), or
(4) if the Securities of any series are convertible or exchangeable
into any other securities or property of the Company, make any change that
adversely affects the right to convert or exchange any Security of such
series (except as permitted by Section 901) or decrease the conversion or
exchange rate or increase the conversion price of any such Security of
such series, or
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(5) if the Securities of any series are secured, change the terms and
conditions pursuant to which the Securities of such series are secured in a
manner adverse to the Holders of the secured Securities of such series.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
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be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company initially appoints the Trustee, acting through its
Corporate Trust Office, as its agent for said purpose. 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 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 each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate to the extent required by law and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and any premium
and 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.
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Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will provide to a Paying Agent a sum sufficient to pay
the principal of or any premium or interest on any Securities of that series,
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 to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) 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 for payment in
respect of the Securities of that series.
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 any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable may be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 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, one of the signers of which shall be the principal executive,
principal accounting or principal financial officer of the Company, stating
whether or not to the best knowledge of the signers thereof the Company, is in
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default in the performance and observance of any of the terms, provisions,
covenants and 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. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 1006. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(19),
901(2) or 901(7) for the benefit of the Holders of such series or in Section
1005, if the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities 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 of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, not less than
45 nor more than 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date, of the principal amount of Securities of such
series to be redeemed and, if applicable, of the tenor of the
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Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for 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 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. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
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With respect to Securities of each series to be redeemed, each notice
of redemption shall identify the Securities to be redeemed (including CUSIP
numbers) and shall state:
(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 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,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 1105. Deposit of Redemption Price.
On or before the Redemption Date specified in the notice of redemption
given as provided in Section 1104, 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.
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SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities is herein
referred to as an "optional sinking fund payment". If provided for by the
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terms of any Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 45 days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF THE HOLDERS
SECTION 1301. Applicability of Article.
Repayment of securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of such
Securities and (except as otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.
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SECTION 1302. Repayment of Securities.
Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereof,
together with interest and/or premium, if any, thereon accrued to the Repayment
Date specified in or pursuant to the terms of such Securities. The Company
covenants that on or before the Repayment Date it will 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 principal (or, if so provided by the terms of the
Securities of any series, a percentage of the principal) of, the premium, if
any, and (except if the Repayment Date shall be an Interest Payment Date)
accrued interest on, all the Securities or portions thereof, as the case may be,
to be repaid on such date.
SECTION 1303. Exercise of Option.
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. To be repaid at the option of the Holder, any Security so
providing for such repayment, with the "Option to Elect Repayment" form on the
reverse of such Security duly completed by the Holder (or by the Holder's
attorney duly authorized in writing), must be received by the Company at the
Place of Payment therefor specified in the terms of such Security (or at such
other place or places of which the Company shall from time to time notify the
Holders of such Securities) not earlier than 45 days nor later than 30 days
prior to the Repayment Date. If less than the entire principal amount of such
Security is to be repaid in accordance with the terms of such Security, the
principal amount of such Security to be repaid, in increments of the minimum
denomination for Securities of such series, the premium, if any, to be paid, and
the denomination or denominations of the Security or Securities to be issued to
the Holder for the portion of the principal amount of such Security surrendered
that is not to be repaid, must be specified. The principal amount of any
Security providing for repayment at the option of the Holder thereof may not be
repaid in part if, following such repayment, the unpaid principal amount of such
Security would be less than the minimum authorized denomination of Securities of
the series of which such Security to be repaid is a part. Except as otherwise
may be provided by the terms of any Security providing for repayment at the
option of the Holder thereof and as provided in Sections 307(b) and 308,
exercise of the repayment option by the Holder shall be irrevocable unless
waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and Payable.
If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease
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to bear interest. Upon surrender of any such Security for repayment in
accordance with such provisions, the principal amount of such Security so to be
repaid shall be paid by the Company, together with accrued interest and/or
premium, if any, to the Repayment Date; provided, however, that installments of
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable (but without interest thereon, unless the Company shall default
in the payment thereof) 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.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part.
Upon surrender of any Security which is to be repaid in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge and at the expense of the
Company, a new Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1402
or Section 1403 applied to any Securities or any series of Securities, as the
case may be, (unless designated pursuant to Section 301 as not being defeasible
pursuant to such Section 1402 or 1403), in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the
conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities.
SECTION 1402. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, the Company shall be deemed to have been discharged from its obligations
with respect to such Securities as provided in this Section on and after the
date the conditions set forth in Section 1404 are satisfied (hereinafter called
"Defeasance").
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For this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Securities and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 1403 applied to such Securities.
SECTION 1403. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, (1) the Company shall be released from its obligations under any covenants
provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit of the
Holders of such Securities and (2) the occurrence of any event specified in
Sections 501(4) (with respect to any such covenants provided pursuant to Section
301(19), 901(2) or 901(7)), and 501(7) shall be deemed not to be or result in an
Event of Default, in each case with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1404 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 501(4)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section
1402 or Section 1403 to any Securities or any series of Securities, as the case
may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
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before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation 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 (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, 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 depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 1402 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there
has been a change in the applicable federal income tax law, in either case
(A) or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1403 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.
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(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(5) and
(6), at any time on or prior to the 90th day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an agreement
whereby the Company irrevocably agrees to forfeit its right, if any,
(A) to reset the interest rate of such Securities pursuant to Section
307(b) and (B) to extend the Stated Maturity of such Securities pursuant to
Section 308.
(10) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1405. Acknowledgment of Discharge By Trustee.
Subject to Section 1407 below and after the Company has delivered to
the Trustee an Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent referred to in Section 1404, as the case may be,
relating to the defeasance or satisfaction and discharge of this Indenture have
been complied with, the Trustee upon request of the Company shall acknowledge in
writing the defeasance or the satisfaction and discharge, as the case may be, of
this Indenture and the discharge of the Company's obligations under this
Indenture.
SECTION 1406. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section and Section 1406, the Trustee and any such
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other trustee are referred to collectively as the "Trustee") pursuant to Section
1404 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1404 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 1407. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1402 or 1403 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1405 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
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ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS, DIRECTORS AND EMPLOYEES
SECTION 1501. Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer,
director or employee, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations
of the Company, and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, stockholders, officers,
directors, or employees, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer, director or employee, as
such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom, are hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issue of such Securities.
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.
-74-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NORAM ENERGY CORP.
By:_______________________________________
Name:_____________________________
Title:____________________________
Attest:
________________________
Name:___________________
Title:__________________
(SEAL)
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Trustee
By:_______________________________________
Name:_____________________________
Title:____________________________
(SEAL)
-75-
Exhibit 5
[Letterhead of Baker & Botts, L.L.P.]
064363.0103 December 9, 1997
NorAm Energy Corp.
Houston Industries Plaza
1111 Louisiana Street
Houston, Texas 77002
Ladies and Gentlemen:
We have acted as counsel for NorAm Energy Corp., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (Registration No. 333-41017)(the "Registration Statement"), filed by
the Company with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
proposed issuance and sale from time to time of up to $500,000,000 in aggregate
principal amount of the Company's debt securities (the "Debt Securities"), each
series of which will be issued under an Indenture (the "Indenture"), dated as of
December 1, 1997, between the Company and Texas Commerce Bank National
Association, as Trustee (the "Trustee").
In our capacity as your counsel in the connection referred to above,
we have examined the Certificate of Incorporation and Bylaws of the Company, as
amended to date, and the form (filed as an exhibit to the Registration
Statement) of the Indenture, and have examined the originals, or copies
certified or otherwise identified, of corporate records of the Company,
including minute books of the Company as furnished to us by the Company,
certificates of public officials and of representatives of the Company, statutes
and other instruments or documents, as a basis for the opinions hereinafter
expressed. In giving such opinions, we have relied upon certificates of
officers of the Company with respect to the accuracy of the material factual
matters contained in such certificates. In making our examination, we have
assumed that all signatures on documents examined by us are genuine, that all
documents submitted to us as originals are authentic and that all documents
submitted to us as certified or photostatic copies conform with the original
copies of such documents.
NorAm Energy Corp. -2- December 9,1997
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications set forth herein, we are of the opinion that:
When (i) the Registration Statement has become effective under the
Securities Act and the Indenture has been qualified under the Trust Indenture
Act of 1939, as amended, (ii) the Indenture has been duly authorized, executed
and delivered and (iii) the Debt Securities have been duly authorized, executed
and authenticated in accordance with the terms of the Indenture and the
applicable supplemental indenture creating such series of Debt Securities, and
delivered against payment of the agreed consideration therefor, the Debt
Securities will be legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as such enforceability is
subject to (x) any applicable bankruptcy, insolvency, reorganization or other
laws relating to or affecting creditors' rights generally and (y) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
The opinions set forth above are limited in all respects to matters of
Texas law, Delaware corporate law and the contract law of the State of New York
as in effect on the date hereof. At your request, this opinion is being
furnished to you for filing as Exhibit 5 to the Registration Statement.
Additionally, we hereby consent to the reference to our Firm under the caption
"Validity of Securities" in the Registration Statement. In giving such
consent, we do not thereby concede that we are within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
MSS/TST
EXHIBIT 12
NORAM ENERGY CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS)
NINE MONTHS ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30,
------------------- -------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ------- ------- --------- -------- -------- --------
Income from continuing operations
as set forth in Consolidated
Statement of Income $ 39,229 $ 55,349 $ 95,138 $ 65,529 $ 51,291 $ 39,935 $ 6,227
Add back:
Provision for income taxes 30,612 38,339 66,352 55,379 34,372 46,481 12,516
Less:
Non-utility interest capitalized 0 0 0 0 0 0 0
---------- -------- ------- --------- -------- -------- --------
69,841 93,688 161,490 120,908 85,663 86,416 18,743
---------- -------- ------- --------- -------- -------- --------
Fixed charges (from continuing
operations)
Interest 95,350 100,023 130,592 155,584 167,384 169,857 182,453
Amortization of debt discount and
expense 2,344 2,675 3,582 3,483 3,312 3,421 4,450
Portion of rents considered to
represent an interest factor 7,562 7,562 10,083 16,215 11,292 10,402 7,704
---------- -------- ------- --------- -------- -------- --------
Total fixed charges 105,256 110,260 144,257 175,282 181,988 183,680 194,607
---------- -------- ------- --------- -------- -------- --------
Earnings $175,097 $203,948 $305,747 $296,190 $267,651 $270,096 $213,350
========== ======== ======= ========= ======== ======== ========
Ratio of earnings to fixed charges 1.66 1.85 2.12 1.69 1.47 1.47 1.10
========== ======== ======= ========= ======== ======== ========
Interest Expense Reconciliation:
Interest expense above $ 95,350 $100,023 $130,592 $155,584 $167,384 $169,857 $182,453
Amort. of Debt Disc. & Exp. 2,344 2,675 3,582 3,483 3,312 3,421 4,450
AFUDC (563) (1,015) (1,617) (1,108) (1,331) (871) (1,675)
---------- -------- ------- --------- -------- -------- --------
Interest expense per financials $ 97,131 $101,683 $132,557 $157,959 $169,365 $172,407 $185,228
========== ======== ======= ========= ======== ======== ========
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Amendment No. 1 to the
registration statement of NorAm Energy Corp. on Form S-3 (File No. 333-41017) of
our report dated March 25, 1997, on our audits of the consolidated financial
statements and financial statement schedule of NorAm Energy Corp. and
Subsidiaries as of December 31, 1996 and 1995, and for the years ended December
31, 1996, 1995, and 1994, which report is included in the NorAm Energy Corp.
Annual Report on Form 10-K. We also consent to the reference to our firm under
the caption "Experts".
COOPERS & LYBRAND L.L.P.
Houston, Texas
December 9, 1997
