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EXHIBIT 4b2
SUPPLEMENTAL INDENTURE
This Supplemental Indenture, dated as of August 6, 1997 (this
"Supplemental Indenture"), among Houston Lighting & Power Company, a Texas
corporation ("HL&P"), HI Merger, Inc., a Delaware corporation ("HI Merger"),
NorAm Energy Corp., a Delaware corporation and successor in interest to Arkla,
Inc. (the "Company"), and The Chase Manhattan Bank (National Association), as
Trustee (the "Trustee"), supplements the Indenture dated as of March 1, 1987
(the "Indenture") between the Company and the Trustee under which the Company's
6% Convertible Subordinated Debentures due 2012 (the "Debentures") were issued
and are outstanding.
RECITALS
WHEREAS, pursuant to the terms of the Indenture the Debentures
were convertible into shares of common stock, par value $.625 per share ("NorAm
Common Stock"), of the Company prior to the Effective Time (as defined below);
WHEREAS, pursuant to an Agreement and Plan of Merger dated as
of August 11, 1996 , as amended by the Amendment to Agreement and Plan of
Merger dated as of October 23, 1996 (the "Merger Agreement"), among Houston
Industries Incorporated, a Texas corporation ("HI"), HL&P, HI Merger and the
Company, HI will be merged with and into HL&P, with HL&P to be the surviving
corporation and renamed "Houston Industries Incorporated" ("Houston"), and the
Company will be merged with and into HI Merger (the "NorAm Merger"), with HI
Merger to be the surviving corporation and renamed "NorAm Energy Corp.," as a
result of which each outstanding share of NorAm Common Stock will be converted
into either cash or shares of common stock, no par value, of Houston ("Houston
Common Stock"), as set forth in the Merger Agreement. The cash amount per
share of NorAm Common Stock will be $16.00 plus two percent (simple interest)
per quarter from May 11, 1997 until the closing of the NorAm Merger (the "Cash
Consideration"). The number of shares of Houston Common Stock issued per share
of NorAm Common Stock will be not less than 0.6154 shares nor more than 0.7529
shares (the "Stock Consideration"). The actual number will depend upon the
average closing price of HI common stock on the New York Stock Exchange during
a 20-trading-day period commencing 25 trading days prior to the closing date of
the NorAm Merger. The Merger Agreement contains certain provisions generally
designed to result in 50% of the outstanding shares of NorAm Common Stock being
converted into the Cash Consideration and 50% of the outstanding shares of
NorAm Common Stock being converted into the Stock Consideration;
WHEREAS, in connection with the NorAm Merger, HL&P, the
Company and HI Merger have duly determined to make, execute and deliver to the
Trustee this Supplemental Indenture in order to reflect the results of the
NorAm Merger as required by the Indenture;
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WHEREAS, pursuant to Section 801 of the Indenture, HI Merger,
as the surviving corporation of the NorAm Merger, is required to expressly
assume, by an indenture supplemental to the Indenture, the due and punctual
payment of the principal of (and premium, if any) and interest on all the
Debentures and the performance of every covenant of the Indenture on the part
of the Company to be performed or observed and to provide for the conversion
rights of Holders of Debentures in accordance with Section 1306 of the
Indenture;
WHEREAS, Section 1306 of the Indenture requires that, as a
result of the NorAm Merger, a Holder of a Debenture shall have the right to
convert the Debenture into the consideration receivable upon the NorAm Merger
by a holder of shares of NorAm Common Stock into which the Debenture could have
been converted immediately prior to the NorAm Merger;
WHEREAS, Section 2.2(f) of the Merger Agreement provides that
following the effective time of the NorAm Merger (the "Effective Time"), each
outstanding Debenture will be convertible into the amount of Stock
Consideration (and cash in lieu of fractional shares of Houston Common Stock)
and Cash Consideration which the Holder thereof would have had the right to
receive after the Effective Time if such Debenture had been converted
immediately prior to the Effective Time and the Holder thereof had made the
Stock Election (as defined in the Merger Agreement) and received the Stock
Consideration with respect to 50% of the shares of NorAm Common Stock issuable
upon such conversion of the Holder's Debentures and made the Cash Election (as
defined in the Merger Agreement) and received the Cash Consideration with
respect to the remaining 50% of such NorAm Common Stock; and
WHEREAS, Section 901 of the Indenture provides that under
certain conditions the Company and the Trustee, without the consent of the
Holders of Debentures, from time to time and at any time, may enter into an
indenture supplemental to the Indenture, inter alia, to evidence the succession
of another corporation to the Company and the assumption by any such successor
of the covenants of the Company under the Indenture and in the Debentures;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and to comply with Sections 801, 901 and 1306 of the Indenture, the parties
hereto hereby agree, for the equal and proportionate benefit of the respective
Holders from time to time of the Debentures, as follows:
Section 1. Defined Terms. Capitalized terms used and not otherwise
defined herein have the respective meanings assigned to such terms in the
Indenture.
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Section 2. Succession by Merger.
(1) As of the Effective Time, HI Merger shall become the successor
to the Company for all purposes of the Indenture and HI Merger hereby expressly
assumes the due and punctual payment of the principal of (and premium, if any)
and interest on all the Debentures and the performance of every covenant of the
Indenture, as supplemented by this Supplemental Indenture, on the part of the
Company to be performed or observed.
(2) Concurrently with the execution and delivery of this
Supplemental Indenture, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel as required by Section 801(3) of the
Indenture.
Section 3. Conversion Privilege. The Holder of each Debenture
outstanding as of the Effective Time (and each subsequent Holder) shall have
the right from and after the Effective Time to convert such Debenture only into
the amount, subject to the adjustments provided for in Article Thirteen of the
Indenture, of Stock Consideration (and cash in lieu of fractional shares of
Houston Common Stock) and Cash Consideration which the Holder thereof would
have had the right to receive after the Effective Time if such Debenture had
been converted immediately prior to the Effective Time and the Holder thereof
had made the Stock Election (as defined in the Merger Agreement) and received
the Stock Consideration with respect to 50% of the shares of NorAm Common Stock
issuable upon such conversion of the Holder's Debentures and made the Cash
Election (as defined in the Merger Agreement) and received the Cash
Consideration with respect to the remaining 50% of such NorAm Common Stock.
Section 4. Additional Covenants of Houston. HL&P hereby (i)
agrees to (A) reserve and keep available out of its authorized but unissued
capital stock, solely for the purpose of issuance upon the conversion of
Debentures as provided in this Supplemental Indenture and the Indenture, a
number of shares of Houston Common Stock sufficient to issue the Stock
Consideration upon the conversion of all outstanding Debentures and (B) issue
and cause to be delivered in accordance with this Supplemental Indenture, the
Indenture and the Company's instructions, the Stock Consideration and the Cash
Consideration upon conversion of any Debenture and (ii) warrants that all
shares of Houston Common Stock that may be issued upon the conversion of any
Debenture, when so issued, shall be duly authorized, validly issued, fully paid
and nonassessable.
Section 5. Ratification. The Indenture as hereby supplemented
is in all respects ratified and confirmed by each of the parties hereto, and
all of the rights and powers created thereby or thereunder shall be and remain
in full force and effect.
Section 6. Governing Law. The laws of the State of New York
shall govern this Supplemental Indenture without regard to principles of
conflict of laws.
Section 7. Successors. All agreements of the parties hereto in
this Supplemental Indenture shall bind their respective successors.
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Section 8. Multiple Counterparts. The parties hereto may sign
multiple counterparts of this Supplemental Indenture. Each signed counterpart
shall be deemed an original, but all of them together represent the same
agreement.
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IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be executed by its duly authorized officer as of the date first
above written.
HOUSTON LIGHTING & POWER COMPANY
By: /s/ XXXX XXXX XXXXX
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Name: Xxxx Xxxx Xxxxx
Title: Executive Vice President,
General Counsel
and Corporate Secretary
Attest:
By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Assistant Corporate Secretary
HI MERGER, INC.
By: XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: President
Attest:
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Corporate Secretary
NORAM ENERGY CORP.
By: /s/ T. XXXXXX XXXXX
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Name: T. Xxxxxx Xxxxx
Title: President
Attest:
By: /s/ XXXXXX XXXXXX, XX.
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Name: Xxxxxx Xxxxxx, Xx.
Title: Secretary
CHASE MANHATTAN BANK
(National Association), Trustee
By: /s/ X. X. XXXXXXXX
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Name: X. X. Xxxxxxxx
Title: Second Vice President
Attest:
By: /s/ XXXX X. XXXXXXX, XX.
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Name: Xxxx X. Xxxxxxx, Xx.
Title: Trust Officer
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